Article Date: 02/21/2014

New Owner-Construction Manager Standard Agreement Expected to Provide Greater Clarity

By Steve Rizer


Standard construction management agency contracts have been maligned for not doing an adequate job of defining which costs fall into a particular bucket, leading to confusion when it comes time for payment. If a new standard construction management agreement from the ConsensusDocs coalition lives up to its hype, there could be significantly less confusion of this sort in the near future.


Melissa Beutler, vice-chairperson of the ConsensusDocs Drafting Council, believes that the group’s new 830 Agreement Between Owner and Construction Manager (CM Provides General Conditions) represents “the first standard agency document that provides clarity, which will be a helpful contractual tool for owners and CMs alike.” The ConsensusDocs 830 Agreement and related exhibits will replace the current 801 Construction Management Agreement.


The new agreement was revised based on industry feedback and the Drafting Council’s conclusion that providing greater clarity in defining costs, fees, and profit would avoid potential claims over these issues on projects using CM Agency. After surveying current practices, the council found that the areas of defining fees, profit, and overhead on general conditions items vary greatly. Consequently, the agreement structure was refined, and an optional general conditions exhibit was planned.


In an interview with ConstructionPro Week (CPW), ConsensusDocs Executive Director Brian Perlberg reported that by March 15, his coalition of 40 design and construction industry associations will publish another version of the CM agency document -- ConsensusDocs 831 -- which assumes that the CM is not providing general conditions items. In addition, “in the near future, we will be publishing a laboratory testing document, a geotechnical agreement, and a consultant agreement.”


The ConstructionPro Network member version of this article contains a complete transcript of CPW’s interview with Perlberg and provides details about a new online contract document service that another association recently made available.



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