AIA B141: Part 1 -- The Good

By David A. Ericksen, Esq. and Michael Strogoff, AIA

David A. Ericksen is a principal in the law firm of Severson & Werson. He can be reached at Severson & Werson’s San Francisco, California, office at 415.677.5637 or at dae@severson.com.

Michael Strogoff, AIA, is a fulltime negotiation consultant who specializes in training and assisting architects in negotiating better fees and agreements with their clients. He can be reached in Mill Valley, California at 415.383.7011 or at aemanage@aol.com.

Last year, the AIA completed its overhaul of the two most widely used owner-architect agreements, A201 (General Conditions) and B141 (Architect’s Services). These new agreements have been characterized as radical breaks from prior versions. They close some liability holes and clarify previous legal ambiguities, provide for greater flexibility, and require more forethought and communication. But the new AIA documents, particularly B141-1997, do much more than that. B141 has finally evolved to a point where architects can use it to create business and marketing opportunities.

The AIA’s guiding principles in developing B141-1997 included:

• Allowing architects to provide an expanded range of services over the life of the project
• More closely linking fee negotiations and the services to be provided
  Providing clear descriptions of services
• Incorporating a positive, comprehensive, inclusive, proactive and educational tone
• Demonstrating the value-added nature of the architect’s services
• Clarifying the owner’s role, responsibilities and obligations
• Emphasizing conflict avoidance and easier resolution
• Providing more flexibility in compensation and project-delivery methods
• Describing known project assumptions in detail (i.e., scope, budget, site, and schedule)
• Providing a means of managing costs throughout a project
• Maintaining familiarity and preserving links to other AIA documents such as A201.

Although the revised agreement achieves these goals and paves the way to greater profitability, it is still a contract. As such, it also focuses on allocating risk. Accordingly, this article examines how the most significant changes to B141 create both new business opportunities and affect how architects manage risk. We have grouped these changes under the headings of The Good, The Bad and The Dangerous. In Part I of this article, we will focus on some of the good changes:

Modular Format

The most sweeping change is in the overall structure. B141-1997’s flexible kit-of-parts currently includes two interrelated sections. The first (Part One - Standard Form of Agreement) identifies project parameters, participants, and overall responsibilities and terms that affect all parties. The second part (Part Two - Standard Form of Architect’s Services) focuses specifically on the architect’s scope of services for a particular project. By separating the overall terms and conditions (Part One) from the architect’s scope of services (Part Two), the architect can first discuss how the parties will work together, then focus a distinct part of the negotiations on how the architect’s role and services can most benefit the owner. An optional, supplemental scope of services and other reference documents (Part Three) can be used to further expand or elaborate on the architect’s role.

Exchange of Initial Information

A properly prepared contract is supposed to reflect a "meeting of minds" between the parties. All too often this does not happen. Instead, parties begin a project with markedly different understandings and expectations. These misunderstandings are the root of many, if not most, construction-related lawsuits.

Section 1.1 seeks to minimize or prevent these frequent misunderstandings by forcing the parties to consider, discuss, and commit to many of the fundamental parameters that establish the framework of the project. The owner and architect must complete 16 separate blanks relative to the project. The section requires the parties to specifically discuss a wide range of issues (i.e., physical, legal, scheduling and financial parameters, project objectives, program requirements, delivery methods, participants and designated representatives, etc.). By forcing an active discussion, fewer unspoken assumptions are made and the entire agreement can be built around articulated parameters and objectives.

While some of this information covered by section 1.1 is almost always discussed at the outset, seldom is all of it discussed, much less reduced to a writing that is binding between the parties. If the new B141 is successful in forcing owners and architects to address these issues in advance and reach consensus, this single article can eliminate more claims than any other section of the agreement. Where disputes do arise, this information will provide a clear record of the parties’ initial understanding.

Section 1.1 provides three other significant opportunities for communications. First, owners and architects can use this section to discuss what is not known about the project. They can then decide who is responsible for determining how the unknowns will be addressed (e.g., if the site might contain hazardous materials, how will this be ascertained, who is responsible for finding this out, and when and how will possible mitigation measures be decided). Next, the discussion required by section 1.1 can be used as a segue to discuss each party’s fears and expectations. By discussing major concerns at this point, most anxieties can either be put to rest, or at least addressed, and the spirit of cooperation can be broadened. Finally, because B141-1997 requires that project objectives and parameters be specified, architects have a platform to convey how their range of expertise can help the owner achieve any or all of his goals. By contrast, the 1987 version required only a brief project description, leaving undecided how some crucial objectives would be met and by whom.

Flexible Sets of Service

Part Two of the agreement provides a series of optional forms, each devoted to a different architectural project role. The AIA has published the first version of Part Two, which covers services traditionally offered by architects. Other versions being developed cover distinct types of services, such as limited design services, construction phase services without design, and interior design services. As more parties adopt the new B141 format, some owners and architects may develop a version of Part Two uniquely tailored to their own practice and locale. The real strength of B141-1997 will come after these alternate Scopes of Service are developed. Owners and architects will then be able to choose service packages that most closely resemble specific project requirements and delivery methods while maintaining the same core contractual framework as in Part One.

Firms looking to expand upon or develop their own scope of work descriptions may use the current version of Part Two as a checklist, along with related AIA documents such as B163 — Designated Services, their own lists of services, and RFPs and other documents used by their clients. Larger firms should consider different versions for each major building type and project-delivery method.

Expanded Services

Among the AIA’s greatest hopes for the new B141 is that it will open the door to expanded scopes of services for architects and thereby more project influence and greater revenues and profits for its members. With the 1987 edition, the tendency was for owners to shift as much responsibility to the design team and contractor as possible and for architects to protect themselves by limiting their scope of services. By contrast, the 1997 edition encourages parties to decide who is in the best position to assume various responsibilities. Frequently, this will be the architect.

Section 2.8.3 is one of the most useful provisions for expanding services. It lists 22 separate categories of services beyond the basic design and construction administration, ranging from programming to detailed cost estimating to tenant-related services. The matrix of possible services prompts the owner and architect to discuss the owner’s broader needs as well as the architect’s capacity and willingness to provide the myriad administrative and technical tasks required.

Architects can expand this matrix to include their full range of capabilities from project definition to facility move-in and management. Parties could designate 1) who — architect, owner, or not provided — is responsible for these services, and 2) where in the agreement that service is described. This not only broadens the architect’s thinking, it also shows owners how architects can help navigate the labyrinth of project tasks and decisions. A collateral benefit of completing the process is that if disputes arise, there will be little question as to the responsibility for specific categories of service. B141-1997’s flexible kit-of-parts format makes it easy to use alternative or supplemental documents to further expand or define the architect’s role.

Section 2.2 can also be used to expand architects’ roles. This section specifies the Owner’s responsibilities, such as furnishing program and equipment requirements, and providing land surveys. View this only as a starting point. Many of these services could be provided by the architect as an expanded service and so designated in section 2.8.3.

Change In Services

Gone are the owner-dreaded words "Additional Services." The three categories in the old B141 (beyond basic service, contingent additional services, and optional additional services) did nothing but confuse and frustrate most owners and put architects in the difficult position of negotiating additional fees for these services later, as events warranted. B141-1997 greatly simplifies the categories of additional services by abandoning the three categories in favor of a reduced list of circumstances that will justify a change in services and/or compensation.

The presentation of these circumstances is broken into two parts. The first is a more positive set of "Change in Services" which is introduced in section 1.3.3. This includes seven circumstances that mostly relate to code revisions or circumstances within the owner’s control. Theoretically, these circumstances relate to all projects, regardless of the specific architectural services being provided. The most important of the new categories provides that any change in the information presented in Article 1 will justify a change in services. Accordingly, careful and thoughtful completion of the initial information called for by Article 1 takes on added importance.

The second list of circumstances is set forth in section 2.8 and deals primarily with issues arising out of services provided during construction. Services that were previously open-ended, such as the number of site visits, reviews of each shop drawing and similar submittals, and construction site inspections, are enumerated in section 2.8.1. Contractor caused work that previously plagued architects, such as review of out-of-sequence submittals and unnecessary RFIs, is now clearly specified as a Change in Service in section 2.8.2. This section is simpler and clearer than its predecessor; however, the location (fourteen pages away from the Change in Services clause, section 1.3.3) renders it somewhat confusing and prone to being easily overlooked.

While these two sections list specific scope changes and keep the door open for others by referring to circumstances beyond the architect’s control, architects should carefully review and expand these lists to reflect their practice and specific project. For example, revising drawings due to changes in interpretations by reviewing agencies is designated as a Change in Service. This provision would be improved if it contained an itemized list of the agencies known to have jurisdiction. If a project necessitates reviews by additional agencies, the discussion about what constitutes a Change in Service will be simplified.

Architects should also discuss why these conditions benefit the owner. For example, designating the review of unnecessary RFIs as a Change in Service benefits an owner by 1) allowing the architect to remove fee contingencies for this activity, 2) lessening the contractor’s ability to shift his responsibilities, and 3) keeping the contractor more accountable for constructing the building in accordance with the plans and specifications.