May 3, 2016Client Alert

Construction Contracting: Battle of the Forms

Recently, we were asked about our experience with construction contract forms from the Design-Build Institute of America (DBIA) in higher education construction. The question was posed as to which construction industry form type may be best suited for higher education construction projects. While we have encountered the DBIA “family” of construction forms, we continue to find the overwhelming majority of construction projects use the American Institute of Architects (AIA) family of forms. In recent years, however, the use of either the Associated General Contractors or the Engineers Joint Contract Documents Committee families of contract forms appears to be on the rise and cutting into AIA’s share of the market. Overall, we find that each of the individual "form families" is developed by a particular segment within the construction industry and reflects the bias of its constituent segment.

No matter the form agreement suggested, we find that when representing an owner, such as a higher education institution, all of these forms need significant modifications through attachment of an addendum and/or internal changes to "level the playing field," caused by the institutional bias instilled by the trade association creating the form. To facilitate those changes, Michael Best has developed template addenda to be used and customized, depending on the particular circumstances of a client’s individual construction project and needs.

Key issues, particularly for higher education institutions, often revolve around: (i) additional protections to ensure projects are completed on time (i.e. before classes start); (ii) bonding and insurance requirements; (iii) more stringent indemnity and site cleanup protections (critical when construction sites are near areas frequented by students and staff); and (iv) ownership of drawings and design documents (as higher education institutions often plan on expanding, modifying or altering campus buildings in the near future).

As referenced above, in our experience with construction projects throughout the country, including higher education construction projects, we find the overwhelming majority of projects use the AIA family of forms. This does not mean the AIA forms are superior to any of the other form families, however, with dominance in the construction marketplace, AIA forms enjoy the highest level of familiarity and acceptance among the various industry participants. This typically limits the number of exchanged drafts before approval, thus decreasing investments of time and money.

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