Contracts Can Make or Break a Project ConsensusDocs Can Help

Does Your Contract Facilitate Project Success? “It is ironic that the one industry in the country, which more than all others depends upon coordination, cooperation and teamwork among multiple participants should be the country’s most adversarial industry.” - Construction Industry Institute (CII)

Why Contracts Matter to Project Results Canadian Study: 8 bad clauses can increase price by 20% Construction Industry Institute (CII) Study: −Unnecessary risk contingencies −Best Owners seek best Contractors and vice versa −Worst contracts get worst results

What are the most important provisions in a contract? Parties’ Information Description of Work/Services Indemnification Warranties Dispute Mitigation/Resolution Answer: All of the above and more – depends on whether you encounter an issue

Proper Risk Allocation is Key The party in the best position to manage the risk should have the responsibility to do so.

“…the definition of INSANITY is doing the same thing, over and over again, and expecting different results.” Einstein’s Rule…

Why Consensus is Needed Perception of Bias - Favors interests of drafter Better Project Results = Future Business Lack of Agreement on Basic Terms - Modifications exceed the original “standard” Unfair Risk Allocation - Parties try to push risk away (usually downstream) rather than manage Industry Trending Towards Collaboration - Win/Win versus Win/Lose

Contracts Negotiation Strategy Contracts should memorialize a business relationship (not a declaration of war) A contract should clearly express the parties’ intentions – obligations, rights and responsibilities Project success is a win for all An unsuccessful project is usually a failure for all

Can you afford to continuing working with outdated, one-sided contracts?

Proven Results for State of Iowa Iowa DAS using AIA v. ConsensusDocs Using AIAUsing CDs 68 project/year98 projects/year $40M/ year$80M/year Claim(s) on EVERY PROJECT NO formal claims on $400+M in construction

The ConsensusDocs Coalition 40+ Leading Design and Construction Industry Associations

Equal Votes for All Coalition Members Consensus Process Align Owner Interests with the Project Team Balanced Risk Allocation Industry Best Practices and Trends View the ConsensusDocs Procedures at Contract Drafting Principles

Best Practices + Fair Risk Allocation = Better Projects Reduce Costs, Contingencies, Inefficiencies Communication and Collaboration Empower Owners Avoid Legalese, whenever possible Change from Zero-Sum to Win-Win Fair Contracts Save You Time and Money!

42 coalition members = 110% increase More Design Professional input −CSI, EJCDC, AIA (insurance), DBIA Double digit growth despite down economy 100+ standard contracts & administrative forms Industry firsts: IPD, BIM, Federal Subcontract, Green, Federal Design-Build, Subsubcontract, Commissioning What’s Up Docs?

749 - Constructor & Hazardous Materials Testing Laboratory Owner & Trade Contractor Agreement (CM is Owner’s Agent) 840 – Owner & Design Professional CM Agency (Owner Hires or Acts as Own CM) – to be released in July 2015 New in 2015 (so far)

100+ Contracts 200 Series – General Contracting 300 Series – Collaborative 400 Series – Design-Build 500 Series – Construction Management 700 Series – Subcontracting 800 Series – Program Management

Agreement Structure ConsensusDocs AIA One integrated document includes both the general conditions and agreement Written in precise and understandable language A201 is a separate general conditions document - can cause confusion and conflicts Same general conditions used for D-B-B, D-B and CM/GC

Scope of the Work and Order of Precedence Provides order for interpreting conflicting documents Change Orders = highest precedence Avoids litigation costs Golden Rule: He who has the gold, makes the rules. Makes Constructors mind-readers by have to intuit “intended results” ConsensusDocsAIA

Communications A/E is not a default funnel for all communications – avoid communication silos Transmitting contract documents in electronic form – Electronic Communications Protocol

Retainage ConsensusDocs Once the entire work is 50% complete, Owner may not withhold additional retainage and shall pay Contractor the full amount of what is due on account of progress payments ( ) Owner may release retainage for work of early finishing trades and subcontractors upon Owner’s acceptance of their work ( ) AIA Even upon substantial completion of the entire work of the project, Owner may limit release of retainage to designated portions of work that are substantially complete(9.8.5) Result: Owner may withhold retainage as to early work that has been accepted, e.g., early finishing trades and subcontractor work, until substantial completion of the entire work of the project

Dispute mitigation and resolution before escalation Direct communication to avoid claims and build positive working relationships Optional Project Neutral or Dispute Review Board (DRB) Parties decide - Arbitrate or Litigate −Current AAA rules for arbitration −Non-prevailing party pays, including legal fees Dispute Mitigation and Resolution

Collaboration Technology Platform

24/7 Access MS Word ® Editing Free Collaboration Version Control Redlined against standard Create Favorites User Notes Convert & Compare

Highlights potential issues and innovative clauses Associations’ comments provide issue-spotting, specific language modifications and perspectives ConsensusDocs Guidebook Free download at

Other “Free” Resources Articles Podcasts, Webinars & Audio Recordings Educational Use Copyright Licenses Content Counsel (NOT Legal Advice) Training Videos & Webinars User’s Guide & Quick Start Guide Legal Comparisons Testimonials &Project Histories

Coalition Member Organizations Receive 20% Discount on All Packages at

Simply put… ConsensusDocs Help YOU Build A Better Way!

ConsensusDocs Support Team DOCS (3627)