Synopsis.
AIA Document A135™–2024, Standard Form of Agreement Between Owner and Construction Manager as Constructor for Collaborative Project Delivery where the basis of payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price, and AIA Document B135™–2024, Standard Form Agreement Between Owner and Architect for Collaborative Project Delivery, Construction Manager as Constructor Edition, are intended for use where the parties wish to engage in a more collaborative process than is common in traditional delivery methods. The philosophy behind these documents is to optimize the expertise of the owner, construction manager, and architect throughout the preconstruction and design phases, as well as the construction phase, to the benefit of all and the success of the project through enhanced collaboration. A135 and B135 use the same basic structure and compensation methods as in the standard AIA Construction Manager as Constructor documents while incorporating some IPD principles, such as team management and open communications, to provide the option for more collaboration throughout the project.
In AIA Document A135-2024, the Construction Manager provides preconstruction services and construction of the project. Throughout the preconstruction and construction phases, A135 is coordinated with B135 to provide a collaborative process where the owner, construction manager, and architect work closely to achieve the project goals. As in A133-2019, the Construction Manager provides the Owner with a Guaranteed Maximum Price proposal which the Owner may accept, reject, or choose to negotiate. Upon the Owner’s acceptance of the proposal by execution of the Guaranteed Maximum Price Amendment (Exhibit A), the Construction Manager becomes contractually bound to provide labor and materials for the Project and to complete construction at or below the guaranteed maximum price The Construction Manager’s services under this document are divided into two parts: Preconstruction Services and Construction Phase, portions of which may proceed concurrently. A135-2024 also includes an Insurance and Bonds Exhibit (Exhibit B), which is a critical part of the agreement, and should be discussed with legal and insurance counsel.
USING A135–2024.
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.
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, 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. 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.
Architect. As in the other AIA Contract Documents, the Architect’s full legal or corporate title should be used.
Article 1 Initial Information
§ 1.2 Initial Information is provided in Section 1.2. The parties should take care to be as explicit and detailed as possible with respect to the relevant Initial Information.
§ 1.2.1.4 The parties must set forth the Owner’s anticipated design and construction milestone dates, as those dates are to be incorporated into the Construction Manager’s initial schedule.
§ 1.2.1.6 If the Owner has a Sustainable Objective for the Project, provide a description in the fill point.
§ 1.2.1.8 Identify the Owner’s representative and indicate how that person may be contacted.
§ 1.2.1.10 AIA Contract Documents publishes standard form Owner-Consultant Agreements, including C103™–2015, Standard Form of Agreement Between Owner and Consultant without a Predefined Scope of Consultant’s Services, which sets the terms and conditions governing the relationship between the Owner and its Consultant. C103–2015 does not include a scope of services and must be paired with another document providing a description of the required services. The AIA publishes several consultant’s scope of services documents, including AIA Documents C201™–2015, Standard Form of Consultant’s Services: Land Survey, C202™–2015, Standard Form of Consultant’s Services: Geotechnical Engineering, and C203™-2017, Standard Form of Consultant’s Services: Commissioning.
§ 1.2.1.12 Identify the Construction Manager’s representative and indicate how that person may be contacted.
§ 1.2.1.13 Any Owner-specific requirements for the Construction Manager’s staffing plan for Preconstruction Services should be provided here.
§ 1.2.1.14 Owner-specific requirements for subcontractor procurement should be listed here.
Article 2 Management of the Project
§ 2.1.1 Project Management Team
List the name and contact information for each Project Management Team member appointed by the Owner, Construction Manager, and Architect.
Article 3 General Provisions
§ 3.2 Relationship of the Parties
In a contract using a stipulated sum for the Construction Manager’s compensation, the Owner has agreed to pay a specific amount regardless of the cost incurred by the Construction Manager in the performance of the Work. However, when the Construction Manager’s compensation is based on Cost of the Work, as in this Agreement, the amount expended by the Construction Manager as a “Cost of the Work” has a direct economic consequence to the Owner. Therefore, the Owner has a heightened interest in the efficient and economical performance by the Construction Manager, and the Construction Manager has a consequent responsibility to manage expenditures on the Project in keeping with the Owner’s interests. This provision addresses those particular interests of the Owner in a cost plus contract, and the corollary obligations of the Construction Manager.
Article 4 Construction Manager’s Responsibilities
§ 4.1.13 Other Preconstruction Services Insert a description of any other Preconstruction Services to be provided by the Construction Manager, such as providing cash flow projections, development of a project information management system, prequalification, early selection or procurement of subcontractors, consulting services, etc., or reference an attached exhibit that provides a description.
Article 6 Compensation and Payments for Preconstruction Services
§ 6.1.1 Sample language is provided below for describing three methods of computing compensation.
Stipulated Sum:
Compensation shall be the stipulated sum of ________ ($__), plus the following reimbursable cost items:
Multiple of Direct Personnel Expense:
Compensation shall be based on a multiple of ________ (__) times Direct Personnel Expense of Construction Manager’s personnel, plus the following reimbursable cost items:
Actual Cost:
Compensation shall be based on actual costs incurred in the performance of the Preconstruction Phase services. (A maximum cost may be established.)
§ 6.1.3 Insert the number of months beyond which the Construction Manager’s Preconstruction Services compensation shall be adjusted.
§ 6.2.2 Insert the number of days within which payment is due after the receipt of the Construction Manager’s invoice by the Owner. If the rate of interest on late payments is to be different from the legal rate, insert the agreed upon rate of interest.
Article 7 Compensation for Construction Phase
§ 7.1.2 Enter the method used for determining the Construction Manager’s Fee (lump sum, percentage of Cost of the Work or other method).
§ 7.1.3 Explain how the Construction Manager’s Fee will be adjusted for changes in the Work.
§ 7.1.4 If there will be a limitation placed on Subcontractors’ overhead and profit, enter the amount or explain how the limitation will be calculated.
§ 7.1.5 Enter the percentage cap that will be used to determine the rental rates for Construction Manager-owned equipment.
§ 7.1.6 Insert the amount and any conditions for liquidated damages relating to failure to achieve Substantial Completion of the Work, or designated portion of the Work, on time. Liquidated damages are not a penalty to be inflicted on the Construction Manager, but must bear an actual and reasonably estimable relationship to the Owner’s loss if construction is not completed on time. If a provision for liquidated damages is included, it should be carefully drafted by the Owner’s attorney and acceptable to the Construction Manager’s attorney. For further information on liquidated damages see AIA Document A503, Guide for Supplementary Conditions.
§ 7.1.7 Insert terms and conditions for any bonuses or other performance incentives. This space may also be used to insert specific provisions if the Construction Manager is to participate in any savings when the final Contract Sum is below the Guaranteed Maximum Price. For further information on bonus, incentive and savings provisions, see AIA Document A503, Guide for Supplementary Conditions.
Article 8 Cost of the Work for Construction Phase
§ 8.2.2.1 Identify supervisory and administrative personnel that will perform Work related to the Project at a location other than the Project site. Also identify the type of activity the personnel will perform and what percentage of their time will be required for the Work.
Article 12 Payments for Construction Phase
§ 12.1.2 Insert the time period covered by each Application for Payment if it differs from the one given.
§ 12.1.3 Insert the time schedule for presenting Applications for Payment, and indicate due dates for making progress payments.
The last day upon which Work may be included in an Application should normally be no less than 14 days prior to the payment date, in consideration of the 7 days required for the Architect’s evaluation of an Application and issuance of a Certificate for Payment and the time subsequently accorded the Owner to make Payment in Article 9 of A201–2017. The Construction Manager may prefer a few additional days to prepare the Application.
Due dates for payment should be acceptable to both the Owner and Construction Manager. They should allow sufficient time for the Construction Manager to prepare an Application for Payment, for the Architect to certify payment, and for the Owner to make payment. They should also be in accordance with time limits established by this Article and Article 9 of A201–2017.
§ 12.1.8.1 Indicate the percent retainage, if any, to be withheld when computing the amount of each progress payment.
The Owner frequently pays the Construction Manager the bulk of the earned sum when payments fall due, retaining a percentage to ensure faithful performance. These percentages may vary with circumstances and localities.
§ 12.1.8.1.1 Certain items included in the Contract Sum may be excluded from the calculation of retainage. Where there are any limitations or exclusions from retainage, list those items.
§ 12.1.8.2 The AIA endorses the practice of reducing retainage as rapidly as possible, consistent with the continued protection of all affected parties. A provision for reducing retainage should provide that the reduction will be made only if the Architect judges that the Work is progressing satisfactorily. If the Construction Manager has furnished a bond, demonstration of the surety’s consent to reduction in or partial release of retainage must be provided before such reduction is put into effect. Use of AIA Document G707A™ is recommended. Insert terms for reduction or limitation of retainage.
§ 12.1.8.3 Often, the majority of retainage is released upon Substantial Completion of the Work. However, the Owner may continue to retain some portion of retainage to cover the remaining Work to be completed. Insert any conditions for release of retainage upon Substantial Completion. Where bonds have been provided by the Construction Manager, consent of surety should be obtained as outlined in Section 12.1.8.2 above.
§ 12.2.3 Insert the date by which Owner shall make final payment, if it differs from the one stated.
When final payment is requested, the Architect should ascertain that all claims have been settled or should define those which remain unsettled. The Architect should obtain the Construction Manager’s certification required by Article 9 of A201–2017 and must determine that, to the best of the Architect’s knowledge and belief and according to the Architect’s final inspection, the requirements of the Contract have been fulfilled.
§ 12.3 Payments due and unpaid under the Contract bear interest from the date payment is due at the legal rate prevailing from time to time at the place where the Project is located. If a different interest rate is to be paid, insert the amount here.
Article 13 Dispute Resolution
§ 13.1.2 The Project Management Team will serve as the Initial Decision Maker to render initial decisions on claims arising from or relating to the Construction Manager’s Construction Phase services, unless the parties appoint another individual in this section.
§ 13.3 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 14 Termination or Suspension
§ 14.2 Termination or Suspension Following Execution of the Guaranteed Maximum Price Amendment Terminations after execution of the Guaranteed Maximum Price Amendment under AIA Document A135–2024 are treated similarly to terminations under a stipulated sum agreement and so follow the provisions of AIA Document A201–2017, except that Section 14.2 provides detailed instructions for calculating the amount due to the Construction Manager in the event the Owner terminates the contract for cause and the unpaid balance on the Guaranteed Maximum Price exceeds the cost of finishing the Work. Note that in in the case where the Owner terminates the Construction Manager for cause, the amount of the Construction Manager’s fee is calculated on a pro-rata basis. If the Construction Manager terminates for cause, or the Owner terminates for convenience, AIA Document A201–2017 provisions govern. A135 Section 14.2.2.2 provides (1) for the Owner to pay the Construction Manager fair compensation for any Construction Manager-owned equipment that the Owner chooses to use in completing the Work that is not included in the Cost of the Work, and (2) for the Construction Manager to facilitate assignment of subcontracts and other contracts to the Owner, should the Owner elect to assume the rights and responsibilities associated with those contracts.
§ 14.2.3 AIA Document A201–2017, Section 14.4.3, requires payment of a termination fee to the Construction Manager in the event that the Owner terminates the Construction Manager for convenience. Insert here, the amount of the termination fee or the method for calculating the termination fee. For example, the Owner and Construction Manager may agree to progressively increase the termination fee up to fifty percent completion and then agree to progressively reduce the Construction Manager’s termination fee until final completion. The parties may also agree to begin with a large termination fee that is progressively reduced as the project progresses.
Article 15 Miscellaneous Provisions
§ 15.3.1 Preconstruction Services Insurance and Bonds Insert the policy limits for the types of coverages the Construction Manager will be required to maintain for the duration of its Preconstruction Services.
§ 15.4 Section 1.6 of AIA Document A201–2017 allows the Owner and the Construction Manager to provide notice in electronic format. Notice may be given in accordance with a building information modeling exhibit or the requirements for delivering notice in electronic form may be provided in this fill point, such as the name, title, and email address of the recipient and whether the system will be required to generate a read receipt (recommended).
§ 15.5 Insert other contract provisions here.
Article 16 Scope of the Agreement
A detailed enumeration of all Contract Documents must be made in this article. Where optional documents are listed in Section 16.2.5 that will be incorporated as Contract Documents, check the appropriate box and insert an appropriate description of the document. List additional documents in Section 16.2.7 that are intended to form part of the Contract Documents.
EXHIBIT A GUARANTEED MAXIMUM PRICE AMENDMENT
This Amendment will typically be completed by the Construction Manager in accordance with Section 4.2, prior to the conclusion of the Preconstruction Phase.
Cover Page The date of the Guaranteed Maximum Price Amendment and the date of the accompanying A135-2024 should be inserted separately into the fill points provided. 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.
Article A.1 Guaranteed Maximum Price
§ A.1.1.1 Insert a Guaranteed Maximum Price for the Cost of the Work and the Construction Manager Construction Manager’s Fee.
§ A.1.1.2 Insert an itemized statement of the Guaranteed Maximum Price organized as instructed or reference an attachment with such information.
§ A.1.1.5 In order to clarify the handling of alternates on a Project, this provision has been modified to clearly identify alternates that are included in the Guaranteed Maximum Price and those alternates that may be accepted after a condition precedent has been met. This clarifies information previously included in a parenthetical instruction.
§ A.1.1.5.1 Identify any alternates described in the Contract Documents and accepted by the Owner as included in the Guaranteed Maximum Price.
§ A.1.1.5.2 List other alternates which may be accepted subsequent to this document’s execution, including the price of each alternate and the conditions for acceptance.
§ A.1.1.6 Identify the item and state the unit price and quantity limitations, if any, to which the unit price will be applicable.
Article A.2 Date of Commencement and Substantial Completion
§ A.2.1 The format for the date of commencement of the work has been changed to a check box allowing the parties to select either the date of execution of the Amendment, or a different date as agreed by the parties. The date of commencement of the Work should be identified by checking the appropriate box. It is important to note that if a selection is not made, the default will be the date of the Agreement.
§ A.2.3.1 A check box has been added so that the parties can select whether Substantial Completion of the entire Work will be achieved no later than a specified calendar date or within a certain number of days from the date of commencement. Select the appropriate box and insert the date or number of days as appropriate.
§ A.2.3.2 This section has been added to allow for Substantial Completion of certain phases of the Project to be completed prior to the Substantial Completion date for the entire Work set forth in Section A.2.3.1 (tiered Substantial Completion dates). This can be used when portions of the Work will be completed and occupied by the Owner prior to Substantial Completion of the entire Work. Where portions of the Work may be occupied and used prior to Substantial Completion of the entire Work, each portion of the Work can be described in this section and the Substantial Completion date for each portion of the Work may be indicated.
§A.2.3.3 Because liquidated damages are a function of the Construction Manager’s failure to achieve Substantial Completion within the Contract Time, this section has been added to cross-reference the fill point for Liquidated Damages in Section 7.1.6 of the Agreement (relating to adjustments in the Contract Sum).
Article A.3 Information Upon Which Amendment is Based
§ A.3.1.5 Identify and state the amounts of any allowances.
§ A.3.1.6 State any assumptions and clarifications upon which the Guaranteed Maximum Price is based.
EXHIBIT B INSURANCE AND BONDS
AIA Document A135–2024 Exhibit B is the insurance and bonds exhibit for AIA Document A135–2024. AIA Document A135–2024 Exhibit B provides the general requirements relating to insurance and bonds after execution of the Guaranteed Maximum Price Amendment, as well as the specific policy limits and bond amounts for the Project. Insurance requirements under the exhibit are separated into those coverages that would typically be provided by the Owner and Construction Manager on all projects (required coverages) and other (optional) coverages that may be selected by the parties based on their specific needs and the needs of the Project.
A135 Exhibit B, as a stand-alone document, can be readily discussed with your insurance advisors and legal counsel. Additionally, Exhibit B provides an easy reference for the insurance and bonding requirements related to your Project. However, it is important to note that additional terms related to insurance are found in Article 11 of AIA Document A201–2017. Users are strongly encouraged to review their insurance needs with legal and insurance counsel to determine the appropriate insurance requirements for their particular project. When forwarding AIA Document A135–2019 Exhibit B to your insurance broker or legal counsel, be sure to include, at a minimum, Article 11 of AIA Document A201–2017 as these terms will be important to reviewing Exhibit B and advising you of appropriate coverage.
Date. Identify the date of the Agreement to which AIA Document A135–2024 Exhibit B is attached just as it appears on the cover page of the Agreement.
Project and Parties (Cover Page). Identify the Project and the parties just as they appear on the cover page of the Agreement.
Article B.2 Owner’s Insurance
§ B.2.3.1.1 Insert the cause of loss and any applicable sub-limits.
§ B.2.3.1.2 Insert the type of coverage and any applicable sub-limits.
§ B.2.4 Section B.2.4 allows the Owner to select extended property insurance coverage that will be purchased and applicable to the Project. For each of the extended property insurance coverages applicable to the Project, check the appropriate box and indicate any limits of coverage or any other applicable conditions in the space below the selected coverage.
§ B.2.5 Section B.2.5 allows the Owner to select whether it will provide cyber security insurance or any other types of coverage for the Project. If cyber security insurance will be provided, check the box for Section B.2.5.1 and indicate any applicable limits of coverage or other conditions in the space provided. Where other insurance coverage will be provided by the Owner, check the box for Section B.2.5.2 and indicate the type of coverage and any applicable limits.
Article B.3 Construction Manager’s Insurance and Bonds
§ B.3.2.1 Where the Construction Manager is required to maintain required insurance for a duration other than the period for correction of the Work, indicate the duration of required coverages in the fill point provided.
§ B.3.2.2.1 Indicate the applicable coverage limits for the Construction Manager’s commercial general liability coverage.
§ B.3.2.3 Indicate the applicable coverage limits for the Construction Manager’s automobile liability coverage.
§ B.3.2.4 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 "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.
§ B.3.2.6 Indicate the applicable coverage limits for the Construction Manager’s employer’s liability coverage.
§ B.3.2.8 Indicate the applicable coverage limits for the Construction Manager’s professional liability coverage, if applicable.
§ B.3.2.9 Indicate the applicable coverage limits for the Construction Manager’s pollution liability coverage, if applicable.
§ B.3.2.10 Where the Construction Manager will provide professional liability and pollution liability coverage under a combined policy, indicate the applicable coverage limits.
§ B.3.2.11 Indicate the applicable coverage limits for Construction Manager’s insurance for maritime liability risks associated with operation of a vessel, if the Work requires such activities.
§ B.3.2.12 Indicate the applicable coverage limits for Construction Manager’s insurance for use or operation of manned or unmanned aircraft, if the Work requires such activities.
§ B.3.3.1 Where the Construction Manager is required to maintain required insurance for a duration other than the period for correction of the Work, indicate the duration of required coverages in the fill point provided.
§ B.3.3.2 Section B.3.3.2 allows the Construction Manager to select whether it will provide other insurance coverage in addition to that required under Section B.3.2. If other insurance will be provided, check the appropriate box for each selected coverage under Section B.3.3.2, and indicate any applicable limits of coverage or other conditions in the space provided.
§ B.3.3.2.1 Section B.3.3.2.1 requires the Construction Manager, instead of the Owner, to provide builder’s risk insurance, of the same type and scope satisfying the requirements identified in Section B.2.3. Where this requirement has been selected, the Owner is relieved of the obligation to provide builder’s risk insurance except for those coverages required by Section B.2.3.1.3 and B.2.3.3. Where the Construction Manager’s obligation to provide builder’s risk insurance differs from Section B.2.3, the differences should be described in the fill point following B.3.3.2.1. Additionally, Article 11 of AIA Document A201–2017 requires that the Owner adjust and settle losses under the builder’s risk insurance. If a party other than the Owner assumes this responsibility, that information should also be provided in the fill point.
§ B.3.4 Where the Construction Manager is required to provide payment and performance bonds, indicate the penal sum of each bond in the space provided.
Article B.4 Special Terms and Conditions
Indicate any special terms and conditions that modify the insurance and bonds exhibit in the space provided.
EXECUTING THE AGREEMENT
The persons executing AIA Document A135–2024 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.
Executing the Amendment. This Amendment should be executed by the same parties who signed the original Agreement, or their designated successors. Any formalities to indicate the authority of the signatories which were done for the original Agreement should also be carried out for this Amendment.
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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.
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