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December 09, 2019

Tighten your Project Budget and Time with the AIA’s Updated Construction Management Documents

Robin G. Banks

In recent years, alternative project delivery methods, including construction management, have increased significantly in popularity due to Owners’ experiences with cost overruns and delayed delivery on traditional design-bid-build projects.  By engaging construction managers early in the process, Owners gain valuable input and insight which helps them better manage their project budget and timeline.  The American Institute of Architects (AIA) released updates to its Construction Manager as Constructor documents in November 2019, with the Construction Manager as Adviser documents to be released later in the year.  This article highlights the key updates made in the 2019 Construction Management documents. 

The 2019 Construction Management documents continue to provide Owners with two options, which can be used independently or in concert with each other, for delivery of construction management services.  One option is through a Construction Manager as Constructor (CMc), under which the Owner hires the CMc to provide advice during preconstruction and then, ideally, to construct the project; the other option is through a Construction Manager as Adviser (CMa), under which the Owner hires the CM as its agent to provide advice and administer the project, together with the Architect, during preconstruction and construction.  

Like its design-bid-build and design-build families of documents, the AIA updates its Construction Management documents on a ten-year cycle.  The new documents incorporate evolving trends identified by industry participants and liaisons, as well as the 2017 updates to the AIA’s “flagship” design-bid-build documents. 

Construction Manager as Constructor (CMc) – A133-2019 and A134-2019

The CMc documents continue to offer two Owner-CMc Agreement options – one where the basis of payment is Cost of the Work with a Guaranteed Maximum Price (A133-2019) and the other where the basis of payment is Cost of the Work without a Guaranteed Maximum Price (A134-2019).  Both of these documents have undergone structural revisions to add an Initial Information section and, generally, be more consistent with the design-bid-build Owner-Contractor Agreements. 

CMc Preconstruction Phase Services

In response to feedback from some of the larger construction management firms across the country, the CMc Agreements now (1) allow the parties greater flexibility in crafting the CMc’s scope for Preconstruction Phase services, (2) provide a greater role for the CMc in advising and making recommendations to the Owner and architect on proposed site use and improvements, constructability, and schedules, and selection of materials, building systems, and equipment during the Preconstruction Phase, (3) obligate the CMc to work collaboratively with the Owner and Architect to establish BIM and digital data protocols, consult with the Architect regarding design delegation services to be provided by the CMc in the Construction Phase, and furnish a Preconstruction services staffing plan, all during the Preconstruction Phase.  Additionally, although prior iterations of the CMc Agreements did not include a performance standard or any insurance obligations for the CMc during Preconstruction Phase services, the 2019 documents (1) include a new standard of care that requires the CMc to “exercise reasonable care in performing its Preconstruction Services,” and (2) contain insurance requirements for the CMc during the Preconstruction Phase that mirror the insurance requirements for the Architect. 

Transitioning from Preconstruction to Construction

 Unlike the design-bid-build delivery method that follows a linear process, i.e., where, design precedes construction, the CMc delivery method does not.  Industry feedback confirmed that certain aspects of construction, such as ordering of long lead items, demolition, site work, foundations, etc., commence during the Preconstruction Phase, before the Owner issues the full notice to proceed.  To accommodate this possibility, the CMc documents now contain a provision acknowledging that the Construction Phase commences upon the execution of the GMP Amendment (A133-2019), approval of the Control Estimate (A134-2019), or prior to acceptance or approval “by written agreement of the parties.”  Intending to provide the parties with the maximum amount of flexibility in crafting that written agreement, the CMc documents only require that the parties describe the early work to be performed by the CMc and detail any insurance and bond requirements for that work.  Terms such as schedule, compensation, retention, indemnification, and dispute resolution, among others, can be added by the parties, if desired.

Substantial Completion Updates

One other unique update to the CMc documents relates to Substantial Completion.  A133-2019, Exhibit A (the GMP Amendment) now contains an expanded section on Substantial Completion consistent with the 2017 Owner-Contractor Agreements.  A134-2019, on the other hand, contains an entirely new section that allows the parties to establish – in the Agreement itself – a date for Substantial Completion.  Under prior versions of A134, the parties had no contractual obligation to address Substantial Completion until the CM submitted the control estimate to the Owner and there was no mention of Substantial Completion. 

Updates to Other CMc Family Documents

Like with the Owner-CMc Agreements (A133-2019 and A134-2019), the AIA updated the Owner-Architect Agreement (B133-2019) under a CMc delivery method, for consistency with the 2017 Owner-Architect Agreements.  It also created E234-2019, a Sustainable Projects Exhibit, for use with a CMc project, which is fashioned after E204-2017, but incorporates the role of the CMc into the sustainability process.

Construction Manager as Adviser (CMa) – C132-2019

For a project in which an Owner desires a CMa, the AIA continues to offer the C132-2019.  Updates to C132 include the replacement of the phrase “Multiple Prime Contractors” with the defined term “Contractors” in recognition of the fact that the Agreement can be used with a Single (Prime) Contractor, even though it is intended to be used with Multiple Prime Contractors. 

CMa Preconstruction and Construction Phase Services

Responding to industry feedback, C132-2019 now expands the CMa’s scope and responsibilities during all phases of a project, while preserving the Architect’s traditional role.  Like under the CMc documents, the CMa works collaboratively with the Owner and Architect to establish BIM and digital data protocols and is designated as the “Responsible Project Participant” under E203-2013.  During the Preconstruction Phase, the CMa now (1) reviews recommendations for systems, materials, or equipment for their impact on cost, schedule, sequencing, constructability, and coordination among Contractors, (2) reviews and evaluates Contractors selected by the Owner and Architect to perform design assist services and makes recommendations if the CMa determines that the design adversely affects cost, scope, schedule, constructability, or quality of the Project, and (3) has a greater role in developing the bidding documents.  During the Construction Phase, the CMa provides more review and analysis (e.g., of submittals by Contractors’ design professionals for sequencing, constructability, and coordination impacts on other Contractors) and coordination of on-site observation of tests and inspections.  Finally, an expanded menu of Supplemental Services in C132-2019 now provides Owners with the option for services that were often added to a CMa’s scope, such as development of a commissioning plan and stakeholder relationships management, but were not considered “standard” CMa services. 

Substantial Completion Updates

Across the entire suite of the CMa documents (i.e., C132-2019 (the Owner-CMa Agreement), B132-2019 (the Owner-Architect Agreement), A132-2019 (the Owner-Contractor Agreement), and A232-2019 (the General Conditions for the Owner-Contractor Agreement) and G-series CMa forms, the concept of Substantial Completion has been clarified.  All of the CMa documents contemplate the establishment of a single capital “S”ubstantial capital “C”ompletion date and the issuance of a single Certificate of Substantial Completion for the entire Project; however, they acknowledge that the work of each of the Contractors may be “substantially complete” at different times during the Project.  The lowercase “substantial completion” date applicable to each Contractor’s Work is established in the A132-2019 Owner-Contractor Agreement.  Additionally, all warranties and other items that traditionally begin to run at substantial completion will begin on the Project Substantial Completion Date, rather than the substantial completion date for the Contractor’s Work. 

Updates to Other CMa Family Documents

Like with the CMc documents, the AIA updated all of the CMa Agreements for consistency with the 2017 revisions to the design-bid-build documents and created E235-2019, a Sustainable Projects Exhibit, which incorporates the role of the CMa throughout the sustainability process.

Supplementary Materials

In conjunction with the updated 2019 CM documents, the AIA publishes two supplementary guides (A503 for CMc and A533 for CMa) on its website to aid practitioners with issues that are not addressed in the standard documents, but might be relevant to a particular CM project.  Of these edits, perhaps the most interesting may be edits to A201®-2017 and A232-2019 that are designed to clarify certain provisions in the context of Cost of the Work Agreements.

For a more detailed discussion of the issues raised in this article, please attend the ABA Forum on Construction Law’s Annual Meeting in Seattle, Washington in April 2020, during which two interactive plenary sessions will be devoted to construction management under the 2019 AIA Construction Management Contracts. 

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Robin G. Banks

Goldberg & Banks, P.C. Pikesville, MD