Industry Priorities

Engineering News-Record (ENR) Magazine recently wrote a thought-provoking article entitled “Will Claims by Contractors on Big Design-Build Projects Ever End?” Progressive design-build is mentioned as a means to address some of the critiques that design-build faces today. Progressive design-build has attracted increasing usage on larger projects, especially horizontal construction.[i] So is progressive design-build (PDB) as good as a PB&J sandwich with the crusts cut off? And if so, what does that mean for standard form contract language around this approach?

Do you need help managing risk and delivering successful projects in the construction industry? Join us for a ConsensusDocs March 22nd webinar that will explore the key factors contributing to a successful project delivery process and highlight the risk management maxims that can help maximize your project’s chance of success. Register for the March 22nd webinar that will take place at 2 pm EST here https://bit.ly/agc-cd-w23q1. Each registration includes a copy of the recording.

In light of price escalation, supply chain challenges, and inflation, more industry practitioners are considering and using cost-of-the-work agreements that may or may not include a guaranteed maximum price (GMP). ConsensusDocs publishes several cost-of-the-work agreements and recently released a new standard contract document to support a cost-of-the-work agreement with a GMP as well as a directed change order standard form.

Prefabrication continues to grow in usage and impact. It is a hybrid of construction and manufacturing. Also, prefabrication includes on-site and off-site performance requirements. As such, several interesting legal issues arise that must be addressed contractually. Consequently, ConsensusDocs has just published the ConsensusDocs 253 Standard Agreement Between an Owner and Prefabricator.

The most used ConsensusDocs standard contract document is the ConsensusDocs 751 Standard Short Form Subcontract. The Associated General Contractors of America (AGC), through its Contract Documents Forum, has just released comments to this popularly used standard subcontract document. These comments can be found at www.agc.org/contract as a member-only download on the bottom-right side of the webpage. General contractors will want to consider these comments in tailoring subcontract language for their own project-specific purposes – regardless of whether they are using a standard form or bespoke contract.

ConsensusDocs and JAMS share common dispute mitigation and resolution goals and bring together a talented group of neutrals to contribute to better and more efficient construction contracting. ConsensusDocs (a family of standard form construction contracts promulgated by 40+ participating construction industry associations) provides form contracts that foster open communication pathways among the parties, a balanced allocation of risks, and avoidance or early mitigation of disputes. JAMS (a leading provider of arbitration, mediation, and related dispute resolution services through a select panel of distinguished neutrals) shares common goals with ConsensusDocs in promoting efficient and cost-effective resolution of the disputes that arise on construction projects – when they are unable to be avoided. Recognizing these shared interests, ConsensusDocs forms specifically identify JAMS mediation and arbitration among the types of alternative dispute mitigation and resolution offered.

The Associated General Contractors of America (AGC), through a working group of the AGC Contract Documents Forum, has just released comments to the ConsensusDocs 750 Standard Agreement Between the Constructor and Subcontractor. These comments follow on to comments AGC adopted in January of this year related to the ConsensusDocs 200 prime agreement that includes general terms and conditions. General contractors will want to consider these comments in tailoring standard ConsensusDocs contract document language for their own project-specific purposes. ConsensusDocs publishes contractual best practices that are fair to all parties and are created by a coalition of over 40 organizations. AGC’s comments provide a general contractor-specific perspective.

AGC of America’s (AGC) advocacy fund is proactively seeking to improve general contractors’ business environment by participating in a case before the Supreme Court of Tennessee. AGC and the AGC of Tennessee jointly submitted an amicus (or friend of the court) brief to preserve a general contractor’s right not to be sued for the damages twice under different legal theories by its contracting partner seeking to receive a double recovery.

What are some of the big picture differences between ConsensusDocs 200 and the AIA A201 on key terms and conditions? Below is an at-a-glance comparison of the most used standard construction contract documents.

Price escalation and supply chain disruptions continue to register as the number one issue in construction contracts today. The absence of a price escalation clause is considered a “killer clause” for many general contractors working on private vertical construction. Public owners are taking notice as well.