Posted on Dec 17, 2007
John M Grau
Occasionally I ask fellow NECA staff to tell the members what they have been working on. Dan Walter, NECA VP/COO recently submitted the following post on contract documents.
By: Dan Walter
Except for very small projects, the relationship between an electrical contractor and its customer (either owner or general contractor) is usually formalized by a contract. Such contracts detail the work to be performed, the amount the customer will pay for that work, all the requirements for communicating with the project’s stakeholders, and what will happen should either party to the contract not live up to their obligations.
Contract law is governed by state law, not federal law. Like many legal issues, contract documents’ language has evolved over many years. It is based on the experiences of owners and contractors and the decisions made by the state courts that hear contract cases. Many organizations have developed model documents as “best practice” guides, and for the purpose of making good documents available for any construction project in a cost-efficient manner.
More than 115 years ago, the American Institute of Architects (AIA) began offering model documents. AIA revises its construction contract documents every 10 years. The reason for the long time between revision cycles is to allow construction contractors, construction users and the legal community time to become familiar with the documents and to get feedback, often from legal decisions, from their use. NECA has been an active participant in this revision process for more than 30 years. The AIA contract documents available today are good, solid documents that contain fair terms and conditions for subcontractors. The AIA A401-2007 Standard Form of Agreement between Contractor and Subcontractor is the document most electrical contractors might be offered when performing work as a subcontractor.
Recently, a new coalition began offering model construction contracts. ConsensusDOCS as the group and their documents have come to be known, is a collection of 20 trade associations representing owners, contractors, subcontractors, designers and sureties. NECA is a participant here, too. ConsensusDOCS includes more than 70 documents and forms, and ConsensusDOCS 750, Contractor-Subcontractor Agreement, is the form most likely to be seen by electrical contractors.
So why have two families of contract documents? For one, construction delivery methods keep changing. Design-Bid-Build, Design-Build, and variations of those methods require different contracts to reflect the different relationships among the stakeholders on the project. For another, the language of each set of construction documents reflects the perspective of its developers. Electrical contractors must be prepared to deal with contracts whether they are based on nationally developed models or locally drafted.
Our industry is constantly in motion, and contract documents evolve along with it. As Building Information Modeling (BIM) and other collaborative techniques are adopted in construction, contract documents will likely continue to evolve to address issues that arise. And NECA will continue to represent the interests of electrical contractors as these forms are developed.