Contracting with Consultants: Part 6, Project Processes
Invoicing the architect’s client can present headaches if the architect is not keenly aware of potential problems. When the architect creates a schedule, or plan, for invoicing, the architect must think about how and when each consultant will perform and invoice for services, and how the timing of those invoices will fit with the timing of the architect’s services and invoices. For example, if the architect has included structural engineering services under its contract, the architect needs to consider the timing of the structural engineer’s services and invoices. The timing and duration of the structural engineer’s design and construction phase services may be quite different from those of the architect, which will mean that when the architect invoices for only 20% of its design services, for example, the structural engineer may be invoicing the architect for 80% of its design services. Similarly, during the construction phase, the structural engineer may complete its construction phase services at the same time the architect has completed only 20% of its construction phase services. Therefore, the architect should avoid contract terms that will not accommodate such differences in timing of completion of services and invoicing between the architect and its consultants.
During the construction phase, the architect may be required to review and certify pay applications of the contractor. Those pay applications will certainly include elements of construction designed by consultants of the architect such as structural and mechanical elements. The architect needs to be aware of how state licensing laws for architects and professional engineers may impact the process by which the architect reviews and certifies the pay applications. Most, if not all, states define the practice of engineering to include making observations of construction and certifying contractor pay applications related to parts of a project for which a professional engineer was required to provide the design. Therefore, the architect must include such services in contracts with its consultants and require the consultants to provide a certification to the architect upon which the architect may rely when the architect certifies the contractor’s pay applications. This will require the architect to make sure that contracts with consultants include construction phase services for all construction durations that include installations of elements designed by its consultants.
What can or should the architect do if a consultant is not satisfactorily performing its contracted responsibilities? The place and time to start thinking about this possibility is with contract terms for the consultant’s contract. Looking at AIA Document C401™–2017 Standard Form of Agreement Between Architect and Consultant, Article 9, the architect can find answers. Generally, the architect may suspend or terminate the consultant’s services pursuant to the same terms and conditions set forth in the architect’s contract with its client. Typically, that contract will include terms that will allow the owner to terminate the architect’s services for cause, i.e., persistent failure to perform. AIA Document B101™–2017 Standard Form of Agreement Between Owner and Architect provides the following in Section 9.4: “Either party may terminate this Agreement upon not less than seven days’ written notice should the other party fail substantially to perform in accordance with the terms of this Agreement through no fault of the party initiating the termination.” Regardless of the form used for the owner-architect agreement, the architect should be prepared through contract language to have the ability to terminate a consultant for the consultant’s failure to perform.
AIA has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors. The AIA’s Risk Management Program posts new materials and resources periodically.
Read our full seven-part series on Contracting with Consultants >
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