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An association
of construction owner executives, who represent Dupont Co.,
Intel Corp., Home Depot and other major corporations, will
soon publish a standard form of agreement for owners and general
contractors that it says remedies inequities in documents
published by the American Institute of Architects.
The document, now in final draft,
was written by attorneys who belong to the Associated Owners
and Developers, Atlanta. Ira Genberg, the attorney who headed
the project, says AOD's draft document combines in a single
form the same provisions covered by AIA's standard form for
contractors and owners and its standard form for general conditions.
To emphasize the flexibility in its approach, AOD incorporates
different options into one document.

Standard contract
documents sold by AIA dominate the market. Since no project
is built without the owner, Genberg says it makes sense that
the owner's vision should be reflected in the agreement. "The
architect has an extremely important role," he says.
"But if the agreement is between owner and contractor,
and the architect is not a party, it is much less clear that
the architect should have a role in drafting it."
It is also unclear how many owners
will use the new document. Another Atlanta-based owners' association,
the Construction Owners Association of America, created its
own standard forms of agreement two years ago. Some of its
350 members use the forms, and another 400 to 500 copies have
been sold, says a spokeswoman. By contrast, AIA sells thousands
of forms annually and its forms are used widely.
One of the AOD document's key
provisions is the option to waive consequential damages, such
as lost profit when a building is not ready in time. Under
both AIA and Associated General Contractors standard forms
of agreement, consequential damages are mutually waived. "On
the surface, this seems fair," says Genberg, but in reality
most of the damages an owner seeks are consequential ones
such as loss of use, rental expense and lost profit, he adds.
"The owner loses a lot," Genberg notes.
Another important AOD provision
prevents architects who are terminated on a project from walking
away with the plans. Under the 1997 revision to AIA Standard
Form B141, an owner loses the right to use any plan if the
architect is terminated for any reason, including the architect's
own default. To AOD, that provision promotes the architect's
interest above the project's.
To remedy that perceived deficiency,
AOD's draft document grants the owner a limited, irrevocable
license. If the owner defaults, the AOD form allows architects
to seek damages and perfect lien rights to recoup losses.
Another provision of the AOD document
contrasts with an AGC document that makes the owner responsible
for paying a contractor's costs if a force majeure event occurssuch
as adverse unusual weather. AOD absolves the owner of any
cost and only requires that the contractor be given more time.
After a quick review of AOD's
new document, Mark McCallum, AGC's senior counsel and associate
executive director for staff services, termed it an improvement
over what he describes as COAA's heavily biased documents.
But he still finds the AOD document unbalanced. "Wise
contractors won't get involved if they see this or will put
in contingencies" for the risks, says McCallum. Adds
Genberg: "If AGC liked it, I would be worried."
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