When creating the contract for a large construction project, having a firm grasp of the American Institute of Architects (AIA) Document A201-2017, General Conditions of the Contract for Construction (A201) is essential. This “umbrella” document lays out the rights and responsibilities of all parties, and its conditions also inform the owner/contractor, owner/architect and contractor/subcontractor agreements. The latest version of the A201 includes two notable updates that may require contractors to change their practices.
A201 Article 7: Changes in the Work
As noted in The American Bar Association’s The 2017 A201 Deskbook, A201 Article 7: Changes in the Work covers three mechanisms (change order, construction change directive and minor changes) that an owner or architect can use to direct a contractor to make changes in the work, “provided the changes are the same general type of work as the original contract.” It also provides the contractor the ability to “protect its right to get fairly compensated through additional time or additional money, or both.”
Other than minor grammatical and substantive changes throughout Article 7, there are two notable updates to the 2017 version of A201 which may require contractors to change their practices.
Sections 7.3.5 (new) and 9.1.2 (previously Section 7.3.4)
Section 7.3.5 is new, and states:
- If the Contractor disagrees with the adjustment to the Contract Time [(under a construction change directive)], the Contractor may make a Claim in accordance with…Article 15.
This addition clarifies how time claims under a construction change directive should be resolved.
A201-Version 2007’s Section 7.3.4 has now been moved to Section 9.1.2, which states:
- If unit prices are stated in the Contract Documents or subsequently agreed upon, and if quantities originally contemplated are materially changed so that application of such unit prices to the actual quantities causes substantial inequity to the Owner or Contractor, the applicable unit prices shall be equitably adjusted.
This section’s move from Article 7 may be considered significant because the old Section 7.3.4 applied only to “an Owner-directed change scenario,” whereas Section 9.1.2 falls in Article 9: Payments and Completion. As noted in The National Law Review, this move suggests “that the circumstances in which an equitable adjustment will be required under the new document may be far more expansive than simply those brought about by Owner-directed changes.”
The most significant update to Article 7 can be found in Section 7.4: Minor Changes in the Work, which reads:
- The Architect may order minor changes in the Work that are consistent with the intent of the Contract Documents and do not involve an adjustment in the Contract Sum or an extension of the Contract Time. The Architect’s order for minor changes shall be in writing. If the Contractor believes that the proposed minor change in the Work will affect the Contract Sum or Contract Time, the Contractor shall notify the Architect and shall not proceed to implement the change in the Work. If the Contractor performs the Work set forth in the Architect’s order for a minor change without prior notice to the Architect that such change will affect the Contract Sum or Contract Time, the Contractor waives any adjustment to the Contract Sum or extension of the Contract Time.
While Section 7.4 did exist in A201-Version 2007 — and gave the architect the authority to order minor changes in the work when done so in writing — the 2007 language excluded the requirements for the contractor to notify the architect and to not proceed with the change if it anticipates a resulting change in contract sum or time. The language waiving any adjustments in contract sum and time for the contractor if it neglects to meet these requirements is also new for 2017.
In summary, if you’re a contractor performing under A201, when it comes to Article 7, be sure to:
- make a claim in accordance with Article 15 if you disagree with the adjustment to the contract time under a construction change directive.
- notify the architect and do not proceed with a minor change in the work directed by the architect if you believe such change may affect the contract sum or time.
For more on this topic, or for additional citations, see Chapter 4: Contract Changes and Extras in Bruner & O'Connor On Construction Law or visit OnConstructionLaw.com.