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Annotated AIA A101 Standard Form Agreement between Owner & Contractor Stipulated Sum Contract Comments
Contains reference to using AIA General Conditions with Contracts; Other significant clauses: Arbitration, Insurance (See AIA A201 General Conditions)

Article 2 - The work of this Contract

When filling out this section of the contract, it is important to keep in mind that you are not to totally rewrite your work write-ups or drawings. It is best to just describe the work for the contractor to be as provided as drawings dated "x" and/or work write-ups and specifications dated "y". Be sure to leave anything out not clearly referencing those documents. Doing that could cause a gap in your contract coverage and could lead to future litigation.

Article 3.1 - Date of Commencement and Substantial Completion

It is always best to note that the date of commencement will be given to the contractor based upon a formal "notice to proceed". This "notice to proceed" provides protection to both parties, and is a crucial element in the contractual arrangement. As a related issue, usually a contract needs to be prepared prior to closings, etc. If construction is delayed and you are forced to move back when the contract is able to start and if a fixed date is in the contract you will be revisiting and resigning of the contract. There is always the risk that this will causes old issues to be revisited and could further delay your project. Choose your dates carefully, and allow time for delays if possible.

As related to a substantial completion date, we always recommend that you use the number of calendar days after the date of commencement or any date that is a drop dead date if your completion is not tied to the "notice to proceed" date.

Article 4.2 - Contract Sum

In negotiating the final lump sum value of the project, sometimes the owner has accepted certain alternates, either add alternates or deduct alternates based on the contract documents. They need to be listed here to note that they have been accepted. If they are not listed here as accepted they will not become part of the project and the project price will be based on the base drawings only.

Article 4.3 - Contract Sum

Many times in a contract there are pieces of the job that may not be quantifiable due to the fact that some conditions many be hidden. An example of this is hitting rock or hitting unsuitable fill. A reasonable way to handle this is to establish a unit price up front before you have a contract with the contractor. Describing what those prices are both in the positive or in the negative. For instance if rock is hit and can be quantifiable by a number of cubic yards, the owner can allow the contractor to proceed quickly without a formal change order based on a quantifiable amount of rock to be determined later. This avoids many arguments later in the project, and minimizes the risk of inflated pricing in a change order.

Article 5.2 - Progress Payments

We recommend that contractors on larger projects (over one million and a half dollars) be paid once a month. On smaller project we recommend that contractors be paid once every two weeks if that can be accommodated via the funding sources and government agencies that are involved in the project. We do not recommend a period less than two weeks because then you spend all of your time doing vouchers.

Article 5.8 - Progress Payments

Retainage is standard to be held at 10% for the value of the project. However, it has become somewhat accepted for the retainage to be reduced to 5% when the project is 50% complete. If you are confident in your contractor, our recommendation for ease of paperwork is that a 10% retainer should be held on the project up until 50% of the project is completed, then no further retainage should be held for the balance of the project. This will allow your retainage to be decreasing from 10% to 5% while at the end of the project there will be a 5% retainage. We have found this to be both a simple and reasonable solution.

Article 6 - Final Payment

Consent of Surety For bonded projects. It is important under article 6 that you require the contractor provide a completed consent of surety form from the bonding company on AIA G707 prior to issuance of any final payment of the contract. This 3

protects you from any damages that may occur and gets a sign off to you that the bonding company is pleased with the project and they will honor their commitments. Certificate of Substantial Completion Final payment should be tied to the signing of a formal certificate of substantial completion AIA G704 to be signed by the architect, contractor and owner which will establish the legal ending date for the project based on time and any liquidated damages that may occur. Article 9 - Numeration of Contract Documents It is important that each individual drawing sheet be both noted for its title and date of last revision. This calls for a specification listing each of the sections, which are part of the specifications for the project . This is a critical issue that is many times overlooked and that needs to be handled in great detail.