Christine Ciarlo | Saul Ewing
Earlier this year, the American Institute of Architects (“AIA”) released updated form contract documents for traditional design-build (“Traditional DB”) construction projects and introduced a new set of progressive design-build (“Progressive DB”) forms. In a design-build project, the owner contracts directly with one entity to provide both design and construction services, as opposed to the more traditional project delivery model by which owners hire an architect and a general contractor separately.
Traditional DB and Progressive DB projects differ primarily in their contract structure, timing of price negotiations and level of collaboration. Traditional DB projects typically involve a lump-sum contract for both design and construction services, usually after a design is partially complete. Progressive DB projects, on the other hand, start with a qualifications-based selection of the design-builder and then progressing to a detailed design and contract price negotiation between the design-builder and the owner which results in a guaranteed maximum price for the project.
The new A141PDB-2024 (Progressive DB) form was created to address the specific needs of Progressive DB projects. This form provides a more flexible and defined contract, reflecting the greater owner involvement in the design phase and allowing for a more evolutionary design process, specifically adding provisions to address the design phase and preconstruction work that will be accomplished prior to the execution of the design-build amendment and the construction phase.
Below are 5 notable differences among the prior A141-2014 form, updated A141-2024 (Traditional DB) form and new A141PDB-2024 (Progressive DB) form.
- Method of Compensation
The A141-2014 and A141-2024 (Traditional DB) can be used where the method of compensation of the design-builder is for a stipulated sum or for the cost of the work plus the design-builder’s fee (with or without a guaranteed maximum price). The A141PDB-2024 (Progressive DB) is intended to be used where the method of compensation is the cost of the work plus the design-builder’s fee (with a guaranteed maximum price). Under the A141PDB-2024 (Progressive DB) framework, the parties work together during the design phase to agree upon a detailed budget and control estimate that provides sufficient information to establish a guaranteed maximum price. - Copyrights, Licenses, Instruments of Service
In the A141-2014 form, the design-builder grants conditional and limited license to the owner to use the instruments of service (which can include plans, studies, surveys, models, sketches, drawings, specifications, and other similar materials) to construct, use, maintain, alter, and add to the project. In the A141-2024 (Traditional DB) and A141PDB-2024 (Progressive DB) forms, the design-builder grants a nonexclusive license to the owner, which allows the design-builder to grant the same rights to other parties. Owners typically are not in favor of allowing architects and designers to use their designs for other projects. - Construction Warranties
In the A141-2024 (Traditional DB) and A141PDB-2024 (Progressive DB), the design-builder warrants to the owner that the construction work (as opposed to the materials and equipment furnished by design-builder) will be of good quality and new and will conform to the requirements of the design-build documents and will be free from defects. This change expands the scope of the warranty to include the construction, services to support construction, and all other labor, materials, equipment and services provided by design-builder to fulfill its obligations under the contract. - Initial Decision Maker
In the A141-2014, the owner renders the initial decision on claims between the owner and the design-builder. In the A141-2024 (Traditional DB) and A141PDB-2024 (Progressive DB), the parties can initially attempt to resolve claims by either meeting and conferring or referring the claim to a project neutral. This change allows the parties to attempt to resolve any claims on a more equal footing before being subject to a formal mediation or other binding dispute resolution. - Limitations on Design-Builder’s Liability
The A141-PDB-2024 (Progressive DB) includes a new section that was not included in the A141-2014 or the A141-2024 (Traditional DB) – Section 16.1.8. It gives the parties the option to limit the design-builder’s liability for damages, expenses, and costs to amounts paid by insurance or to a cap with some general exclusions. Also, the A141-2024 (Traditional DB) and A141PDB-2024 (Progressive DB) include a new section that was not included in the A141-2014 that allows the parties to limit the design-builder’s liability for liquidated damages resulting from the design-builder’s failure to achieve substantial completion of the project within the contract time. These changes reflect the increased involvement of owner and difference in the design-builder’s scope of work in Progressive DB projects.
The AIA has confirmed that additional resources relating to the differences among the design-build family of documents will be available later this year. This is in keeping with an ongoing diversification of project delivery methods across the construction industry. These new forms provide useful updates to and alternatives within the design-build model to reflect the variety of ways design-build projects are actually implemented. The A141-2014 contract form is scheduled to be retired in 2026.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.