Source: https://buildchicagolaw.com/aias-2019-cma-contract-documents/
Timestamp: 2020-07-11 10:02:46
Document Index: 475386809

Matched Legal Cases: ['§ 4', '§9', '§9', '§9', '§ 9', '§9', '§ 10']

AIA's New 2019 CMc and CMa Contract Documents - Jeremy S. Baker
AIA’s New 2019 CMc and CMa Contract Documents
Construction Management (CM) is not a single approach to project delivery. Rather, it is a sliding scale with endless possible permutations depending on the project and its participants.
The ends of the spectrum are Construction Manager as Constructor (CMc), which is also sometimes known as “Construction Manager at Risk,” and the Construction Manager as Adviser (CMa) delivery method.
This post discusses the CM project delivery method, both in general terms and as framed by the American Institute of Architects’ (AIA) new 2019 CMc and CMa Contract Documents.
The CMc approach is similar to the traditional tripartite method of project delivery. There, the project Owner contracts directly with the constructor, often a general contractor (GC), and the lead designer. In the CMc approach, the constructor is the CMc rather than a GC.
In both cases, the CMc and GC directly enter into subcontracts and mark them up with fee. In exchange for that markup, both the CMc and GC are potentially liable to the Owner for things like subcontractor performance, cost, and schedule. Often, the Owner does not hire the GC until the designer has completed construction documents.
In contrast to the GC approach, the hallmark of the CMc approach is early involvement of the constructor in the design phase, before the plans are complete. The advantages of CMc involvement in the design phase are clear. They include getting practical CMc input on things like constructability, cost, and value engineering. Early project phase constructor involvement is not new.
Recent and sustained industry interest in delivery methods like design-build and integrated project delivery show that project stakeholders continue to see the advantage of involving the constructor before the design is complete.
Note that the various AIA contract forms associated with the CMc project delivery method use AIA Document A201-2017 as their General Conditions. In the CMc approach, like the GC approach, the Architect performs the typical A201-inspired construction administration functions in the Construction Phase.
That both the GC and CMc delivery methods utilize the A201 General Conditions demonstrates the similarities between the GC and CMc approaches.
In the CMa approach, the Owner buys a layer of consulting in exchange for the CMa’s fee. As the name implies, the CMa merely serves as an adviser to the Owner.
Unlike the CMc, which holds the subcontracts, the CMa is not the project constructor. Thus, the CMa is not directly accountable to the Owner for cost, schedule, or subcontractor performance. That does not mean the CMa is without liability exposure.
The CMa’s central project role – which encompasses a blend of duties typically reserved for GCs and designers – can make the CMa an attractive target for claims.
Often, attorneys who seek to target defendants for potential claims can find contract language that puts the CMa at the center of various project activities. This can give claimants a basis to allege the existence of a “duty” on the part of the CMa, which can lead to theoretical liability exposure.
Suffice to say, there often exists a basis to argue that the CMa had a contractual duty for safety, submittal review, coordination, and other tasks central to claims. It can be easy to initially assert a claim against the CMa, but potentially difficult for defense attorneys to win early dispositive motions.
Another reason the CMa can be an attractive target for claims is the insurance it carries.
The CMa’s role encompasses both traditional GC and designer duties; a role broad enough to be insurable, in part, by both Commercial General Liability (CGL) and Professional Liability (PL) policies.
This means successful claims against a CMa might be satisfied by insurance policy proceeds even if the CMa itself lacks the assets to satisfy a judgment against it.
When considering potential targets for claims, attorneys focus not just on liability exposure and the likelihood of victory, but also whether they can recover dollars if they win.
CMa v. CMc: Are They Substantially Different Approaches?
At first blush, it is tempting to say “yes” – the CMa approach is a substantially different method of project delivery than the CMc approach.
But the key question is, different for whom?
CMa projects are not particularly different for constructors, which face similar risks and rewards with the CMa approach as they do with other project delivery methods. On CMa projects, constructors are still responsible to construct on time and on budget, safely, and in accordance with the construction documents.
From the perspective of the Owner and Architect, the CMa approach can differ from other delivery methods to a greater extent. This is because CMa often handles tasks the AIA’s A201 family of documents reserves for the Architect.
For this reason the CMa approach has its own General Conditions: AIA Document A232-2019 General Conditions of the Contract for Construction, Construction Manager as Adviser Edition.
The AIA has also created 2019 updates of other CMa-specific documents, e.g., G731-2019 (Change Order), G732-2019 (Application and Certificate for Payment), G733-2019 (Construction Change Directive) and G734-2019 (Certificate of Substantial Completion), which require the CMa’s signature along with that of the Architect and Contractor. With the Change Order and Construction Change Directive (CCD) forms, the Owner also must sign.
However, a comparison of A232 and A201 General Conditions documents reveals that they have more similarities than differences. The A232 document simply carves out a role for the CMa.
Therefore, rather than say the CMa delivery method is substantially different, perhaps it is more accurate to say CMa delivery method represents the potential for substantial differences from CMc delivery method?
The specifics of the project dictate the extent to which the CMa delivery method is meaningfully different than the CMc approach.
For example, while the CMa approach works with single GC projects, the CMa approach also lends itself well to projects where the Owner directly hires and contracts with multiple prime contractors (the “Multiple Prime Contractor” approach) rather than retaining a single GC.
This is a logical feature of the AIA’s CMa contact documents. Many project owners – especially those who are only occasional, or unsophisticated, consumers of design and construction services – lack the ability to manage Multiple Prime Contractors. However, they can outsource that task to a CMa.
Compatibility with the Multiple Prime Contractor method of project delivery is a key aspect of the AIA’s CMa Contract Documents.
Similarly, the CMa approach is compatible with projects where the Contractor’s basis of payment is either fixed fee or cost reimbursement.
AIA Document A132-2019, the Standard Form of Agreement Between Owner and Contractor, CMa Edition, allows users to “check the box” to select between Stipulated Sum pricing or Cost of the Work Plus the Contractor’s Fee with (or without) a Guaranteed Maximum Price. On the latter, the A132-2019 anticipates that the important “Cost of the Work” definition will be established through its Exhibit B, entitled “Determination of the Cost of the Work.”
Flourishes like the Owner’s ability to use either Multiple Prime Contractors or a single GC, and to pay a Stipulated Sum or the Cost of the Work, can introduce complexity into the CMa method of project delivery. These distinctions can affect Owner, Architect, Contractor, and CMa roles, risks, and rewards.
A CMa project which involves a single GC paid a stipulated sum, all things being equal, is not that complex. However, if the CMa is tasked to manage Multiple Prime Contractors paid on a Cost of the Work basis, that CMa project becomes rather different than a CMc or single GC project.
That CMa projects involve one additional participant – the CMa – is the essential difference between CMc and CMa project delivery methods. That extra party makes the CMa method incompatible with certain standard AIA Contract Documents.
For example, GC projects use the standard AIA Document E204-2017 Sustainable Projects Exhibit. However, the AIA developed an alternate version for CMa projects: AIA Document E235-2019, Sustainable Projects Exhibit, Construction Manager as Adviser Edition. Some of their differences are discussed below.
Chief among them are recognition of the extra party, the CMa. Like the CMa’s unique General Conditions document, A232-2019, the CMa-specific Sustainable Projects Exhibit, E235-2019, acknowledges that the CMa is an important stakeholder, along with the Owner, Architect, and Contractor, on projects which target “Sustainable Objectives.”
In other cases, CMa projects use standard AIA Contract Documents.
This is true for the AIA’s Digital Practice Documents. There are no CMa-specific versions of those standard AIA forms. They include AIA Documents E203-2013, Building Information Modeling (BIM) and Digital Data Exhibit; G201-2013, Project Digital Data Protocol; and G202-2013, Project BIM Protocol.
However, their use when the CMa, an additional important stakeholder, is involved can add a wrinkle of complexity. The CMa’s role, responsibilities, and risks must be considered. Thus, users of the standard AIA Digital Practice Documents should consider whether CMa-specific edits are appropriate on CMa projects.
The similarity of the CMc and single GC approaches can make the CMc approach simpler to implement than the CMa approach. Perhaps this is why the AIA’s CMc Contract Document suite are more frequently used than its CMa Contract Document suite.
However, the CMa approach has its advantages. CMa should not be overlooked as a viable delivery method, particularly on projects in which the Owner will hire Multiple Prime Contractors rather than a single GC.
Other CMa/CMc Standard Contract Forms
Other industry groups, like the Construction Management Association of America (CMAA) and ConsensusDocs, have also developed a variety of standard contract forms for Construction Management type projects.
The CMAA was involved in developing the AIA’s 2019 Construction Management Contract Documents, both CMa and CMc. The CMAA offered substantial input regarding the proper CMa and CMc roles and responsibilities. It publishes eight principal forms designed to establish the contractual relationship when the Construction Manager is hired as the Owner’s Agent (A-1, A-2, A-3, A-4) or hired as the Construction Manager “At Risk” (CMAR-1, CMAR-2, CMAR-3, CMAR-4).
The AIA’s CMa Contract Documents
Up to eleven documents comprise the AIA’s standard forms for the CMa method of project delivery, depending on project specifics.
First is the Owner’s contract with the CMa: AIA Document C132-2019, Standard Form of Agreement Between Owner and CMa.
Second is the Owner’s contract with the Architect: AIA Document B132-2019, Standard Form of Agreement Between Owner and Architect, CMa Edition.
The next five documents form part of the Owner’s contract with the Contractor. Of those, two are optional: the Sustainable Projects and Determination of the Cost of the Work exhibits. Those seven documents, plus four additional CMa-specific forms, are reviewed and briefly discussed below.
I. Owner-Contractor Agreements
The five AIA Contract Documents from the CMa family which comprise the Owner’s agreement with the Contractor are summarized briefly below.
A132-2019: Owner-Contractor Agreement. The 2019 version of the A132 contains substantial revisions. However, few are specific to the CMa delivery method. The changes bring the A132-2019 in line with other recent AIA Contract Document revisions. Most changes in A132-2019 are taken verbatim from the AIA’s principal Owner-Contractor agreements, including A101-2017 (Stipulated Sum), A102-2017 (Cost of the Work Plus a Fee with a Guaranteed Maximum Price (GMP)), A103-2017 (Cost of the Work Plus a Fee without a GMP). Many changes are thus unrelated to CMa delivery method.
A132-2019 Exhibit A: Insurance & Bonds Exhibit. The CMa-specific A132-2019 Exhibit A is nearly verbatim to A101-2017 Exhibit A, the insurance and bonds exhibit to the A201 family documents. One important difference is A132 Exhibit A requires the Contractor to cause the CMa and its consultants to be named as Additional Insureds under the Contractor’s CGL insurance policies.
A132-2019 Exhibit B: Cost of Work Determination. A132-2019 can be utilized with fixed fee and cost reimbursement methods of Contractor compensation. Exhibit B makes the latter possible. It describes which costs comprise “The Cost of the Work” to distinguish them from costs not reimbursable to the Contractor. Optional Exhibit B is a practical tool, but it is not a new idea. It replaces a similar predecessor exhibit to A132-2009. Exhibit B facilitates project fast-tracking, where some construction precedes completion of drawings, with a later determination of the GMP – a delivery method variation where an Owner might want CMa assistance.
A232-2019: General Conditions. As noted above, the flagship A201-2019 General Conditions is incompatible with the CMa Contract Documents. A CMa-specific General Conditions document, the A232-2019, is used with the CMa family of AIA Contract Documents, i.e., the A132-2019 (CMa-specific Owner-Contractor Agreement), the B132-2019 (CMa-specific Owner-Architect Agreement), and the C132-2019 (CMa-Owner Agreement). Later sections of this paper address the A232 in more detail. They address how the CMa shares scope of work traditionally reserved for the Architect and Contractor, and performs more intensive contract administration – particularly in the Construction Phase – than an Architect could offer. Even though the A232, like the A201, is technically part of the Owner-Contractor Agreement, it still sets out duties of others like the Architect and CMa.
E235-2019: Sustainable Projects Exhibit. Another optional contract exhibit, the E235-2019 is similar to the standard Sustainable Projects Exhibit, E204-2017, which the AIA introduced in 2017. Both are useful tools for Owners, Architects, and Contractors who target “Sustainable Objectives.” This paper addresses the E235 below. Most of its differences from the E204 recognize that the CMa is well-suited to assume some of the “quarterback” functions the E204 reserves, by default, for the Architect. The CMa-specific Exhibit adds nearly two pages of text to describe the tasks assigned to the CMa.
II. Owner-CMa Agreement: C132-2019
For the CMa, the updated C132 presents different opportunities and liability exposures than its predecessor, the C132-2009. Changes implicate things like coordination, cost and schedule, the payment process, retention of documents, and the Multiple Prime Contractors method of project delivery. Note that specific language about CMa rights and duties can be found documents other than the C132-2019, including the CMa-specific General Conditions, A232-2019, and the Owner’s agreements with the Architect, B132-2019, and Contractor, A132-2019.
III. Owner-Architect Agreement: B132-2019
Like its 2009 predecessor, B132-2019 does contain substantial CMa-specific language to acknowledge the Architect’s role-sharing with CMa, and certain CMa-specific roles in things like cost estimation and value engineering. Many changes are non CMa-specific and merely bring the B132-2019 in line with the B101-2019, Standard Form of Agreement Between Owner and Architect. Some CMa-specific changes in the 2019 version of the B132 include an expanded role in reviewing Contractor submittals, including making recommendations for approval, providing documents to the Owner, and facilitating communications among the project’s participants.
The last four documents which comprise the AIA’s standard forms for the CMa method of project delivery were mentioned above and include G731-2019 (Change Order, CMa Edition), G732-2019 (Application and Certificate for Payment, CMa Edition), G733-2019 (CCD, CMa Edition) and G734-2019 (Certificate of Substantial Completion, CMa Edition). They are quite similar to other AIA standard forms, but acknowledge the CMa and require its signature.
The AIA’s CMc Contract Documents
The AIA’s CMc documents are less numerous than its CMa documents. This is because the CMc approach is similar to the traditional three-party method of project delivery, where the Owner, Architect, and GC are the primary stakeholders. The fourth party, the CMa, is almost always absent.
With the CMc approach, early involvement of the constructor in the design phase, before the plans are complete, is a key feature. The advantages of CMc involvement in the design phase include getting CMc input on things like constructability, cost, and value engineering. Early CMc involvement also facilitates a fast-tracked start of construction work, before the design is complete.
This means that CMc contracts are often on a cost reimbursement basis, i.e., Cost-Plus a Fee with – or without – a GMP.
Six principal documents comprise the AIA’s standard forms for the CMc method of project delivery, depending on the specifics of the project in question.
AIA Document A133-2019, Standard Form of Agreement Between Owner and CMc where the basis of payment is the Cost of the Work Plus a Fee with a GMP. This is the CMc contract form when the Owner is protected by a GMP. The CMc provides preconstruction services during the design phase. When the design is sufficiently developed for the CMc to propose its costs and the schedule, the CMc provides the Owner a GMP proposal. The A133 has two companion documents: A133-2019 standard Exhibit A (GMP Amendment) and Exhibit B (Insurance and Bonds). The A133-2019 anticipates that the A201-2019 General Conditions of the Contract for Construction will govern the three-way relationship between the Owner, Architect, and CMc.
A134-2019, Standard Form of Agreement Between Owner and CMc where the basis of payment is the Cost of the Work Plus a Fee without a GMP. This is the Owner’s contract with the CMc if there is no GMP. The A134 has a single companion document, A134-2019 standard Exhibit A (Insurance and Bonds). The no GMP version of the CMc contract is used much more sparingly, as Owners should hesitate to hire a constructor that is not bound to honor a GMP (or build to a stipulated sum). To afford the Owner more control over the construction costs it must reimburse to the CMc, the A143-2019 anticipates the Owner will keep an eye on costs incurred through regular review of a “Control Estimate” that should be periodically revised as the project proceeds.
AIA Document B133-2019, Standard Form of Agreement Between Owner and Architect, CMc Edition. The B133-2019 assumes that the CMa will provide preconstruction services as the Architect designs, including cost estimates and construction schedules. With this information, the Architect agrees to meet the Owner’s budget for the Cost of the Work at the Design Development stage. Also intended for use with A201-2019 General Conditions of the Contract for Construction, the B133-2019 assumes that considerable Architect duties, including with respect to construction administration, will be spelled out in the A201 General Conditions document.
The CMc documents also include one CMc-specific form: E234–2019, Sustainable Projects Exhibit, CMc Edition. This single form illustrates that CMc is simpler, in some ways, than CMa.
Unlike the CMc documents, the CMa documents which standard forms which acknowledge the CMa, i.e., the fourth major stakeholder, and require its signature: the G731-2019 (Change Order, CMa Edition), G732-2019 (Application and Certificate for Payment, CMa Edition), G733-2019 (CCD, CMa Edition) and G734-2019 (Certificate of Substantial Completion, CMa Edition).
Based on anecdotal information, the AIA’s CMc documents are more commonly used than its CMa documents. Perhaps it is because the CMc approach is not just simpler, it is more like the traditional tripartite Owner-Architect-GC method of project delivery, which is well understood and commonly accepted?
Certain Basic Differences Between CMc and CMa
The clearly-defined roles of the Architect and GC/CMc on “traditional” tripartite projects are familiar. The Architect prepares the design and, often, performs construction administration. The constructor, whether it is a GC or CMc, is responsible for things like construction means and methods, and safety. Although the designer and constructor closely collaborate, they have distinctly different roles and spheres of influence.
Introducing another major stakeholder, the CMa, makes the project more Venn diagram-like. On CMa projects, the CMa’s role overlaps those of the traditional designer and constructor.
The CMa has partial responsibility for traditional Architect and GC/CMc tasks and roles on CMa projects.
For example, the CMa is often bound by a designer-like standard of care. This might be “the skill and care ordinarily provided by construction managers practicing in the same or similar locality under the same or similar circumstances.”
The CMa often performs certain services traditionally performed by designers, i.e, review of shop drawings, product data, samples, and other submittals).
And, the CMa often carries PL insurance similar to what designers traditionally carry.
The CMa also performs GC/CMc-like tasks, including perhaps:
reviewing, analyzing, scheduling and coordinating the overall sequence of construction and assignment of space where the Contractors are performing
keeping a daily log containing a record of weather, each Contractor’s work on the site, number of workers, identification of equipment, the work accomplished, or problems encountered
arranging for the delivery, storage, protection and security of Owner-purchased materials, systems and equipment that are a part of the project until such items are incorporated into the work
The CMa often carries GC/CMc-like insurance, like CGL insurance for each occurrence of bodily injury or property damage.
The AIA’s CMa suite of Contract Documents attempt to parse the traditional responsibilities of the Architect and GC/CMc to “make room” for the CMa to play its role on the project. Theoretically, this should result in better overall coverage and attention the many project tasks.
CMa A232 General Conditions v. Standard A201 General Conditions
Comparing A201-2017, the “standard” General Conditions for GC/CMc projects, and the CMa-specific General Conditions, A232-2019, is interesting and instructive. The A201 and A232 are similar. However, certain unique aspects of the CMa-specific General Conditions shed light on how the CMa delivery method differs from the single GC and CMc delivery methods.
A232-2019’s Allocation of Architect and CMa Responsibility
When the AIA prepared the 2019 CMa documents, the AIA received industry input which, unsurprisingly, confirmed that the CMa should not substantially displace the Architect in the Construction Phase. This is true even though the CMa is, for example, likely present at the project site much more frequently than the Architect.
Traditional stakeholders, like investors, have grown accustomed to the Architect playing a role in the project until its completion. Even on CMa projects, the Owner’s lender might nevertheless want the Architect to provide a certification that, to the best of the Architect’s knowledge, information, and belief, the building was constructed in accordance with the design.
Thus, under the A232-2019, the CMa and Architect share responsibility for Construction Phase Tasks.
In the A232-2019, the CMa and Architect both serve as a limited agent of – and the protector of – the Owner. Both are required to “…provide administration of the Contract as described in the Contract Documents…” and “…be the Owner’s representatives during construction…” A232-2019, § 4.2.1. By contrast, the A201-2019, like its predecessors, reserves this role for the Architect.
The CMa, for example, has considerable responsibility for reviewing and approving Contractor payment applications; a function usually performed by Architects under the A201 family of documents. However, this responsibility is shared between the Architect and CMa under the AIA Contract Documents specific to the CMa method of project delivery.
Where there is only one Contractor, the CMa reviews its Applications for Payment, and certifies the amount due before forwarding them on to the Architect for its ultimate decision. A232-2019, §9.4.1.
If there is more than one Contractor, the process is similar, except the CMa also prepares a summary of the Contractors’ Applications for Payment, and an overall Project Payment Application, before forwarding them to the Architect for final decision. A232-2019, §9.4.2. The Architect always retains authority to not certify some or all of any Contractor’s payment request. A232-2019, §9.4.2.1
Similar payment-related sharing of authority between the CMa and Architect are found throughout the AIA Contract Documents. This sharing of responsibility carries through to final completion and final payment.
When a Contractor believes it has completed the work, it notifies the CMa and provides it a final Application for Payment, which the CMa forwards to the Architect for its review, and ultimate decision, once the CMa agrees with the Contractor. A232-2019, § 9.10. When they agree, the CMa and Architect each issue a final certification stating that the work is complete, in accordance with the Contract Documents, and that the balances due to Contractors are due and payable. A232-2019, §9.10.1.
While this is somewhat an over-simplification, many A232 differences from the A201 are equal to inserting “…and Construction Manager” next to “Architect” to signify sharing responsibilities the A201 reserves for the Architect.
Other differences between the A201 and A232 take advantage of the more in-depth involvement of the CMa. Typically, the CMa is on the jobsite frequently, and the Architect is on-site only occasionally, during the Construction Phase. This makes it possible for the CMa to assume a more involved role during the Construction Phase than would make sense for the Architect on a traditional project.
A232-2019: Allocation of Contractor and CMa Responsibility
Certain tasks reserved exclusively for the Contractor in the A201-2019 are shared with the CMa in the A232-2019.
For example, the A232 requires the CMa to play at least some role – although, a secondary role – in project safety: “…The Contractor shall submit the Contractor’s safety program to the Construction Manager for review and coordination with the safety programs of other Contractors…” A232-2019, § 10.1.
Because the CMa documents work well with the Multiple Prime Contractor approach, this requirement makes sense. When more than one Contractor works on the same project site, someone should consider their safety programs holistically. For various reasons this task is better suited to a CMa than an Architect.
However, recognizing that the Contractors themselves are in the best position to ensure safety, the requirement for the CMa to play some role in safety is tempered by other familiar language placing most of the responsibilities on Contractors.
The CMc project delivery method is quite similar to the GC method of project delivery. The main difference is the CMc is involved in the project earlier, usually in the design phase, where the CMc provides input on things like the cost and constructibility of the design.
The CMa approach represents at least the potential for substantial differences compared to other project delivery methods,. The key questions are, different for whom and under what circumstances? CMa projects are often not that different for Contractors, which face similar “construction-type” risks and rewards as they do with projects delivered in other ways. The CMa – a fourth project stakeholder, along with the Owner, Architect and Contractor – often shares duties usually reserved for the Architect exclusively under the A201 family of documents. The fact an Owner can buy another layer of consulting from the CMa does not change the project much; particularly if the Owner hires a single Contractor and pays it a Stipulated Sum.
Notably, the CMa delivery method is adaptable. An Owner’s ability to use Multiple Prime Contractors and/or pay on a “Cost of the Work” basis can introduce complexity into the CMa project delivery method. These distinctions can affect Owner, Architect, Contractor, and CMa roles, risks, and rewards.
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