Project Contracting

The purpose of a contract is to detail the responsibilities of both the owner and contractor, including their rights and liabilities, throughout the execution of a project. A properly drawn contract, in which the scope of work and expectations of the owner and contractor are clearly defined, will minimize the risk to all parties of problems during project execution. The same is true between a contractor and its subcontractors.

In the case of traditional plan and specification contracting, it is usually necessary for an owner to contract with an architect and/or engineer to prepare the contract documents that will be the basis for a project. The same may be true with a design-build contractor that is acting as a prime contractor and seeking those services from an outside firm. The contract documents typically consist of three main components: the completed drawings, the construction specifications, and any other requirements or special conditions that illustrate contractual obligations of both parties. Other items identified include communication protocols, dispute resolution and payment methods.

There are many contracting methods available to an owner/host facility. Each method has its own advantages and disadvantages, all of which should be carefully considered prior to choosing one for a project. With many contracting methods, it is common to utilize prepared standard contracts for professional services that have been developed by the American Institute of Architects (AIA). These standard contracts have been developed and tested throughout the architecture, engineering, and construction industries and are common in versions appropriate for contracting with consulting firms for architectural or engineering services and versions for contractors and subcontractors. The AIA contracts also have developed requisitions for payment forms, which can simplify an owner's review of contractor invoices. With certain performance-based and other types of energy services contracting methods, non-standard customized contracts are commonly used.

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