Instructions: B195™–2008, Standard Form of Agreement Between Owner and Architect for Integrated Project Delivery

Summary:

Instructions for B195™ – 2008, Standard Form of Agreement Between Owner and Architect for Integrated Project Delivery is a standard form agreement outlining the responsibilities and services of the Architect in an Integrated Project Delivery (IPD) setting. It incorporates AIA Document A295™–2008, which details the duties of the owner, architect, and contractor throughout the project's phases.

Synopsis. 

AIA Document B195–2008 is a standard form of agreement between owner and architect for a project that utilizes integrated project delivery (IPD). AIA Document B195–2008 primarily provides only the business terms unique to the agreement between the owner and architect, such as compensation details and licensing of instruments of service. B195 does not include the specific scope of the architect’s services; rather, it incorporates by reference AIA Document A295™–2008, General Conditions of the Contract for Integrated Project Delivery, which sets forth the architect’s duties and scope of services for each of the six phases of the project, along with the duties and obligations of the owner and contractor. For all document details and a record of changes, see the summary  »

Using B195–2008.

Cover Page.

Date. The date represents the date the Agreement becomes effective. It may be the date that an oral agreement was reached, the date the Agreement was originally submitted to the other party, the date authorizing action was taken or the date of actual execution. Professional services should not be performed prior to the effective date of the Agreement.

Parties. Parties to this Agreement should be identified using the full address and legal name under which the Agreement is to be executed, including a designation of the legal status of both parties (sole proprietorship, partnership, joint venture, unincorporated association, limited partnership or corporation [general, limited liability, close or professional], etc.). Where appropriate, a copy of the resolution authorizing the individual to act on behalf of the firm or entity should be attached. Other information may be added, such as telephone numbers and electronic addresses.

Project. The proposed Project should be described in sufficient detail to identify (1) the official name or title of the facility, (2) the location of the site, if known, (3) the proposed building usage, and (4) the size, capacity or scope of the Project, if known.

Article 1 – Architect’s Services and Responsibilities

§ 1.1 The Architect’s specific scope of services are set forth in AIA Document A295–2008 General Conditions of the Contract for Integrated Project Delivery, which is incorporated by reference.

§ 1.5 Additional Services. The Architect’s services are set forth in A295–2008, however, any Additional Services the Architect may perform are set forth in B195–2008. Section 1.5 contemplates two types of Additional Services. The first type requires the Architect to notify the Owner and await authorization to proceed before providing any such Additional Services. The second type requires the Architect to notify the Owner upon realizing the need for such Additional Services as well. In the second type, however, the Architect may proceed with such Additional Services without waiting for notification from the Owner as to do otherwise may cause a delay on the Project.

§ 1.5.4 Insert an agreed-upon number in each of the spaces provided.

§ 1.5.5 Insert the number of months beyond which the Architect shall be entitled to compensation as Additional Services.

Article 4 – Compensation

There are at least ten methods of computing compensation for architectural services. Four of these methods are time-based, reflecting in different ways the time spent by the Architect on the Project:

Multiple of Direct Salary Expense, in which direct salaries of designated personnel are multiplied by a factor representing benefits, overhead, and profit.

Multiple of Direct Personnel Expense, in which the salaries plus benefits of designated personnel are multiplied by a factor representing overhead and profit.

Professional Fee Plus Expenses, in which the salaries, benefits, and overhead of designated personnel are the expense and the fee may be a multiplier, percentage or lump sum representing profit.

Hourly Billing Rates, in which salaries, benefits, overhead and profit are included in the rate for designated personnel.

Other methods, while they may be indirectly related to time expended on the Project, do not use time as a factor in the calculation:

Stipulated Sum, in which compensation is listed as a dollar amount.

Percentage of the Guaranteed Maximum Price, in which compensation is calculated by applying an assumed percentage to the Contractor’s Estimate or actual Guaranteed Maximum Price, whichever is most certain at the time the calculation is made.

Multiple of Consultants’ Billing, in which Consultants’ bills are multiplied by a factor representing the Architect’s administrative costs, overhead, and profit.

Square Footage, in which the square footage of the structure is multiplied by a pricing factor.

Unit Cost, in which the number of certain units such as rooms, acres, etc., is multiplied by a pricing factor.

Royalty, in which compensation is a share in the Owner’s income or profit derived from the built facility.

The AIA makes no recommendation as to the appropriateness of any of these methods of compensation on a particular project, nor does the AIA suggests that the foregoing list includes all methods that are possible, practical or in actual use. The use of any of the compensation methods described above, singly or in combination with other methods, is a business decision for the Architect and the Owner. Further, the AIA makes no recommendations and has no guidelines or schedules that specify the amount of compensation an architect should be paid.

§ 4.1 Insert the basis of compensation for the Architect’s Basic Services. Sample language is provided below for several of the most widely used methods of compensation.

If a Multiple of Direct Salary Expense is used, include multipliers using words and numerals in the following insert:

Compensation for services rendered by principals and employees shall be based on a multiple of ________ (__) times Direct Salary Expense, which shall be defined as the direct salaries of the Architect’s personnel engaged on the Project excluding any costs of mandatory or customary contributions and benefits. Compensation for services rendered by Consultants shall be based on a multiple of ________ (__) times the amounts billed by Consultants.

If a Multiple of Direct Personnel Expense is used, include multipliers using words and numerals in the following insert:

Compensation for services rendered by principals and employees shall be based on a multiple of ________ (__) times Direct Personnel Expense. Compensation for services rendered by Consultants shall be based on a multiple of ________ (__) times the amounts billed by Consultants.

If a Professional Fee Plus Expenses is to be used, include the dollar figure and the appropriate multipliers (using words and numerals) in the following insert:

Compensation shall be a Fixed Fee of ________ ($__) plus a multiple of ________ (__) times Direct Personnel Expense. Compensation for services rendered by Consultants shall be based on a multiple of ________ (__) times the amounts billed by Consultants.

Alternatively, the fee (representing profit) may be calculated as a multiplier or percentage.

If Hourly Billing Rates are used, include the cumulative amount for salary, benefits, overhead, and profit to fix each rate using words and numerals in the following insert:

Compensation for services rendered by Principals and employees shall be based upon the hourly billing rates set forth below:

1. 1. 1. Principals’ time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, the Principals are: (List Principals, such as owners, partners, corporate officers, and participating associates.)
      2. Supervisory time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, supervisory personnel include: (List managerial personnel by name or job title, such as general manager, department head or project manager.)
      3. Technical Level I time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, Technical Level I personnel include: (List those personnel by name or job title who are highly skilled specialists, such as job captains, senior designers, senior drafters, senior planners, senior specifiers or senior construction administrators.)
      4. Technical Level II time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, Technical Level II personnel include: (List those personnel by name or job title who hold intermediate-level positions relative to Technical Level I, such as professionals awaiting licensure and managers of clerical staff.)
      5. Technical Level III and clerical personnel time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, Technical Level III and clerical personnel include: (List those personnel by name or job title who occupy junior-level positions, such as word processor or office assistant.)
      6. Compensation for services rendered by Consultants shall be based on a multiple of ________ (__) times the amounts billed by Consultants.

If a Percentage of The Guaranteed Maximum Price is to be used, insert the following:

Compensation shall be ________ percent (___%) of the Guaranteed Maximum Price, as defined in A295–2008.

If a Stipulated Sum is to be used, insert the sum in words and numerals in the following sample language:

Compensation shall be a stipulated sum of ________ ($__).

No sample language is provided for compensation based on square footage, unit cost or royalty. Parties choosing one or more of these methods should craft their own language based on the particulars of the Project.

§ 4.2 See methods of compensation shown above for Section 4.1.

§ 4.3 See methods of compensation shown above for Section 4.1.

Article 5 – Dispute Resolution

The Owner and Architect are required to resolve any claim or cause of action arising out of or relating to this Agreement pursuant to the mediation and arbitration provisions set forth in the A295–2008. This includes the joinder and consolidation provisions set forth in the A295–2008.

Article 8 – Special Terms and Conditions

Insert any modifications to the standard text of the document, if the modifications are not otherwise inserted elsewhere in the document. For more information about modifying the document, refer to the Modifications section of these Instructions.

Executing the agreement.

The persons executing AIA Document B195–2008 should indicate the capacity in which they are acting (i.e., president, secretary, partner, etc.) and the authority under which they are executing the Agreement. Where appropriate, a copy of the resolution authorizing the individual to act on behalf of the firm or entity should be attached.

Important.

Modifications. Particularly with respect to professional or contractor licensing laws, building codes, taxes, monetary and interest charges, arbitration, indemnification, format and font size, AIA Contract Documents may require modification to comply with state or local laws. Users are encouraged to consult an attorney before completing or modifying a document.

Reproductions. This document is a copyrighted work and may not be reproduced or excerpted from without the express written permission of the AIA. There is no implied permission to reproduce this document, nor does membership in The American Institute of Architects confer any further rights to reproduce this document. For more information, see the document footer and the AIA Contract Documents® Terms of Service.