A.I.A Contract, Say It Ain't So

Itsahipo

I need you guys opinion, I'm to start a project in mid February to a single family home circa 1939 that will be unoccupied at the time of construction. We are going to remodel the entire first floor of the house and remove the roof and go up wiyh a second story with 2 bedrooms and 2 baths ect. The project is involved but not over the top (footprint @1000 sf.) and the architect wants to use an A.I.A contract. I have been burned by these contracts in the past and will not sign one. My people and I have been sold to this project and the owner since day one based on our reputation and refrences and I am very excited about the project. (lotsa fun) The cost is right at $250,000.00. What would you guys do?

Thanks.....Billy

Unregistered

What portions or clauses of the contract are you not happy with?

PipeGuy

How so?

I've read / ratified hundreds of agreements since 1987, most AIA or some form thereof. After seeing some of the most one-sided agreements you can imagine, I've come to appreciate the AIA docs as some of the fairest - overall.

If the architect insists on using an AIA doc then insist that he uses the most appropriate form for your job. You can see a list at www.AIA.org. Here's some examples of the many:
A101 Agreement Between Owner and Contractor—Stipulated Sum
A101CMa, Agreement Between Owner and Contractor-Stipulated Sum, Construction Manager
A105, Agreement Between Owner and Contractor for a Small Project
A107, Abbreviated Agreement Between Owner and Contractor for Construction Projects of Limited Scope—Stipulated Sum
A111, Agreement Between Owner and Contractor—Cost of the Work Plus a Fee, With a Negotiated Guaranteed Maximum Price (GMP)
etc., etc., etc.

I find that the customers who want to use an AIA doc are also fine with crossing out almost any thing I ask to have crossed out...within reason.

Depending on wether you're a contractor or subcontractor the AIA terms can impact you differently. As a subcontractor the thing I don't like about most AIA type contracts is the payment terms. Typically you get paid when the money is "due" to you provided you've submitted a proper application for payment. The trick is that the money is not "due" until the contractor gets his money. That opens the door for "issues" shall we say. I always try to get around that by addendum - making payment due by some date or milestone that's not tied to the contractor's payment.
Another thing that's important is to include, by addendum, a detailed list of what's NOT included so that the broad, all inclusive, aspects of the agreement don't bite you.

Grumpy

I personally hate signing all these new construction agreements unless they are in plain english and not more than a couple pages in length. All these new construction and AIA agreements are bull kaka in my opinion.

Itsahipo, I ask you this simple question. Who is your customer? The home owner or the architect?

I won't do a job unless MY contract is signed. If the customer wants me to add some provisions protecting them, if I think the provisions are fair then I will add them. Quite seriously, forcing them to use my contract only means that I know and understand every word in that contract. In those AIA and other multi page contracts it's really easy to sell your soul because they are soooooo long in length that you are bound to miss the clause where you promise your first born.

If you can't tell I have been burnt by new construction and all the BS that goes along with it. Usually New Con the pay aint all that great unless you really specialize in some type of niche.

hatchet

Ask if they would sign an AGC contract.. I like them better than the AIA.

__________________
Rich
WIT Construction Co.
Superior MT Contractor

PipeGuy

Wow! Where do I buy tickets for a ride on that gravy train?

PipeGuy

Hammer out an agreement we both like. Cross stuff out, write stuff in, send countless e-mails back and forth with the owner, whatever it takes. I'd keep at it until we both had something we wanted. Maybe I'd ask the owner to kick in something for the extra cost of having my lawyer help out.

Pros
- February start, lots'a time to get a contract done
- Cool job, lotsa fun, circa 1939, unoccupied, involved but not over the top
- Opportunity to learn how to make an AIA agreement into something that
works for you
- Opportunity to hone those negotiating skills
- The owner wants you and your team
- The cost is right

Cons
- Contract review / negotiation might take up time that you'd otherwise be...?

Grumpy

It's simple. Just be firm and be prepared to walk away from jobs. I also won't do work without a down payment. Very few gc's will give money down.

Sarah9910

I like your thinking Rick....asl long as you are confident you will make enough money on the job...there's always more to learn for all of us, if we just take one step at a time.

Unregistered

I would resist crossing out and writting in to satisfy a customer. I am with grumpy, we don't change a single thing in our contracts.

In the past the people who wanted wording changed either didn't understand the documents or had a plan on how to use the change.

If you got plenty of work signed on YOUR contract, tell the ones who want to change it NO.

Just say NO, it is a wonderful thing

Grumpy

I've been saying that for awhile, but it's hard to say no the first tim in fear of losing the job.

The beauty is if you do say no, they don't always walk away.

Some people ask for discounts out of habit. I've found that if someone calls me to ask for a discount, they have already decided they want to do work with me. They get my standard response, which can be summarized into "No."

The same holds true for this contract issue. I once had spent weeks speaking with and ironing out a scope of work for a funky remodel I did the roof and gutters for. After all that time the GC, said your proposal is fine but will you sign mine? My response: "No I am sorry. That is against company policy."

Grumpy

I forgot to mention, I did win that job. The GC responded "Oh.. Ok, I guess it's nott hat big a deal anyway. Just send me yourinsurance papers."