Synopsis.
AIA Document C104™–2024 is a standard form agreement between owner and owner’s representative. The owner’s representative assists the owner in an advisory capacity on matters that impact the project during project initiation, design, procurement, and construction. The owner’s representative’s basic services include consulting with the Owner during all phases of the project, assisting in developing and monitoring the Owner’s budget and schedule, attending project meetings, preparing monthly reports, and coordinating final project close-out activities.
C104-2024 places limitations on the owner’s representative’s authority to act on behalf of the owner with respect to the project. Importantly, AIA Contract Documents® publishes many standard form agreements wherein the owner identifies an owner’s representative with full authority to act on behalf of the owner in relation to the project. Because of the limitations set forth in the C104-2024 related to the owner’s representative’s authority to act on behalf of the owner, users should consult with an attorney before designating the C104-2024 owner’s representative as the owner’s representative in any other standard form agreement published by AIA Contract Documents.
Using C104-2024.
The C104-2024 may be used by an owner who would like to:
- strengthen their knowledge during all phases of the project in order to make informed decisions and navigate potential project challenges effectively;
- receive comprehensive project oversight;
- maximize their investment into the project and avoid unnecessary expenses; and
- maintain effective communication and collaboration amongst project participants.
Instructions. Completing C104-2024.
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 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, closed 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.
Project. The proposed Project should be described in sufficient detail to identify (1) the official name or title of the facilities in the Project, (2) the location of the Project, (3) the proposed building usages, and (4) the size, capacity, or scope of the Project.
Article 1 – Initial Information
§ 1.1 Initial Information is provided in Article 1. The parties should take care to be as explicit and detailed as possible with respect to the relevant Initial Information.
§ 1.1.6 The parties must set forth the Owner’s anticipated design and construction schedule, including design phase milestone dates, as those dates are to be incorporated into the Owner’s Representative’s initial schedule for the Owner’s Representative’s services.
Article 2 – Owner’s Representative’s Responsibilities
§ 2.3 The Owner’s Representative’s limitations of authority to act on behalf of the Owner are provided in this Section.
AIA CONTRACT DOCUMENTS PUBLISHES MANY STANDARD FORM AGREEMENTS WHEREIN THE OWNER IDENTIFIES AN OWNER’S REPRESENTATIVE WITH FULL AUTHORITY TO ACT ON BEHALF OF THE OWNER IN RELATION TO THE PROJECT. C104-2024 PLACES LIMITATIONS ON THE OWNER’S REPRESENTATIVE’S AUTHORITY AND USERS SHOULD CONSULT WITH AN ATTORNEY BEFORE DESIGNATING THE C104-2024 OWNER’S REPRESENTATIVE AS THE OWNER’S REPRESENTATIVE IN ANY OTHER STANDARD FORM AGREEMENT PUBLISHED BY AIA CONTRACT DOCUMENTS.
§ 2.4.3 Some insurers have written excess policies which expressly state that they apply only in the event the underlying policies are exhausted through payments made by the underlying insurers (sometimes referred to as "actual exhaustion"). Polices that do not expressly require actual exhaustion are interpreted to permit exhaustion of the underlying policies through payments or contributions made by any combination of underlying insurers, insureds or third parties (sometimes referred to as "functional exhaustion".) Policies that only permit actual exhaustion are counterproductive to settlement, whereas policies that permit functional exhaustion encourage settlement. The intent of this section is to facilitate settlement by requiring that any excess policies allow for functional exhaustion.
Article 3 – Scope of Owner’s Representative’s Basic Services
§ 3.1.10 The Owner’s Representative attends project meetings. While there is no limit the number of virtual meetings, insert the number of in-person meetings to include in the Owner’s Representative’s Basic Services.
§ 3.1.11 The Owner’s Representative prepares and submits a monthly status report. If applicable, insert a report interval other than monthly or any additional information that should be included in the report.
Article 4 – Supplemental and Additional Services
§ 4.1.1 Designate the Owner’s Representative’s or the Owner’s Supplemental Services required for the Project, if any.
§ 4.1.2.1 Describe the Owner’s Representative’s Supplemental Services in detail or identify and reference an exhibit that provides the detailed description of the Owner’s Representative’s Supplemental Services.
§ 4.1.2.2 Describe the Owner’s Supplemental Services in detail or identify and reference an exhibit that provides the detailed description of the Owner’s Supplemental Services.
§ 4.2.3 Insert the number of months beyond which the Owner’s Representative shall be entitled to compensation as Additional Services.
Article 6 – Claims and Disputes
§ 6.2.4 Select from three choices of binding dispute resolution: (1) arbitration, (2) litigation or (3) another method that the parties must identify. Other types of dispute resolution include a dispute resolution board or a mini trial. For additional information about other methods of dispute resolution, refer to The Construction Industry’s Guide to Dispute Avoidance and Resolution free online at www.adr.org.
Article 7 – Termination or Suspension
§ 7.7 Insert the amount of any termination fee, or the method for determining any termination fee.
Article 9 – Compensation
§ 9.1 Insert the basis of compensation for the Owner’s Representative’s Basic Services.
If the parties do not intend to use a stipulated sum method, Section 9.1 allows the parties to identify another basis of compensation. There are a number of other methods for computing compensation for the Owner’s Representative’s services. Four of these methods are time-based, reflecting in different ways the time spent by the Owner’s Representative 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.
Fee Plus Expenses, in which the salaries, benefits, and overhead of designated personnel are the expense and the fee may be a multiplier 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:
Multiple of Consultants’ and Contractors’ Billing, in which the Owner’s consultants’ and contractors’ bills are multiplied by a factor representing the Owner’s Representative’s administrative costs, overhead, and profit.
AIA Contract Documents makes no recommendation as to the appropriateness of any of these methods of compensation on a particular project, nor does AIA Contract Documents suggest 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 Owner’s Representative and the Owner. Further, AIA Contract Documents makes no recommendations and has no guidelines or schedules that specify the amount of compensation an owner’s representative should be paid.
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 Owner’s Representative’s personnel engaged on the Project excluding any costs of mandatory or customary contributions and benefits. Compensation for services rendered by the Owner’s Representative’s consultants shall be based on a multiple of ________ (__) times the amounts billed by the Owner’s Representative’s consultants and contractors.
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 the Owner’s Representative’s consultants and contractors shall be based on a multiple of ________ (__) times the amounts billed by the Owner’s Representative’s consultants and contractors.
If a 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 ________ ($__) plus a multiple of ________ (__) times Direct Personnel Expense. Compensation for services rendered by the Owner’s Representative’s consultants and contractors shall be based on a multiple of ________ (__) times the amounts billed by the Owner’s Representative’s consultants and contractors.
Alternatively, the fee (representing profit) may be calculated as a multiplier or percentage.
If Hourly Billing Rates are used, include the cumulative amount for salary, benefits, overhead and profit to fix each rate using words and numerals in the following insert:
Compensation for services rendered by Principals and employees shall be based upon the hourly billing rates set forth below:
- Principals’ time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, the Principals are: (List Principals, such as owners, partners, corporate officers, and participating associates.)
- Supervisory time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, supervisory personnel include: (List managerial personnel by name or job title, such as general manager, department head or project manager.)
- Technical Level I time at the fixed rate of ________ ($__) 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.)
- Technical Level II time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, Technical Level II personnel include: (List those personnel by name or job title who hold intermediate-level positions relative to Technical Level I, such as professionals awaiting licensure and managers of clerical staff.)
- Technical Level III and clerical personnel time at the fixed rate of ________ ($__) 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.)
- Compensation for services rendered by the Owner’s Representative’s consultants and contractors shall be based on a multiple of ________ (__) times the amounts billed by the Owner’s Representative’s consultants and contractors.
§ 9.2 See methods of compensation shown above for Section 9.1.
§ 9.3 See methods of compensation shown above for Section 9.1.
§ 9.4 See methods of compensation shown above for Section 9.1.
§ 9.5 See methods of compensation shown above for Section 9.1, if other than a percentage of the invoiced amount.
Article 10 – Special Terms and Conditions
If modifications are not otherwise inserted elsewhere in the document, insert any modifications to the standard text of the document. For more information about modifying the document, refer to the Modifications section of these Instructions.
Notes.
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.