NEWSLETTER

New Construction Contracts from Three Sources

2007 has been a big year for standard construction contracts, with new or revised forms being issued by three different construction organizations. In March, the Engineers Joint Contract Documents Committee (EJCDC) issued an update to its core construction-related contract forms, which are heavily used in horizontal construction projects such as municipal and utilities construction. These 21 documents replace the previous 2002 edition and supplement over 40 other documents comprising the full EJCDC program.

In September, a new organization, ConsensusDOCS, published its first edition of over 70 construction contract forms that were derived from previously published documents issued by The Associated General Contractors of America (AGC) and the Construction Owners Association of America (COAA). ConsensusDOCS is an organization comprising 20 different construction organizations representing owners, contractors, subcontractors and sureties that have banded together to produce contract forms based on collaboration and intended to reflect the project’s best interests, rather than a single party interest (see related story in Fall 2007 edition of LinkLine). Finally, in November the American Institute of Architects (AIA) issued almost 40 new and revised documents, including a 2007 edition of its “keystone” document, A201 - The General Conditions of the Contract for Construction, and many other contract forms that are related to and coordinated with A201.

Competition and Controversy
AIA documents are developed in-house by an appointed committee of AIA members, supplemented by a full-time professional staff and outside counsel, with limited invited input from outside organizations, including AGC. In a noteworthy shift from previous editions over a period of fifty years, the 2007 release of AIA’s key A201 general conditions document was pointedly not endorsed by AGC. In an October 2007 press release, AGC said that “the new edition does not fairly balance risk among all parties but instead significantly shifts risk to general contractors and other parties outside of the design profession.”¹ Cynical observers have noted that subsequent to its endorsement of the 1997 edition of A201, AGC began to publish its own family of documents that competes with those published by AIA. The new AGC-backed ConsensusDOCS product that was released in September 2007 includes its own combined owner-contractor agreement and general conditions document, ConsensusDOCS 200, in addition to several other agreement forms that include general conditions. A cover story and an editorial in the September 19, 2007 edition of Engineering News Record included statements indicating that the ConsensusDOCS documents had been developed by 23 industry organizations representing owners, contractors, subs, sureties, insurers and designers. The claim of input from design organizations was subsequently rejected in a letter to the editor of ENR that was signed by the chief executives of AIA, NSPE, ASCE, and ACEC, who wrote, “To our knowledge, no organization in the design professional community has provided comments on, or contributed intellectual property to ConsensusDOCS.”²

How the Programs Differ
Figure 1 is a table that shows the major document categories for each of the programs. Each set of documents is focused primarily on its own constituency, but all three programs include documents intended for use by other parties. As shown in the table, there are some correlations between document sets, but there are also unique aspects to each program. For example, the AIA program now includes documents that deal with projects located outside the United States. The EJCDC documents include a significant number of forms dealing with environmental remediation, procurement, and agency funding. And the ConsensusDOCS program includes a number of documents that deal with program management, in addition to a unique tri-party agreement.

Model Documents
All three organizations subscribe to the concept that standard, “model” documents as a starting point for construction agreements are preferable to custom documents, since the latter often favor the drafting party, are untested in the courts, and must be carefully reviewed by legal counsel because of their unique language. AIA’s program has the distinct advantage of almost 120 years of evolution, with contract terms being refined in response to court cases and changes in the construction industry. EJCDC’s documents program is now over 30 years old, with documents that are tailored to the needs of its professional engineering members.

AGC’s documents program, which has now been absorbed by the ConsensusDOCS initiative, is the newest kid on the block, with documents that apply to a wide range of entities and project delivery methods. For all of these programs, it is critical that their documents be accepted as fair and balanced, because they are competing for acceptance by building owners. The original concept that underlies standard, or model contract documents was that the printed paper form could be used directly as the actual contract document. If modifications were necessary, as they always would be for agreement forms, the required information could be printed or typed directly into blanks within the document or entered into the margins, and unnecessary provisions could be stricken out. For more extensive changes, separate, supplementary documents could be prepared that would modify the printed form. With the dawn of word processing, the concepts of rolling a printed form into a typewriter and attaching supplementary conditions to a preprinted form quickly became obsolete, and the owners of these copyrighted contract documents subsequently struggled for years with the problem of preventing unauthorized use of their intellectual property.

Today, only AIA continues to offer hard copy documents for sale in addition to its electronic documents, which are available only through proprietary software that shows any changes from the printed forms. EJCDC’s electronic documents are available only as Word files and can be purchased as a group on a CD-ROM or downloaded individually from its member websites. ConsensusDOCS documents are available only electronically, through AGC’s proprietary DocuBuilder® software that was developed by BSD. Both the AIA and the ConsensusDOCS documents can be purchased by annual subscription or through a metered approach that deducts the cost of each document from a prepaid meter on the user’s computer.

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1 “AGC Members Unanimously Vote Against A201 Endorsement: General Terms and Conditions Document Fails to Provide Balance”; The Associated General Contractors of America; October 12, 2007.
2 Letter to the Editor, Engineering News Record, McGraw-Hill Construction; October 10, 2007.

Resources:

To obtain more information about the AIA documents program, or to order AIA documents, see www.aia.org.

To obtain more information about the EJCDC documents program, see www.ejcdc.org. To order EJCDC documents, see one of the member organization websites:
www.acec.org
www.asce.org
www.nspe.org
www.agc.org.

To obtain information about the ConsensusDOCS documents program, or to order ConsensusDOCS documents, see www.consensusdocs.org or www.agc.org.