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ConstructionPro Week, Volume: Construction Advisor Today - Issue: 99 - 03/18/2011

Can Architects Be Neutral Arbiters Under the AIA Contract Documents?

The contract documents published by the American Institute of Architects are probably the most widely used private construction contract forms in this country. They assign a unique role to the project architect. Although retained by the project owner, the architect serves as the neutral arbiter of contractor compliance with the requirements of the contract.

The architect’s approval, or certification, is required for many significant events: progress payments to the contractor; release of retainage to the contractor; acceptance of the contractor’s work. But it is not just the contractor that is dependent on architect certification. It can also be a prerequisite to the project owner’s exercise of its contractual rights.

The owner’s dependence on architect certification is not illusory. In a recent Indiana case, a project owner terminated a contractor for default. The owner neglected, however, to obtain certification from the architect that sufficient cause existed to justify termination. Without the architect’s certification, the owner could not hold the contractor responsible for breach of contract.

What has your experience been with the role of the project architect under the AIA contract documents? Are most arbitrators professional and objective in their role as neutral arbiter of contract compliance? Or is there an inherent bias toward the project owner who has retained them? I invite your comments.

Featured in Next Week’s Construction Claims Advisor:

  • Short Listing Procedure Slapped by Pennsylvania High Court
  • Court Addresses AIA Construction Manager Agreement
  • Limited Liability Company Substituted for Sole Proprietor

 

Comments

The character of the Architect is the here. If the Architect is truely neutral, he or she will assess the issues at hand, independently of whom is paying the bills and make their own decision, after all that is what the contract dictates.

Integrity is the Architect's most valuable asset and they should protect it like it is gold.

 

Experience is as varied as architects themselves. To some degree their behavior mirrors our handling of them. Direct professional prompt communication documented and timely limits the monkey business. Beyond that I'd say there is a tilt toward the hand that feeds them, but in my experience, taken as a whole they try to do good.

 

In my practice, I try to base all my decisions on the content of the Contract Documents, to solidify my position and protect myself from unsustaciated desitions. there are ocassions in which an "interpretation o extrapolation" of the writing on the CD's, then I try to look at the situation from the "intent" of the CD's, and disclose as such in my opinion. Then there are situations where my opinion is based on "what feels wright". those are the more arguable, but I still interpret them dettached from the Hand that feeds me". Industry needs and will recognize vertical people for what they stand for. At least that has been my belief and my values.

 

One clarification I'd like to make is that the 2007 revision to AIA document A-201 introduced the title of Initial Decision Maker, which only defaults to the Architect if the Owner and Contractor choose not to name another person or entity to the role. It's a seemingly minor revision, but a good one in my (unbiased) opinion as an architect.

 

Of course the architect cannot be truly neutral. he is retained by and has a fiduciary responsibility to the owner.
This is the very definition of a conflict of interest when the interest is dispute resolution between owner and contractor.
The change to A-201 mentioned above is only an improvement if it is undertaken. If it is not, the contractor is likely exposed to a stacked deck.

 

I disagree; the role of the architect is to protect the design & owner while treating the contractor fairly. The owner has already approved the design, so the architect isn't protecting the hand that feeds it. The contractor wants to build; but there may be misinterpretations, mistakes, unforseen conditions or just disagreements about methods. If in the end the owner gets what was promised (not that they are happy) and the builder is fairly compensated, the architect did their job. Many jobs have been run by the contractor, not the architect, and the building turns out different than designed for cost savings or techniques. There will always be good builders and bad architects to counter any argument, but the majority of both fields are competant, so the architect is protecting the design, not leaning toward the owner or against the builder.

 

If the architect's scope of work involves continuing continuing supervision or oversight, then the hand continues to feed him. he dare not bite it.
I am not suggesting that the contractor run the job, we are all well aware of the consequences that can bring. Neutral third party disupte resolution is the only fair approach. 
All parties can participate in the process equally and the neutral can render a decision.
To believe a paid functionary can be impartial is counter to all social research.

 

I do not have much experience with AIA conditions, but I have worked with other standard conditions of contract such as FIDIC and NEC3. I am of the opinion that a Neutral, Independent "Architect" is to the Benefit of the Project and consequently to the Benefit of the owner. A neutral Arbiter will help to maintain the good relations between the Contractor and the Owner which is critical for success of the project.

 

The owner thinks the contractor makes too much money, and doesnt trust his opinion, the owner thinks what the architect says is gospel, especially when it comes to change orders. Which many times if the Architect had done his job right the first time it would eliminate many change orders. The architect will always favor the owner and thinks the contractor doesnt know as much as him. The problem with contract language is alot of it does not apply to real world "getting the job done". And the language lets the architect be a weather man "i did all this work and got paid lots of money, BUT its the contractors responsibility to check all my work and if i'm wrong its still your fault" The architects should have LESS power in dealings between the owner and contractor, it should not be his business what money changes hands between 2 parties. Many times they are so far removed from real world prices its crazy "why does this cost such and such it only really costs such and such?" "oh well did you see gas costs $4 a gallon now, and everyone has raised prices,and put fuel surcharges on things?"

 

In my experience it depends entirely on the integrity of the architect. I have worked with architects that are very fair and don't expect the contractor to work for free to cover their mistakes or oversights. I have also worked with architects that never made a mistake. One for instance, the architect failed to show a transformer two feeders and a panel that it turned out were required for the job although this was far from obvious at bid time. He wanted us to furnish as part of the contract because in his words, "the intent of the drawings is clear". It was far from clear. Even if I had realized it was required should I have sized this equipment? As it was I did not realize it was necessary to the project until we were well into construction. Not all architects are fair.

 

Certainly, there are many opportunities for the opinion of the architect to seem arbitrary or unfair during the construction phase. But in the example given, where an architect's opinion is a pre-requisite to determining default on the part of the contractor, the stakes are especially high for everyone. This prerequisite is in there to protect the owner, primarily. The architect is hired to provide the expertise to make decisions of this specialized nature in regard to contract documents he prepared and sealed. Unbiased or not, the architect has a serious burden of responsibility in making decisions of this nature which could break a contractor or condemn an owner to a failed project outcome. The architect should realize that his decision must be made on solid ground because often he will have to justify further if there is subsequent legal action.

 

AIA contracts are excellent guidelines. Any clause or item can be negotiated to an extent that is probably acceptable. As a profession, the architects should be neutral, and fair in the process. And they can be, even with negotiated terms.

 

I am a General Contractor, and the thing I notice about Architects where I'm from is that if the dispute clearly favors the Owner, then they will abide by the AIA contract and quickly render a decision in favor of the Owner. However if the dispute is clearly in favor of the Contractor, they will flat-out refuse to make a decision and cite a conflict of interest. This position usually ends up costing BOTH the Owner and Contractor thousands of dollars to hire a third party arbitrator.

 

Third party arbitrators just don't work. Someone is paying them; and rarely is it 'equal'. If one is used, the Contractor says 'take it from my fees', which means the owner is basically paying the arbitrator.
As for the process, the arbitrator doesn't care who is right; only that the issue is resolved. So what happens is the Contractor says he is owned $100,000; the owner thinks (based upon his architect's advice) that it should have been included in the bid. So the arbitrator suggests each party (Architect, Owner and Contractor) pay $30,000 and call it even. The contractor wins; he didn't have to pay the $70,000, the owner doesn't care because it comes from his construction loan and the architect loses all of his fees from the job. Arbitration is problem resolution without having to know the issues or figure out who is right. That just doesn't work, because if you are in the wrong (it happens to all of us), you know you will come out ahead at the expense of the others, and if you are right it doesn't matter you still will be slightly wrong because you have to share the penalty / costs.

 

 

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