Aia

Document A107 2007
TM
Standard Form of Agreement Between Owner and Contractor for a Project

of Limited Scope
AGREEMENT made as of the
in the year
(In words, indicate day, month and year)
BETWEEN the Owner:
(Name, legal status, address and other information)
day of
This document has important legal

consequences. Consultation with
an attorney is encouraged with
respect to its completion or
modification.
and the Contractor:

for the following Project:

(Name, location and detailed description)
The Architect:
The Owner and Contractor agree as follows.

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AIA Document A107 2007. Copyright 1936, 1951, 1958, 1961, 1963, 1966, 1970, 1974, 1978, 1987, 1997 and 2007 by The American Institute of
Architects. WARNING: This AIA Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum
extent possible under the law. Purchasers are permitted to reproduce ten (10) copies of this document when completed. To report copyright violations of
020310
AIA Contract Documents, e-mail The American Institute of Architects legal counsel, [email protected].
TABLE OF ARTICLES
1
THE WORK OF THIS CONTRACT
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
CONTRACT SUM
PAYMENT
DISPUTE RESOLUTION
ENUMERATION OF CONTRACT DOCUMENTS
GENERAL PROVISIONS
OWNER
CONTRACTOR
10
ARCHITECT
11
SUBCONTRACTORS
12
CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS
13
CHANGES IN THE WORK
14
TIME
15
PAYMENTS AND COMPLETION
16
PROTECTION OF PERSONS AND PROPERTY
17
INSURANCE & BONDS
18
CORRECTION OF WORK
19
MISCELLANEOUS PROVISIONS
20
TERMINATION OF THE CONTRACT
21
CLAIMS AND DISPUTES
ARTICLE 1 THE WORK OF THIS CONTRACT

The Contractor shall execute the Work described in the Contract Documents, except as specifically indicated in the
Contract Documents to be the responsibility of others.
ARTICLE 2 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
2.1 The date of commencement of the Work shall be the date of this Agreement unless a different date is stated below
or provision is made for the date to be fixed in a notice to proceed issued by the Owner.
(Insert the date of commencement, if it differs from the date of this Agreement or, if applicable, state that the date will
be fixed in a notice to proceed.)
2.2 The Contract Time shall be measured from the date of commencement.
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2.3 The Contractor shall achieve Substantial Completion of the entire Work not later than
(
) days from the date of commencement, or as follows:
(Insert number of calendar days. Alternatively, a calendar date may be used when coordinated with the date of
commencement. If appropriate, insert requirements for earlier Substantial Completion of certain portions of the Work.)
Portion of the Work
Substantial Completion Date
, subject to adjustments of this Contract Time as provided in the Contract Documents.

(Insert provisions, if any, for liquidated damages relating to failure to achieve Substantial Completion on time or for
bonus payments for early completion of the Work.)
ARTICLE 3 CONTRACT SUM

3.1 The Owner shall pay the Contractor the Contract Sum in current funds for the Contractors performance of the
Contract. The Contract Sum shall be one of the following:
(Check the appropriate box.)
Stipulated Sum, in accordance with Section 3.2 below
Cost of the Work plus the Contractors Fee, in accordance with Section 3.3 below
Cost of the Work plus the Contractors Fee with a Guaranteed Maximum Price, in accordance with
Section 3.4 below
(Based on the selection above, complete Section 3.2, 3.3 or 3.4 below.)
3.2 The Stipulated Sum shall be
Dollars
($
), subject to additions and deductions as provided in the Contract Documents.
3.2.1 The Stipulated Sum is based upon the following alternates, if any, which are described in the Contract
Documents and are hereby accepted by the Owner:
(State the numbers or other identification of accepted alternates. If the bidding or proposal documents permit the
Owner to accept other alternates subsequent to the execution of this Agreement, attach a schedule of such other
alternates showing the amount for each and the date when that amount expires.)
3.2.2 Unit prices, if any:

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(Identify and state the unit price, and state the quantity limitations, if any, to which the unit price will be applicable.)
Item
Units and Limitations
Price per Unit ($0.00)
3.2.3 Allowances included in the stipulated sum, if any:

(Identify allowance and state exclusions, if any, from the allowance price.)
Item
Allowance
3.3 COST OF THE WORK PLUS CONTRACTORS FEE

3.3.1 The Cost of the Work is as defined in Exhibit A, Determination of the Cost of the Work.
3.3.2 The Contractors Fee:
(State a lump sum, percentage of Cost of the Work or other provision for determining the Contractors Fee and the method
of adjustment to the Fee for changes in the Work.)
3.4 COST OF THE WORK PLUS CONTRACTORS FEE WITH A GUARANTEED MAXIMUM PRICE
3.4.1 The Cost of the Work is as defined in Exhibit A, Determination of the Cost of the Work.
3.4.2 The Contractors Fee:
(State a lump sum, percentage of Cost of the Work or other provision for determining the Contractors Fee and the method
of adjustment to the Fee for changes in the Work.)
3.4.3 GUARANTEED MAXIMUM PRICE

3.4.3.1 The sum of the Cost of the Work and the Contractors Fee is guaranteed by the Contractor not to exceed
Dollars ($
), subject to additions and
deductions by changes in the Work as provided in the Contract Documents. Such maximum sum is referred to in the
Contract Documents as the Guaranteed Maximum Price. Costs which would cause the Guaranteed Maximum Price to be
exceeded shall be paid by the Contractor without reimbursement by the Owner.
(Insert specific provisions if the Contractor is to participate in any savings.)
3.4.3.2 The Guaranteed Maximum Price is based on the following alternates, if any, which are described in the Contract
Documents and are hereby accepted by the Owner:
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3.4.3.3 Unit Prices, if any:

(Identify and state the unit price, and state the quantity limitations, if any, to which the unit price will be applicable.)
Item
Units and Limitations
Price per Unit ($0.00)
3.4.3.4 Allowances included in the Guaranteed Maximum Price, if any:

(Identify and state the amounts of any allowances, and state whether they include labor, materials, or both.)
Item
Allowance
3.4.3.5 Assumptions, if any, on which the Guaranteed Maximum Price is based:
ARTICLE 4 PAYMENTS
4.1 PROGRESS PAYMENTS
4.1.1 Based upon Applications for Payment submitted to the Architect by the Contractor and Certificates for Payment
issued by the Architect, the Owner shall make progress payments on account of the Contract Sum to the Contractor as
provided below and elsewhere in the Contract Documents.
4.1.2 The period covered by each Application for Payment shall be one calendar month ending on the last day of the
month, or as follows:
4.1.3 Provided that an Application for Payment is received by the Architect not later than the
day of a month, the Owner shall make payment of the certified amount to the Contractor not later than the
day of the
month. If an Application for Payment is received by the
Architect after the date fixed above, payment shall be made by the Owner not later than
(
) days after the Architect receives the Application for Payment.
(Federal, state or local laws may require payment within a certain period of time.)
4.1.4 Retainage, if any, shall be withheld as follows:
4.1.5 Payments due and unpaid under the Contract shall bear interest from the date payment is due at the rate stated
below, or in the absence thereof, at the legal rate prevailing from time to time at the place where the Project is located.
(Insert rate of interest agreed upon, if any.)
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4.2 FINAL PAYMENT

4.2.1 Final payment, constituting the entire unpaid balance of the Contract Sum, shall be made by the Owner to the
Contractor when
.1
the Contractor has fully performed the Contract except for the Contractors responsibility to correct
Work as provided in Section 18.2, and to satisfy other requirements, if any, which extend beyond final
payment;
.2
the contractor has submitted a final accounting for the Cost of the Work, where payment is on the basis
of the Cost of the Work with or without a guaranteed maximum price; and
.3
a final Certificate for Payment has been issued by the Architect.
4.2.2 The Owners final payment to the Contractor shall be made no later than 30 days after the issuance of the
Architects final Certificate for Payment, or as follows:
ARTICLE 5 DISPUTE RESOLUTION

5.1 BINDING DISPUTE RESOLUTION
For any claim subject to, but not resolved by, mediation pursuant to Section 21.3, the method of binding dispute
resolution shall be as follows:
(Check the appropriate box. If the Owner and Contractor do not select a method of binding dispute resolution below, or
do not subsequently agree in writing to a binding dispute resolution method other than litigation, claims will be
resolved in a court of competent jurisdiction.)
Arbitration pursuant to Section 21.4 of this Agreement
Litigation in a court of competent jurisdiction
Other (Specify)
ARTICLE 6 ENUMERATION OF CONTRACT DOCUMENTS

6.1 The Contract Documents are defined in Article 7 and, except for Modifications issued after execution of this
Agreement, are enumerated in the sections below.
6.1.1 The Agreement is this executed AIA Document A1072007, Standard Form of Agreement Between Owner and
Contractor for a Project of Limited Scope.
6.1.2 The Supplementary and other Conditions of the Contract:
Document
Title
Date
Pages
6.1.3 The Specifications:

(Either list the Specifications here or refer to an exhibit attached to this Agreement.)
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Section
Title
Date
Pages
6.1.4 The Drawings:

(Either list the Drawings here or refer to an exhibit attached to this Agreement.)
Number
Title
Date
Date
Pages
6.1.5 The Addenda, if any:

Number
Portions of Addenda relating to bidding requirements are not part of the Contract Documents unless the bidding
requirements are enumerated in this Article 6.
6.1.6 Additional documents, if any, forming part of the Contract Documents:
.1
Exhibit A, Determination of the Cost of the Work, if applicable.
.2
AIA Document E2012007, Digital Data Protocol Exhibit, if completed, or the following:
.3
Other documents:
(List here any additional documents that are intended to form part of the Contract Documents.)
ARTICLE 7 GENERAL PROVISIONS

7.1 THE CONTRACT DOCUMENTS
The Contract Documents are enumerated in Article 6 and consist of this Agreement (including, if applicable,
Supplementary and other Conditions of the Contract), Drawings, Specifications, Addenda issued prior to the execution
of this Agreement, other documents listed in this Agreement and Modifications issued after execution of this
Agreement. A Modification is (1) a written amendment to the Contract signed by both parties, (2) a Change Order, (3) a
Construction Change Directive or (4) a written order for a minor change in the Work issued by the Architect. The intent
of the Contract Documents is to include all items necessary for the proper execution and completion of the Work by the
Contractor. The Contract Documents are complementary, and what is required by one shall be as binding as if required
by all; performance by the Contractor shall be required to the extent consistent with the Contract Documents and
reasonably inferable from them as being necessary to produce the indicated results.
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7.2 THE CONTRACT

The Contract Documents form the Contract for Construction. The Contract represents the entire and integrated
agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or
oral. The Contract may be amended or modified only by a Modification. The Contract Documents shall not be
construed to create a contractual relationship of any kind between any persons or entities other than the Owner and the
Contractor.
7.3 THE WORK
The term Work means the construction and services required by the Contract Documents, whether completed or
partially completed, and includes all other labor, materials, equipment and services provided or to be provided by the
Contractor to fulfill the Contractors obligations. The Work may constitute the whole or a part of the Project.
7.4 INSTRUMENTS OF SERVICE
Instruments of Service are representations, in any medium of expression now known or later developed, of the tangible
and intangible creative work performed by the Architect and the Architects consultants under their respective
professional services agreements. Instruments of Service may include, without limitation, studies, surveys, models,
sketches, drawings, specifications, and other similar materials.
7.5 OWNERSHIP AND USE OF DRAWINGS, SPECIFICATIONS AND OTHER INSTRUMENTS OF SERVICE
7.5.1 The Architect and the Architects consultants shall be deemed the authors and owners of their respective
Instruments of Service, including the Drawings and Specifications, and will retain all common law, statutory and other
reserved rights, including copyrights. The Contractor, Subcontractors, Sub-subcontractors, and material or equipment
suppliers shall not own or claim a copyright in the Instruments of Service. Submittal or distribution to meet official
regulatory requirements or for other purposes in connection with this Project is not to be construed as publication in
derogation of the Architects or Architects consultants reserved rights.
7.5.2 The Contractor, Subcontractors, Sub-subcontractors and material or equipment suppliers are authorized to use
and reproduce the Instruments of Service provided to them solely and exclusively for execution of the Work. All copies
made under this authorization shall bear the copyright notice, if any, shown on the Instruments of Service. The
Contractor, Subcontractors, Sub-subcontractors, and material or equipment suppliers may not use the Instruments of
Service on other projects or for additions to this Project outside the scope of the Work without the specific written
consent of the Owner, Architect and the Architects consultants.
7.6 TRANSMISSION OF DATA IN DIGITAL FORM
If the parties intend to transmit Instruments of Service or any other information or documentation in digital form, they
shall endeavor to establish necessary protocols governing such transmission, unless otherwise provided in the
Agreement or in the Contract Documents.
ARTICLE 8 OWNER
8.1 INFORMATION AND SERVICES REQUIRED OF THE OWNER
8.1.1 The Owner shall furnish all necessary surveys and a legal description of the site.
8.1.2 The Contractor shall be entitled to rely on the accuracy of information furnished by the Owner but shall exercise
proper precautions relating to the safe performance of the Work.
8.1.3 Except for permits and fees that are the responsibility of the Contractor under the Contract Documents, including
those required under Section 9.6.1, the Owner shall secure and pay for other necessary approvals, easements,
assessments and charges required for the construction, use or occupancy of permanent structures or for permanent
changes in existing facilities.
8.2 OWNERS RIGHT TO STOP THE WORK
If the Contractor fails to correct Work which is not in accordance with the requirements of the Contract Documents, or
repeatedly fails to carry out the Work in accordance with the Contract Documents, the Owner may issue a written order
to the Contractor to stop the Work, or any portion thereof, until the cause for such order is eliminated; however, the
right of the Owner to stop the Work shall not give rise to a duty on the part of the Owner to exercise this right for the
benefit of the Contractor or any other person or entity.
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8.3 OWNERS RIGHT TO CARRY OUT THE WORK

If the Contractor defaults or neglects to carry out the Work in accordance with the Contract Documents, and fails within
a ten-day period after receipt of written notice from the Owner to commence and continue correction of such default or
neglect with diligence and promptness, the Owner, without prejudice to any other remedy the Owner may have, may
correct such deficiencies and may deduct the reasonable cost thereof, including Owners expenses and compensation for
the Architects services made necessary thereby, from the payment then or thereafter due the Contractor.
ARTICLE 9 CONTRACTOR
9.1 REVIEW OF CONTRACT DOCUMENTS AND FIELD CONDITIONS BY CONTRACTOR
9.1.1 Execution of the Contract by the Contractor is a representation that the Contractor has visited the site, become
generally familiar with local conditions under which the Work is to be performed and correlated personal observations
with requirements of the Contract Documents.
9.1.2 Because the Contract Documents are complementary, the Contractor shall, before starting each portion of the
Work, carefully study and compare the various Contract Documents relative to that portion of the Work, as well as the
information furnished by the Owner pursuant to Section 8.1.1, shall take field measurements of any existing conditions
related to that portion of the Work and shall observe any conditions at the site affecting it. These obligations are for the
purpose of facilitating coordination and construction by the Contractor and are not for the purpose of discovering errors,
omissions, or inconsistencies in the Contract Documents; however, the Contractor shall promptly report to the Architect
any errors, inconsistencies, or omissions discovered by or made known to the Contractor as a request for information in
such form as the Architect may require. It is recognized that the Contractors review is made in the Contractors
capacity as a contractor and not as a licensed design professional unless otherwise specifically provided in the Contract
Documents.
9.1.3 The Contractor is not required to ascertain that the Contract Documents are in accordance with applicable laws,
statutes, ordinances, codes, rules and regulations, or lawful orders of public authorities, but the Contractor shall
promptly report to the Architect any nonconformity discovered by or made known to the Contractor as a request for
information in such form as the Architect may require.
9.2 SUPERVISION AND CONSTRUCTION PROCEDURES
9.2.1 The Contractor shall supervise and direct the Work, using the Contractors best skill and attention. The
Contractor shall be solely responsible for and have control over construction means, methods, techniques, sequences
and procedures, and for coordinating all portions of the Work under the Contract, unless the Contract Documents give
other specific instructions concerning these matters.
9.2.2 The Contractor shall be responsible to the Owner for acts and omissions of the Contractors employees,
Subcontractors and their agents and employees, and other persons or entities performing portions of the Work for or on
behalf of the Contractor or any of its Subcontractors.
9.3 LABOR AND MATERIALS
9.3.1 Unless otherwise provided in the Contract Documents, the Contractor shall provide and pay for labor, materials,
equipment, tools, construction equipment and machinery, water, heat, utilities, transportation, and other facilities and
services necessary for proper execution and completion of the Work whether temporary or permanent and whether or
not incorporated or to be incorporated in the Work.
9.3.2 The Contractor shall enforce strict discipline and good order among the Contractors employees and other
persons carrying out the Work. The Contractor shall not permit employment of unfit persons or persons not skilled in
tasks assigned to them.
9.3.3 The Contractor may make a substitution only with the consent of the Owner, after evaluation by the Architect
and in accordance with a Modification.
9.4 WARRANTY
The Contractor warrants to the Owner and Architect that materials and equipment furnished under the Contract will be
of good quality and new unless the Contract Documents require or permit otherwise. The Contractor further warrants
that the Work will conform to the requirements of the Contract Documents and will be free from defects, except for
those inherent in the quality of the Work the Contract Documents require or permit. Work, materials, or equipment not
conforming to these requirements may be considered defective. The Contractors warranty excludes remedy for damage
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or defect caused by abuse, alterations to the Work not executed by the Contractor, improper or insufficient maintenance,
improper operation or normal wear and tear under normal usage.
9.5 TAXES
The Contractor shall pay sales, consumer, use and other similar taxes that are legally enacted when bids are received or
negotiations concluded, whether or not yet effective or merely scheduled to go into effect.
9.6 PERMITS, FEES, NOTICES, AND COMPLIANCE WITH LAWS
9.6.1 Unless otherwise provided in the Contract Documents, the Contractor shall secure and pay for the building
permit as well as other permits, fees, licenses and inspections by government agencies necessary for proper execution
and completion of the Work that are customarily secured after execution of the Contract and legally required at the time
bids are received or negotiations concluded.
9.6.2 The Contractor shall comply with and give notices required by applicable laws, statutes, ordinances, codes, rules
and regulations, and lawful orders of public authorities applicable to performance of the Work. If the Contractor
performs Work knowing it to be contrary to applicable laws, statutes, ordinances, codes, rules and regulations, or lawful
orders of public authorities, the Contractor shall assume appropriate responsibility for such Work and shall bear the
costs attributable to correction.
9.7 ALLOWANCES
The Contractor shall include in the Contract Sum all allowances stated in the Contract Documents. The Owner shall
select materials and equipment under allowances with reasonable promptness. Allowance amounts shall include the
costs to the Contractor of materials and equipment delivered at the site and all required taxes, less applicable trade
discounts. Allowance amounts shall not include the Contractors costs for unloading and handling at the site, labor,
installation, overhead, and profit.
9.8 CONTRACTORS CONSTRUCTION SCHEDULES
9.8.1 The Contractor, promptly after being awarded the Contract, shall prepare and submit for the Owners and
Architects information a Contractors construction schedule for the Work. The schedule shall not exceed time limits
current under the Contract Documents, shall be revised at appropriate intervals as required by the conditions of the
Work and Project, shall be related to the entire Project to the extent required by the Contract Documents, and shall
provide for expeditious and practicable execution of the Work.
9.8.2 The Contractor shall perform the Work in general accordance with the most recent schedule submitted to the
Owner and Architect.
9.9 SUBMITTALS
9.9.1 The Contractor shall review for compliance with the Contract Documents and submit to the Architect Shop
Drawings, Product Data, Samples and similar submittals required by the Contract Documents in coordination with the
Contractors construction schedule and in such sequence as to allow the Architect reasonable time for review. By
submitting Shop Drawings, Product Data, Samples and similar submittals, the Contractor represents to the Owner and
Architect that the Contractor has (1) reviewed and approved them; (2) determined and verified materials, field
measurements and field construction criteria related thereto, or will do so; and (3) checked and coordinated the
information contained within such submittals with the requirements of the Work and of the Contract Documents. The
Work shall be in accordance with approved submittals.
9.9.2 Shop Drawings, Product Data, Samples and similar submittals are not Contract Documents.
9.10 USE OF SITE
The Contractor shall confine operations at the site to areas permitted by applicable laws, statutes, ordinances, codes,
rules and regulations, lawful orders of public authorities, and the Contract Documents and shall not unreasonably
encumber the site with materials or equipment.
9.11 CUTTING AND PATCHING
The Contractor shall be responsible for cutting, fitting or patching required to complete the Work or to make its parts fit
together properly.
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9.12 CLEANING UP
The Contractor shall keep the premises and surrounding area free from accumulation of waste materials or rubbish
caused by operations under the Contract. At completion of the Work, the Contractor shall remove waste materials,
rubbish, the Contractors tools, construction equipment, machinery and surplus material from and about the Project.
9.13 ROYALTIES, PATENTS AND COPYRIGHTS
The Contractor shall pay all royalties and license fees. The Contractor shall defend suits or claims for infringement of
copyrights and patent rights and shall hold the Owner and Architect harmless from loss on account thereof, but shall not
be responsible for such defense or loss when a particular design, process or product of a particular manufacturer or
manufacturers is required by the Contract Documents or where the copyright violations are contained in Drawings,
Specifications or other documents prepared by the Owner or Architect. However, if the Contractor has reason to believe
that the required design, process or product is an infringement of a copyright or a patent, the Contractor shall be
responsible for such loss unless such information is promptly furnished to the Architect.
9.14 ACCESS TO WORK
The Contractor shall provide the Owner and Architect access to the Work in preparation and progress wherever located.
9.15 INDEMNIFICATION
9.15.1 To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless the Owner, Architect,
Architects consultants and agents and employees of any of them from and against claims, damages, losses and
expenses, including but not limited to attorneys fees, arising out of or resulting from performance of the Work,
provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury
to or destruction of tangible property (other than the Work itself), but only to the extent caused by the negligent acts or
omissions of the Contractor, a Subcontractor, anyone directly or indirectly employed by them or anyone for whose acts
they may be liable, regardless of whether or not such claim, damage, loss or expense is caused in part by a party
indemnified hereunder. Such obligation shall not be construed to negate, abridge, or reduce other rights or obligations of
indemnity which would otherwise exist as to a party or person described in this Section 9.15.1.
9.15.2 In claims against any person or entity indemnified under this Section 9.15 by an employee of the Contractor, a
Subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, the
indemnification obligation under Section 9.15.1 shall not be limited by a limitation on amount or type of damages,
compensation or benefits payable by or for the Contractor or Subcontractor under workers compensation acts,
disability benefit acts or other employee benefit acts.
ARTICLE 10 ARCHITECT
10.1 The Architect will provide administration of the Contract and will be an Owners representative during
construction, until the date the Architect issues the final Certificate for Payment. The Architect will have authority to act
on behalf of the Owner only to the extent provided in the Contract Documents, unless otherwise modified in writing in
accordance with other provisions of the Contract.
10.2 The Architect will visit the site at intervals appropriate to the stage of the construction to become generally
familiar with the progress and quality of the portion of the Work completed, and to determine in general, if the Work
observed is being performed in a manner indicating that the Work, when fully completed, will be in accordance with the
Contract Documents. However, the Architect will not be required to make exhaustive or continuous on-site inspections
to check the quality or quantity of the Work. The Architect will not have control over, charge of, or responsibility for,
the construction means, methods, techniques, sequences or procedures, or for safety precautions and programs in
connection with the Work, since these are solely the Contractors rights and responsibilities under the Contract
Documents.
10.3 On the basis of the site visits, the Architect will keep the Owner reasonably informed about the progress and
quality of the portion of the Work completed, and report to the Owner (1) known deviations from the Contract
Documents and from the most recent construction schedule submitted by the Contractor, and (2) defects and
deficiencies observed in the Work. The Architect will not be responsible for the Contractors failure to perform the
Work in accordance with the requirements of the Contract Documents. The Architect will not have control over or
charge of and will not be responsible for acts or omissions of the Contractor, Subcontractors, or their agents or
employees, or any other persons or entities performing portions of the Work.
10.4 Based on the Architects evaluations of the Work and of the Contractors Applications for Payment, the Architect
will review and certify the amounts due the Contractor and will issue Certificates for Payment in such amounts.
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10.5 The Architect has authority to reject Work that does not conform to the Contract Documents and to require
inspection or testing of the Work.
10.6 The Architect will review and approve or take other appropriate action upon the Contractors submittals such as
Shop Drawings, Product Data and Samples, but only for the limited purpose of checking for conformance with
information given and the design concept expressed in the Contract Documents.
10.7 The Architect will interpret and decide matters concerning performance under, and requirements of, the Contract
Documents on written request of either the Owner or Contractor. The Architect will make initial decisions on all claims,
disputes and other matters in question between the Owner and Contractor but will not be liable for results of any
interpretations or decisions rendered in good faith.
10.8 The Architects decisions on matters relating to aesthetic effect will be final if consistent with the intent expressed
in the Contract Documents.
10.9 Duties, responsibilities and limitations of authority of the Architect as set forth in the Contract Documents shall
not be restricted, modified or extended without written consent of the Owner, Contractor and Architect. Consent shall
not be unreasonably withheld.
ARTICLE 11 SUBCONTRACTORS
11.1 A Subcontractor is a person or entity who has a direct contract with the Contractor to perform a portion of the
Work at the site.
11.2 Unless otherwise stated in the Contract Documents or the bidding requirements, the Contractor, as soon as
practicable after award of the Contract, shall furnish in writing to the Owner through the Architect the names of the
Subcontractors or suppliers for each of the principal portions of the Work. The Contractor shall not contract with any
Subcontractor or supplier to whom the Owner or Architect has made reasonable written objection within ten days after
receipt of the Contractors list of Subcontractors and suppliers. If the proposed but rejected Subcontractor was
reasonably capable of performing the Work, the Contract Sum and Contract Time shall be increased or decreased by the
difference, if any, occasioned by such change, and an appropriate Change Order shall be issued before commencement
of the substitute Subcontractors Work. The Contractor shall not be required to contract with anyone to whom the
Contractor has made reasonable objection.
11.3 Contracts between the Contractor and Subcontractors shall (1) require each Subcontractor, to the extent of the
Work to be performed by the Subcontractor, to be bound to the Contractor by the terms of the Contract Documents, and
to assume toward the Contractor all the obligations and responsibilities, including the responsibility for safety of the
Subcontractors Work, which the Contractor, by the Contract Documents, assumes toward the Owner and Architect, and
(2) allow the Subcontractor the benefit of all rights, remedies and redress against the Contractor that the Contractor, by
these Contract Documents, has against the Owner.
ARTICLE 12 CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS
12.1 The Owner reserves the right to perform construction or operations related to the Project with the Owners own
forces, and to award separate contracts in connection with other portions of the Project or other construction or
operations on the site under conditions of the contract identical or substantially similar to these, including those portions
related to insurance and waiver of subrogation. If the Contractor claims that delay or additional cost is involved because
of such action by the Owner, the Contractor shall make such claim as provided in Article 21.
12.2 The Contractor shall afford the Owner and separate contractors reasonable opportunity for introduction and
storage of their materials and equipment and performance of their activities, and shall connect and coordinate the
Contractors activities with theirs as required by the Contract Documents.
12.3 The Owner shall be reimbursed by the Contractor for costs incurred by the Owner which are payable to a separate
contractor because of delays, improperly timed activities or defective construction of the Contractor. The Owner shall
be responsible to the Contractor for costs incurred by the Contractor because of delays, improperly timed activities,
damage to the Work or defective construction of a separate contractor.
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ARTICLE 13 CHANGES IN THE WORK

13.1 By appropriate Modification, changes in the Work may be accomplished after execution of the Contract. The
Owner, without invalidating the Contract, may order changes in the Work within the general scope of the Contract
consisting of additions, deletions or other revisions, with the Contract Sum and Contract Time being adjusted
accordingly. Such changes in the Work shall be authorized by written Change Order signed by the Owner, Contractor
and Architect, or by written Construction Change Directive signed by the Owner and Architect.
13.2 Adjustments in the Contract Sum and Contract Time resulting from a change in the Work shall be determined by
mutual agreement of the parties or, in the case of a Construction Change Directive signed only by the Owner and
Architect, by the Contractors cost of labor, material, equipment, and reasonable overhead and profit, unless the parties
agree on another method for determining the cost or credit. Pending final determination of the total cost of a
Construction Change Directive, the Contractor may request payment for Work completed pursuant to the Construction
Change Directive. The Architect will make an interim determination of the amount of payment due for purposes of
certifying the Contractors monthly Application for Payment. When the Owner and Contractor agree on adjustments to
the Contract Sum and Contract Time arising from a Construction Change Directive, the Architect will prepare a Change
Order.
13.3 The Architect will have authority to order minor changes in the Work not involving adjustment in the Contract
Sum or extension of the Contract Time and not inconsistent with the intent of the Contract Documents. Such changes
shall be effected by written order and shall be binding on the Owner and Contractor. The Contractor shall carry out such
written orders promptly.
13.4 If concealed or unknown physical conditions are encountered at the site that differ materially from those indicated
in the Contract Documents or from those conditions ordinarily found to exist, the Contract Sum and Contract Time shall
be equitably adjusted as mutually agreed between the Owner and Contractor; provided that the Contractor provides
notice to the Owner and Architect promptly and before conditions are disturbed.
ARTICLE 14 TIME
14.1 Time limits stated in the Contract Documents are of the essence of the Contract. By executing the Agreement the
Contractor confirms that the Contract Time is a reasonable period for performing the Work.
14.2 Unless otherwise provided, Contract Time is the period of time, including authorized adjustments, allotted in the
Contract Documents for Substantial Completion of the Work.
14.3 The term day as used in the Contract Documents shall mean calendar day unless otherwise specifically defined.
14.4 The date of Substantial Completion is the date certified by the Architect in accordance with Section 15.4.3.
14.5 If the Contractor is delayed at any time in the commencement or progress of the Work by changes ordered in the
Work, by labor disputes, fire, unusual delay in deliveries, abnormal adverse weather conditions not reasonably
anticipatable, unavoidable casualties or any causes beyond the Contractors control, or by other causes which the
Architect determines may justify delay, then the Contract Time shall be extended by Change Order for such reasonable
time as the Architect may determine, subject to the provisions of Article 21.
ARTICLE 15 PAYMENTS AND COMPLETION
15.1 APPLICATIONS FOR PAYMENT
15.1.1 Where the Contract is based on a Stipulated Sum or the Cost of the Work with a Guaranteed Maximum Price,
the Contractor shall submit to the Architect, before the first Application for Payment, a schedule of values, allocating
the entire Contract Sum to the various portions of the Work, prepared in such form and supported by such data to
substantiate its accuracy as the Architect may require. This schedule, unless objected to by the Architect, shall be used
in reviewing the Contractors Applications for Payment.
15.1.2 With each Application for Payment where the Contract Sum is based upon the Cost of the Work, or the Cost of the
Work with a Guaranteed Maximum Price, the Contractor shall submit payrolls, petty cash accounts, receipted invoices or
invoices with check vouchers attached, and any other evidence required by the Owner to demonstrate that cash
disbursements already made by the Contractor on account of the Cost of the Work equal or exceed (1) progress payments
already received by the Contractor, less (2) that portion of those payments attributable to the Contractors Fee; plus (3)
payrolls for the period covered by the present Application for Payment.
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15.1.3 Payments shall be made on account of materials and equipment delivered and suitably stored at the site for
subsequent incorporation in the Work. If approved in advance by the Owner, payment may similarly be made for
materials and equipment stored, and protected from damage, off the site at a location agreed upon in writing.
15.1.4 The Contractor warrants that title to all Work covered by an Application for Payment will pass to the Owner no
later than the time of payment. The Contractor further warrants that upon submittal of an Application for Payment all
Work for which Certificates for Payment have been previously issued and payments received from the Owner shall, to
the best of the Contractors knowledge, information and belief, be free and clear of liens, claims, security interests or
other encumbrances adverse to the Owners interests.
15.2 CERTIFICATES FOR PAYMENT
15.2.1 The Architect will, within seven days after receipt of the Contractors Application for Payment, either issue to
the Owner a Certificate for Payment, with a copy to the Contractor, for such amount as the Architect determines is
properly due, or notify the Contractor and Owner in writing of the Architects reasons for withholding certification in
whole or in part as provided in Section 15.2.3.
15.2.2 The issuance of a Certificate for Payment will constitute a representation by the Architect to the Owner, based
on the Architects evaluations of the Work and the data comprising the Application for Payment, that, to the best of the
Architects knowledge, information and belief, the Work has progressed to the point indicated and that the quality of the
Work is in accordance with the Contract Documents. The foregoing representations are subject to an evaluation of the
Work for conformance with the Contract Documents upon Substantial Completion, to results of subsequent tests and
inspections, to correction of minor deviations from the Contract Documents prior to completion and to specific
qualifications expressed by the Architect. The issuance of a Certificate for Payment will further constitute a
representation that the Contractor is entitled to payment in the amount certified. However, the issuance of a Certificate
for Payment will not be a representation that the Architect has (1) made exhaustive or continuous on-site inspections to
check the quality or quantity of the Work, (2) reviewed construction means, methods, techniques, sequences or
procedures, (3) reviewed copies of requisitions received from Subcontractors and material suppliers and other data
requested by the Owner to substantiate the Contractors right to payment, or (4) made examination to ascertain how or
for what purpose the Contractor has used money previously paid on account of the Contract Sum.
15.2.3 The Architect may withhold a Certificate for Payment in whole or in part, to the extent reasonably necessary to
protect the Owner, if in the Architects opinion the representations to the Owner required by Section 15.2.2 cannot be
made. If the Architect is unable to certify payment in the amount of the Application, the Architect will notify the
Contractor and Owner as provided in Section 15.2.1. If the Contractor and the Architect cannot agree on a revised
amount, the Architect will promptly issue a Certificate for Payment for the amount for which the Architect is able to
make such representations to the Owner. The Architect may also withhold a Certificate for Payment or, because of
subsequently discovered evidence, may nullify the whole or a part of a Certificate for Payment previously issued, to
such extent as may be necessary in the Architects opinion to protect the Owner from loss for which the Contractor is
responsible, including loss resulting from acts and omissions described in Section 9.2.2, because of
.1
defective Work not remedied;
.2
third party claims filed or reasonable evidence indicating probable filing of such claims unless security
acceptable to the Owner is provided by the Contractor;
.3
failure of the Contractor to make payments properly to Subcontractors or for labor, materials or
equipment;
.4
reasonable evidence that the Work cannot be completed for the unpaid balance of the Contract Sum;
.5
damage to the Owner or a separate contractor;
.6
reasonable evidence that the Work will not be completed within the Contract Time and that the unpaid
balance would not be adequate to cover actual or liquidated damages for the anticipated delay; or
.7
repeated failure to carry out the Work in accordance with the Contract Documents.
15.2.4 When the above reasons for withholding certification are removed, certification will be made for amounts
previously withheld.
15.3 PROGRESS PAYMENTS
15.3.1 The Contractor shall pay each Subcontractor, no later than seven days after receipt of payment, the amount to
which the Subcontractor is entitled, reflecting percentages actually retained from payments to the Contractor on account
of the Subcontractors portion of the Work. The Contractor shall, by appropriate agreement with each Subcontractor,
require each Subcontractor to make payments to sub-subcontractors in similar manner.
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15.3.2 Neither the Owner nor Architect shall have an obligation to pay or see to the payment of money to a
Subcontractor except as may otherwise be required by law.
15.3.3 A Certificate for Payment, a progress payment, or partial or entire use or occupancy of the Project by the Owner
shall not constitute acceptance of Work not in accordance with the Contract Documents.
15.4 SUBSTANTIAL COMPLETION
15.4.1 Substantial Completion is the stage in the progress of the Work when the Work or designated portion thereof is
sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or utilize the Work for
its intended use.
15.4.2 When the Contractor considers that the Work, or a portion thereof which the Owner agrees to accept separately,
is substantially complete, the Contractor shall prepare and submit to the Architect a comprehensive list of items to be
completed or corrected prior to final payment. Failure to include an item on such list does not alter the responsibility of
the Contractor to complete all Work in accordance with the Contract Documents.
15.4.3 Upon receipt of the Contractors list, the Architect will make an inspection to determine whether the Work or
designated portion thereof is substantially complete. When the Architect determines that the Work or designated portion
thereof is substantially complete, the Architect will issue a Certificate of Substantial Completion which shall establish
the date of Substantial Completion, establish responsibilities of the Owner and Contractor for security, maintenance,
heat, utilities, damage to the Work and insurance, and fix the time within which the Contractor shall finish all items on
the list accompanying the Certificate. Warranties required by the Contract Documents shall commence on the date of
Substantial Completion of the Work or designated portion thereof unless otherwise provided in the Certificate of
Substantial Completion.
15.4.4 The Certificate of Substantial Completion shall be submitted to the Owner and Contractor for their written
acceptance of responsibilities assigned to them in such Certificate. Upon such acceptance and consent of surety, if any,
the Owner shall make payment of retainage applying to such Work or designated portion thereof. Such payment shall be
adjusted for Work that is incomplete or not in accordance with the requirements of the Contract Documents.
15.5 FINAL COMPLETION AND FINAL PAYMENT
15.5.1 Upon receipt of the Contractors written notice that the Work is ready for final inspection and acceptance and
upon receipt of a final Application for Payment, the Architect will promptly make such inspection and, when the
Architect finds the Work acceptable under the Contract Documents and the Contract fully performed, the Architect will
promptly issue a final Certificate for Payment stating that to the best of the Architects knowledge, information and
belief, and on the basis of the Architects on-site visits and inspections, the Work has been completed in accordance
with terms and conditions of the Contract Documents and that the entire balance found to be due the Contractor and
noted in the final Certificate is due and payable. The Architects final Certificate for Payment will constitute a further
representation that conditions stated in Section 15.5.2 as precedent to the Contractors being entitled to final payment
have been fulfilled.
15.5.2 Final payment shall not become due until the Contractor has delivered to the Owner a complete release of all
liens arising out of this Contract or receipts in full covering all labor, materials and equipment for which a lien could be
filed, or a bond satisfactory to the Owner to indemnify the Owner against such lien. If such lien remains unsatisfied
after payments are made, the Contractor shall refund to the Owner all money that the Owner may be compelled to pay
in discharging such lien, including costs and reasonable attorneys fees.
15.5.3 The making of final payment shall constitute a waiver of claims by the Owner except those arising from
.1
liens, claims, security interests or encumbrances arising out of the Contract and unsettled;
.2
failure of the Work to comply with the requirements of the Contract Documents; or
.3
terms of special warranties required by the Contract Documents.
15.5.4 Acceptance of final payment by the Contractor, a Subcontractor or material supplier shall constitute a waiver of
claims by that payee except those previously made in writing and identified by that payee as unsettled at the time of
final Application for Payment.
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ARTICLE 16 PROTECTION OF PERSONS AND PROPERTY

16.1 SAFETY PRECAUTIONS AND PROGRAMS
The Contractor shall be responsible for initiating, maintaining and supervising all safety precautions and programs in
connection with the performance of the Contract. The Contractor shall take reasonable precautions for safety of, and
shall provide reasonable protection to prevent damage, injury or loss to
.1
employees on the Work and other persons who may be affected thereby;
.2
the Work and materials and equipment to be incorporated therein, whether in storage on or off the site,
under care, custody or control of the Contractor or the Contractors Subcontractors or Subsubcontractors; and
.3
other property at the site or adjacent thereto, such as trees, shrubs, lawns, walks, pavements, roadways,
structures and utilities not designated for removal, relocation or replacement in the course of
construction.
The Contractor shall comply with and give notices required by applicable laws, statutes, ordinances, codes, rules and
regulations, and lawful orders of public authorities bearing on safety of persons and property and their protection from
damage, injury or loss. The Contractor shall promptly remedy damage and loss to property caused in whole or in part by
the Contractor, a Subcontractor, a sub-subcontractor, or anyone directly or indirectly employed by any of them, or by
anyone for whose acts they may be liable and for which the Contractor is responsible under Sections 16.1.2 and 16.1.3,
except for damage or loss attributable to acts or omissions of the Owner or Architect or by anyone for whose acts either
of them may be liable, and not attributable to the fault or negligence of the Contractor. The foregoing obligations of the
Contractor are in addition to the Contractors obligations under Section 9.15.
16.2 HAZARDOUS MATERIALS
16.2.1 The Contractor is responsible for compliance with the requirements of the Contract Documents regarding
hazardous materials. If the Contractor encounters a hazardous material or substance not addressed in the Contract
Documents, and if reasonable precautions will be inadequate to prevent foreseeable bodily injury or death to persons
resulting from a material or substance, including but not limited to asbestos or polychlorinated biphenyl (PCB),
encountered on the site by the Contractor, the Contractor shall, upon recognizing the condition, immediately stop Work
in the affected area and report the condition to the Owner and Architect in writing. When the material or substance has
been rendered harmless, Work in the affected area shall resume upon written agreement of the Owner and Contractor.
By Change Order, the Contract Time shall be extended appropriately and the Contract Sum shall be increased in the
amount of the Contractors reasonable additional costs of shutdown, delay and start-up.
16.2.2 To the fullest extent permitted by law, the Owner shall indemnify and hold harmless the Contractor,
Subcontractors, Architect, Architects consultants and agents and employees of any of them from and against claims,
damages, losses and expenses, including but not limited to attorneys fees, arising out of or resulting from performance
of the Work in the affected area, if in fact, the material or substance presents the risk of bodily injury or death as
described in Section 16.2.1 and has not been rendered harmless, provided that such claim, damage, loss or expense is
attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the
Work itself), except to the extent that such damage, loss or expense is due to the fault or negligence of the party seeking
indemnity.
16.2.3 If, without negligence on the part of the Contractor, the Contractor is held liable by a government agency for the
cost of remediation of a hazardous material or substance solely by reason of performing Work as required by the
Contract Documents, the Owner shall indemnify the Contractor for all cost and expense thereby incurred.
ARTICLE 17 INSURANCE AND BONDS
17.1 The Contractor shall purchase from, and maintain in a company or companies lawfully authorized to do business
in the jurisdiction in which the Project is located, insurance for protection from claims under workers compensation
acts and other employee benefit acts which are applicable, claims for damages because of bodily injury, including death,
and claims for damages, other than to the Work itself, to property which may arise out of or result from the Contractors
operations and completed operations under the Contract, whether such operations be by the Contractor or by a
Subcontractor or anyone directly or indirectly employed by any of them. This insurance shall be written for not less than
limits of liability specified in the Contract Documents or required by law, whichever coverage is greater, and shall
include contractual liability insurance applicable to the Contractors obligations under Section 9.15. Certificates of
Insurance acceptable to the Owner shall be filed with the Owner prior to commencement of the Work. Each policy shall
contain a provision that the policy will not be canceled or allowed to expire until at least 30 days prior written notice
has been given to the Owner. The Contractor shall cause the commercial liability coverage required by the Contract
Documents to include: (1) the Owner, the Architect and the Architects Consultants as additional insureds for claims
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caused in whole or in part by the Contractors negligent acts or omissions during the Contractors operations; and (2)
the Owner as an additional insured for claims caused in whole or in part by the Contractors negligent acts or omissions
during the Contractors completed operations.
17.2 OWNERS LIABILITY INSURANCE
The Owner shall be responsible for purchasing and maintaining the Owners usual liability insurance.
17.3 PROPERTY INSURANCE
17.3.1 Unless otherwise provided, the Owner shall purchase and maintain, in a company or companies lawfully
authorized to do business in the jurisdiction in which the Project is located, property insurance on an all-risk or
equivalent policy form, including builders risk, in the amount of the initial Contract Sum, plus the value of subsequent
modifications and cost of materials supplied and installed by others, comprising total value for the entire Project at the
site on a replacement cost basis without optional deductibles. Such property insurance shall be maintained, unless
otherwise provided in the Contract Documents or otherwise agreed in writing by all persons and entities who are
beneficiaries of such insurance, until final payment has been made as provided in Section 15.5 or until no person or
entity other than the Owner has an insurable interest in the property required by this Section 17.3.1 to be covered,
whichever is later. This insurance shall include interests of the Owner, the Contractor, Subcontractors and subsubcontractors in the Project.
17.3.2 The Owner shall file a copy of each policy with the Contractor before an exposure to loss may occur. Each
policy shall contain a provision that the policy will not be canceled or allowed to expire, and that its limits will not be
reduced, until at least 30 days prior written notice has been given to the Contractor.
17.3.3 The Owner and Contractor waive all rights against (1) each other and any of their subcontractors, subsubcontractors, agents and employees, each of the other, and (2) the Architect, Architects consultants, separate
contractors described in Article 12, if any, and any of their subcontractors, sub-subcontractors, agents and employees
for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to
Section 17.3 or other property insurance applicable to the Work, except such rights as they have to proceeds of such
insurance held by the Owner as fiduciary. The Owner or Contractor, as appropriate, shall require of the Architect,
Architects consultants, separate contractors described in Article 12, if any, and the subcontractors, sub-subcontractors,
agents and employees of any of them, by appropriate agreements, written where legally required for validity, similar
waivers each in favor of other parties enumerated herein. The policies shall provide such waivers of subrogation by
endorsement or otherwise. A waiver of subrogation shall be effective as to a person or entity even though that person or
entity would otherwise have a duty of indemnification, contractual or otherwise, did not pay the insurance premium
directly or indirectly, and whether or not the person or entity had an insurable interest in the property damaged.
17.3.4 A loss insured under the Owners property insurance shall be adjusted by the Owner as fiduciary and made
payable to the Owner as fiduciary for the insureds, as their interests may appear, subject to requirements of any
applicable mortgagee clause. The Contractor shall pay Subcontractors their just shares of insurance proceeds received
by the Contractor, and by appropriate agreements, written where legally required for validity, shall require
Subcontractors to make payments to their sub-subcontractors in similar manner.
17.4 PERFORMANCE BOND AND PAYMENT BOND
17.4.1 The Owner shall have the right to require the Contractor to furnish bonds covering faithful performance of the
Contract and payment of obligations arising thereunder as stipulated in bidding requirements or specifically required in
the Contract Documents on the date of execution of the Contract.
17.4.2 Upon the request of any person or entity appearing to be a potential beneficiary of bonds covering payment of
obligations arising under the Contract, the Contractor shall promptly furnish a copy of the bonds or shall authorize a
copy to be furnished.
ARTICLE 18 CORRECTION OF WORK
18.1 The Contractor shall promptly correct Work rejected by the Architect or failing to conform to the requirements of
the Contract Documents, whether discovered before or after Substantial Completion and whether or not fabricated,
installed or completed. Costs of correcting such rejected Work, including additional testing and inspections, the cost of
uncovering and replacement, and compensation for the Architects services and expenses made necessary thereby, shall
be at the Contractors expense, unless compensable under Section A.2.7.3 in Exhibit A, Determination of the Cost of the
Work.
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18.2 In addition to the Contractors obligations under Section 9.4, if, within one year after the date of Substantial
Completion of the Work or designated portion thereof or after the date for commencement of warranties established
under Section 15.4.3, or by terms of an applicable special warranty required by the Contract Documents, any of the
Work is found to be not in accordance with the requirements of the Contract Documents, the Contractor shall correct it
promptly after receipt of written notice from the Owner to do so unless the Owner has previously given the Contractor a
written acceptance of such condition. The Owner shall give such notice promptly after discovery of the condition.
During the one-year period for correction of Work, if the Owner fails to notify the Contractor and give the Contractor an
opportunity to make the correction, the Owner waives the rights to require correction by the Contractor and to make a
claim for breach of warranty.
18.3 If the Contractor fails to correct nonconforming Work within a reasonable time, the Owner may correct it in
accordance with Section 8.3.
18.4 The one-year period for correction of Work shall be extended with respect to portions of Work first performed
after Substantial Completion by the period of time between Substantial Completion and the actual completion of that
portion of the Work.
18.5 The one-year period for correction of Work shall not be extended by corrective Work performed by the
Contractor pursuant to this Article 18.
ARTICLE 19 MISCELLANEOUS PROVISIONS
19.1 ASSIGNMENT OF CONTRACT
Neither party to the Contract shall assign the Contract without written consent of the other, except that the Owner may,
without consent of the Contractor, assign the Contract to a lender providing construction financing for the Project if the
lender assumes the Owners rights and obligations under the Contract Documents. The Contractor shall execute all
consents reasonably required to facilitate such assignment.
19.2 GOVERNING LAW
The Contract shall be governed by the law of the place where the Project is located, except, that if the parties have
selected arbitration as the method of binding dispute resolution, the Federal Arbitration Act shall govern Section 21.4.
19.3 TESTS AND INSPECTIONS
Tests, inspections and approvals of portions of the Work required by the Contract Documents or by applicable laws,
statutes, ordinances, codes, rules and regulations or lawful orders of public authorities shall be made at an appropriate
time. Unless otherwise provided, the Contractor shall make arrangements for such tests, inspections and approvals with
an independent testing laboratory or entity acceptable to the Owner, or with the appropriate public authority, and shall
bear all related costs of tests, inspections and approvals. The Contractor shall give the Architect timely notice of when
and where tests and inspections are to be made so that the Architect may be present for such procedures. The Owner
shall bear costs of (1) tests, inspections or approvals that do not become requirements until after bids are received or
negotiations concluded, and (2) of tests, inspections or approvals where building codes or applicable laws or regulations
prohibit the Owner from delegating the costs to the Contractor.
19.4 COMMENCEMENT OF STATUTORY LIMITATION PERIOD
The Owner and Contractor shall commence all claims and causes of action, whether in contract, tort, breach of warranty
or otherwise, against the other arising out of or related to the Contract in accordance with the requirements of the final
dispute resolution method selected in the Agreement within the period specified by applicable law, but in any case not
more than 10 years after the date of Substantial Completion of the Work. The Owner and Contractor waive all claims
and causes of action not commenced in accordance with this Section 19.4.
ARTICLE 20 TERMINATION OF THE CONTRACT
20.1 TERMINATION BY THE CONTRACTOR
If the Architect fails to certify payment as provided in Section 15.2.1 for a period of 30 days through no fault of the
Contractor, or if the Owner fails to make payment as provided in Section 4.1.3 for a period of 30 days, the Contractor
may, upon seven additional days written notice to the Owner and the Architect, terminate the Contract and recover
from the Owner payment for Work executed, including reasonable overhead and profit, costs incurred by reason of such
termination, and damages.
20.2 TERMINATION BY THE OWNER FOR CAUSE
20.2.1 The Owner may terminate the Contract if the Contractor
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.1
.2
.3
.4
repeatedly refuses or fails to supply enough properly skilled workers or proper materials;
fails to make payment to Subcontractors for materials or labor in accordance with the respective
agreements between the Contractor and the Subcontractors;
repeatedly disregards applicable laws, statutes, ordinances, codes, rules and regulations or lawful orders
of a public authority; or
otherwise is guilty of substantial breach of a provision of the Contract Documents.
20.2.2 When any of the above reasons exists, the Owner, upon certification by the Architect that sufficient cause exists
to justify such action, may, without prejudice to any other remedy the Owner may have and after giving the Contractor
seven days written notice, terminate the Contract and take possession of the site and of all materials, equipment, tools,
and construction equipment and machinery thereon owned by the Contractor and may finish the Work by whatever
reasonable method the Owner may deem expedient. Upon request of the Contractor, the Owner shall furnish to the
Contractor a detailed accounting of the costs incurred by the Owner in finishing the Work.
20.2.3 When the Owner terminates the Contract for one of the reasons stated in Section 20.2.1, the Contractor shall not
be entitled to receive further payment until the Work is finished.
20.2.4 If the unpaid balance of the Contract Sum exceeds costs of finishing the Work, including compensation for the
Architects services and expenses made necessary thereby, and other damages incurred by the Owner and not expressly
waived, such excess shall be paid to the Contractor. If such costs and damages exceed the unpaid balance, the
Contractor shall pay the difference to the Owner. The amount to be paid to the Contractor or Owner, as the case may be,
shall be certified by the Architect, upon application, and this obligation for payment shall survive termination of the
Contract.
20.3 TERMINATION BY THE OWNER FOR CONVENIENCE
The Owner may, at any time, terminate the Contract for the Owners convenience and without cause. The Contractor
shall be entitled to receive payment for Work executed, and costs incurred by reason of such termination, along with
reasonable overhead and profit on the Work not executed.
ARTICLE 21 CLAIMS AND DISPUTES
21.1 Claims, disputes and other matters in question arising out of or relating to this Contract, including those alleging
an error or omission by the Architect but excluding those arising under Section 16.2, shall be referred initially to the
Architect for decision. Such matters, except those waived as provided for in Section 21.8 and Sections 15.5.3 and
15.5.4, shall, after initial decision by the Architect or 30 days after submission of the matter to the Architect, be subject
to mediation as a condition precedent to binding dispute resolution.
21.2 If a claim, dispute or other matter in question relates to or is the subject of a mechanics lien, the party asserting
such matter may proceed in accordance with applicable law to comply with the lien notice or filing deadlines.
21.3 The parties shall endeavor to resolve their disputes by mediation which, unless the parties mutually agree
otherwise, shall be administered by the American Arbitration Association in accordance with their Construction
Industry Mediation Procedures in effect on the date of the Agreement. A request for mediation shall be made in writing,
delivered to the other party to this Agreement, and filed with the person or entity administering the mediation. The
request may be made concurrently with the binding dispute resolution but, in such event, mediation shall proceed in
advance of binding dispute resolution proceedings, which shall be stayed pending mediation for a period of 60 days
from the date of filing, unless stayed for a longer period by agreement of the parties or court order. If an arbitration is
stayed pursuant to this Section, the parties may nonetheless proceed to the selection of the arbitrator(s) and agree upon a
schedule for later proceedings.
21.4 If the parties have selected arbitration as the method for binding dispute resolution in the Agreement, any claim,
subject to, but not resolved by, mediation shall be subject to arbitration which, unless the parties mutually agree
otherwise, shall be administered by the American Arbitration Association, in accordance with the Construction Industry
Arbitration Rules in effect on the date of this Agreement. Demand for arbitration shall be made in writing, delivered to
the other party to the Contract, and filed with the person or entity administering the arbitration. The award rendered by
the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any
court having jurisdiction thereof.
21.5 Either party, at its sole discretion, may consolidate an arbitration conducted under this Agreement with any other
arbitration to which it is a party provided that (1) the arbitration agreement governing the other arbitration permits
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consolidation; (2) the arbitrations to be consolidated substantially involve common questions of law or fact; and (3) the
arbitrations employ materially similar procedural rules and methods for selecting arbitrator(s).
21.6 Any party to an arbitration may include by joinder persons or entities substantially involved in a common
question of law or fact whose presence is required if complete relief is to be accorded in arbitration provided that the
party sought to be joined consents in writing to such joinder. Consent to arbitration involving an additional person or
entity shall not constitute consent to arbitration of a Claim not described in the written Consent.
21.7 The foregoing agreement to arbitrate and other agreements to arbitrate with an additional person or entity duly
consented to by parties to the Agreement shall be specifically enforceable under applicable law in any court having
jurisdiction thereof.
21.8 CLAIMS FOR CONSEQUENTIAL DAMAGES
The Contractor and Owner waive claims against each other for consequential damages arising out of or relating to this
Contract. This mutual waiver includes
.1
damages incurred by the Owner for rental expenses, for losses of use, income, profit, financing, business
and reputation, and for loss of management or employee productivity or of the services of such persons;
and
.2
damages incurred by the Contractor for principal office expenses including the compensation of
personnel stationed there, for losses of financing, business and reputation, and for loss of profit except
anticipated profit arising directly from the Work.
This mutual waiver is applicable, without limitation, to all consequential damages due to either partys termination in
accordance with Article 20. Nothing contained in this Section 21.8 shall be deemed to preclude an award of liquidated
damages, when applicable, in accordance with the requirements of the Contract Documents.
This Agreement entered into as of the day and year first written above.
OWNER (Signature)
CONTRACTOR (Signature)
(Printed name and title)
(Printed name and title)
CAUTION: You should sign an original AIA Contract Document, on which this text appears in RED. An original assures that
changes will not be obscured.
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Document A107 2007 Exhibit A

TM
Determination of the Cost of the Work

for the following PROJECT:
(Name, location and brief description)
modification.
THE OWNER:
THE CONTRACTOR:
THE ARCHITECT:
ARTICLE A.1 CONTROL ESTIMATE

A.1.1 Where the Contract Sum is the Cost of the Work, plus the Contractors Fee without a Guaranteed Maximum
Price pursuant to Section 3.3 of the Agreement, the Contractor shall prepare and submit to the Owner, in writing, a
Control Estimate within 14 days of executing this Agreement. The Control Estimate shall include the estimated Cost of
the Work plus the Contractor's Fee. The Control Estimate shall be used to monitor actual costs and the timely
performance of the Work. The Contractor shall update the Control Estimate with each Application for Payment as
needed to reflect Changes in the Work.
A.1.2 The Control Estimate shall include
.1
the documents enumerated in Article 6 of the Agreement, including all Addenda thereto and the
Conditions of the Contract;
.2
a list of the clarifications and assumptions made by the Contractor in the preparation of the Control
Estimate, including assumptions under A.1.4, to supplement the information provided by the Owner and
contained in the Drawings and Specifications;
.3
a statement of the estimated Cost of the Work organized by trade categories or systems and the
Contractor's Fee;
.4
a project schedule indicating proposed Subcontractors, activity sequences and durations, milestone dates
for receipt and approval of pertinent information, schedule of shop drawings and samples, procurement
and delivery of materials or equipment requiring long-lead time, and the Owner's occupancy
requirements showing portions of the Project having occupancy priority; and
.5
contingencies for further development of design and construction as required by Section A.1.4.
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A.1.3 The Contractor shall meet with the Owner and Architect to review the Control Estimate. In the event that the
Owner or Architect discovers any inconsistencies or inaccuracies in the information presented, they shall promptly
notify the Contractor, who shall make appropriate adjustments to the Control Estimate. When the Control Estimate is
acceptable to the Owner, the Owner shall acknowledge it in writing. The Owner's acceptance of the Control Estimate
does not imply that the Control Estimate constitutes a Guaranteed Maximum Price.
A.1.4 To the extent that the Drawings and Specifications are anticipated to require further development by the
Architect, the Contractor shall provide in the Control Estimate for such further development consistent with the
Contract Documents and reasonably inferable therefrom. Such further development does not include changes in scope,
systems, kinds and quality of materials, finishes or equipment, all of which, if required, shall be incorporated in a
revised Control Estimate by mutual agreement of the parties.
A.1.5 The Contractor shall develop and implement a detailed system of cost control that will provide the Owner and
Architect with timely information as to the anticipated total Cost of the Work. The cost control system shall compare
the Control Estimate with the actual cost for activities in progress and estimates for uncompleted tasks and proposed
changes. This information shall be reported to the Owner, in writing, no later than the Contractor's first Application for
Payment and shall be revised and submitted with each Application for Payment.
ARTICLE A.2 COSTS TO BE REIMBURSED
A.2.1 COST OF THE WORK
A.2.1.1 The term Cost of the Work shall mean costs necessarily incurred by the Contractor in the proper performance
of the Work. Such costs shall be at rates not higher than the standard paid at the place of the Project except with prior
consent of the Owner. The Cost of the Work shall include only the items set forth in this Article A.2.
A.2.1.2 Where any cost is subject to the Owner's prior approval, the Contractor shall obtain this approval prior to
incurring the cost. The parties shall endeavor to identify any such costs prior to executing the Agreement.
A.2.2 LABOR COSTS
A.2.2.1 Wages of construction workers directly employed by the Contractor to perform the construction of the Work at
the site or, with the Owner's prior approval, at off-site workshops.
A.2.2.2 Wages or salaries of the Contractor's supervisory and administrative personnel when stationed at the site with
the Owner's prior approval.
(If it is intended that the wages or salaries of certain personnel stationed at the Contractor's principal or other offices
shall be included in the Cost of the Work, identify below the personnel to be included, whether for all or only part of
their time, and the rates at which their time will be charged to the Work.)
Person Included
Status (full-time/part-time)
Rate ($0.00)
Rate (unit of time)
A.2.2.3 Wages and salaries of the Contractor's supervisory or administrative personnel engaged at factories, workshops
or on the road, in expediting the production or transportation of materials or equipment required for the Work, but only
for that portion of their time required for the Work.
A.2.2.4 Costs paid or incurred by the Contractor for taxes, insurance, contributions, assessments and benefits required
by law or collective bargaining agreements and, for personnel not covered by such agreements, customary benefits such
as sick leave, medical and health benefits, holidays, vacations and pensions, provided such costs are based on wages
and salaries included in the Cost of the Work under Section A.2.2.
A.2.2.5 Bonuses, profit sharing, incentive compensation and any other discretionary payments paid to anyone hired by
the Contractor or paid to any Subcontractor or vendor, with the Owner's prior approval.
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A.2.3 SUBCONTRACT COSTS

Payments made by the Contractor to Subcontractors in accordance with the requirements of their subcontracts.
A.2.4 COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED CONSTRUCTION
A.2.4.1 Costs, including transportation and storage, of materials and equipment incorporated or to be incorporated in
the completed construction.
A.2.4.2 Costs of materials described in the preceding Section A.2.4.1 in excess of those actually installed to allow for
reasonable waste and spoilage. Unused excess materials, if any, shall become the Owner's property at the completion of
the Work or, at the Owner's option, shall be sold by the Contractor. Any amounts realized from such sales shall be
credited to the Owner as a deduction from the Cost of the Work.
A.2.5 COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND RELATED ITEMS
A.2.5.1 Costs of transportation, storage, installation, maintenance, dismantling and removal of materials, supplies,
temporary facilities, machinery, equipment and hand tools not customarily owned by construction workers that are
provided by the Contractor at the site and fully consumed in the performance of the Work. Costs of materials, supplies,
temporary facilities, machinery, equipment and tools that are not fully consumed shall be based on the cost or value of
the item at the time it is first used on the Project site less the value of the item when it is no longer used at the Project
site. Costs for items not fully consumed by the Contractor shall mean fair market value.
A.2.5.2 Rental charges for temporary facilities, machinery, equipment and hand tools not customarily owned by
construction workers that are provided by the Contractor at the site and costs of transportation, installation, minor
repairs, dismantling and removal. The total rental cost of any Contractor-owned item may not exceed the purchase price
of any comparable item. Rates of Contractor-owned equipment and quantities of equipment shall be subject to the
Owner's prior approval.
A.2.5.3 Costs of removal of debris from the site of the Work and its proper and legal disposal.
A.2.5.4 Costs of document reproductions, facsimile transmissions and long-distance telephone calls, postage and
parcel delivery charges, telephone service at the site and reasonable petty cash expenses of the site office.
A.2.5.5 Costs of materials and equipment suitably stored off the site at a mutually acceptable location, with the
A.2.6 MISCELLANEOUS COSTS
A.2.6.1 Premiums for that portion of insurance and bonds required by the Contract Documents that can be directly
attributed to this Contract. Self-insurance for either full or partial amounts of the coverages required by the Contract
Documents, with the Owner's prior approval.
A.2.6.2 Sales, use or similar taxes imposed by a governmental authority that are related to the Work and for which the
Contractor is liable.
A.2.6.3 Fees and assessments for the building permit and for other permits, licenses and inspections for which the
Contractor is required by the Contract Documents to pay.
A.2.6.4 Fees of laboratories for tests required by the Contract Documents, except those related to defective or
nonconforming Work for which reimbursement is excluded by Article 18 of the Agreement or by other provisions of
the Contract Documents, and which do not fall within the scope of Section A.2.7.3.
A.2.6.5 Royalties and license fees paid for the use of a particular design, process or product required by the Contract
Documents; the cost of defending suits or claims for infringement of patent rights arising from such requirement of the
Contract Documents; and payments made in accordance with legal judgments against the Contractor resulting from
such suits or claims and payments of settlements made with the Owner's consent. However, such costs of legal
defenses, judgments and settlements shall not be included in the calculation of the Contractor's Fee or subject to the
Guaranteed Maximum Price. If such royalties, fees and costs are excluded by the last sentence of Section 9.13 of the
Agreement or other provisions of the Contract Documents, then they shall not be included in the Cost of the Work.
A.2.6.6 Costs for electronic equipment and software, directly related to the Work with the Owner's prior approval.
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A.2.6.7 Deposits lost for causes other than the Contractor's negligence or failure to fulfill a specific responsibility in
the Contract Documents.
A.2.6.8 Legal, mediation and arbitration costs, including attorneys' fees, other than those arising from disputes between
the Owner and Contractor, reasonably incurred by the Contractor after the execution of this Agreement in the
performance of the Work and with the Owner's prior approval, which shall not be unreasonably withheld.
A.2.6.9 Subject to the Owner's prior approval, expenses incurred in accordance with the Contractor's standard written
personnel policy for relocation and temporary living allowances of the Contractor's personnel required for the Work.
A.2.6.10 That portion of the reasonable expenses of the Contractor's supervisory or administrative personnel incurred
while traveling in discharge of duties connected with the Work.
A.2.7 OTHER COSTS AND EMERGENCIES
A.2.7.1 Other costs incurred in the performance of the Work if, and to the extent, approved in advance in writing by
the Owner.
A.2.7.2 Costs incurred in taking action to prevent threatened damage, injury or loss in case of an emergency affecting
the safety of persons and property.
A.2.7.3 Costs of repairing or correcting damaged or nonconforming Work executed by the Contractor, Subcontractors
or suppliers, provided that such damaged or nonconforming Work was not caused by negligence or failure to fulfill a
specific responsibility of the Contractor and only to the extent that the cost of repair or correction is not recovered by
the Contractor from insurance, sureties, Subcontractors, suppliers, or others.
A.2.8 RELATED PARTY TRANSACTIONS
A.2.8.1 For purposes of Section A.2.8, the term related party shall mean a parent, subsidiary, affiliate or other entity
having common ownership or management with the Contractor; any entity in which any stockholder in, or management
employee of, the Contractor owns any interest in excess of ten percent in the aggregate; or any person or entity which
has the right to control the business or affairs of the Contractor. The term related party includes any member of the
immediate family of any person identified above.
A.2.8.2 If any of the costs to be reimbursed arise from a transaction between the Contractor and a related party, the
Contractor shall notify the Owner of the specific nature of the contemplated transaction, including the identity of the
related party and the anticipated cost to be incurred, before any such transaction is consummated or cost incurred. If the
Owner, after such notification, authorizes the proposed transaction, then the cost incurred shall be included as a cost to
be reimbursed, and the Contractor shall procure the Work, equipment, goods or service from the related party, as a
Subcontractor, according to the terms of Article A.5. If the Owner fails to authorize the transaction, the Contractor shall
procure the Work, equipment, goods or service from some person or entity other than a related party according to the
terms of Article A.5.
ARTICLE A.3 COSTS NOT TO BE REIMBURSED
A.3.1 The Cost of the Work shall not include the items listed below:
.1
Salaries and other compensation of the Contractor's personnel stationed at the Contractor's principal
office or offices other than the site office, except as specifically provided in Section A2.2.2;
.2
Expenses of the Contractor's principal office and offices other than the site office;
.3
Overhead and general expenses, except as may be expressly included in Article A.2;
.4
The Contractor's capital expenses, including interest on the Contractor's capital employed for the Work;
.5
Except as provided in Section A.2.7.3 of this Agreement, costs due to the negligence or failure of the
Contractor, Subcontractors and suppliers or anyone directly or indirectly employed by any of them or for
whose acts any of them may be liable to fulfill a specific responsibility of the Contract;
.6
Any cost not specifically and expressly described in Article A.2; and
.7
Costs, other than costs included in Change Orders approved by the Owner, that would cause the
Guaranteed Maximum Price to be exceeded.
ARTICLE A.4 DISCOUNTS, REBATES AND REFUNDS
A.4.1 Cash discounts obtained on payments made by the Contractor shall accrue to the Owner if (1) before making the
payment, the Contractor included them in an Application for Payment and received payment from the Owner, or (2) the
Owner has deposited funds with the Contractor with which to make payments; otherwise, cash discounts shall accrue to
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the Contractor. Trade discounts, rebates, refunds and amounts received from sales of surplus materials and equipment
shall accrue to the Owner, and the Contractor shall make provisions so that they can be obtained.
A.4.2 Amounts that accrue to the Owner in accordance with Section A.4.1 shall be credited to the Owner as a
deduction from the Cost of the Work.
ARTICLE A.5 SUBCONTRACTS AND OTHER AGREEMENTS
A.5.1 Those portions of the Work that the Contractor does not customarily perform with the Contractor's own
personnel shall be performed under subcontracts or by other appropriate agreements with the Contractor. The Owner
may designate specific persons from whom, or entities from which, the Contractor shall obtain bids. The Contractor
shall obtain bids from Subcontractors and from suppliers of materials or equipment fabricated especially for the Work
and shall deliver such bids to the Architect. The Owner shall then determine, with the advice of the Contractor and the
Architect, which bids will be accepted. The Contractor shall not be required to contract with anyone to whom the
Contractor has reasonable objection.
A.5.2 When a the Contractor has provided a Guaranteed Maximum Price, and a specific bidder (1) is recommended to
the Owner by the Contractor; (2) is qualified to perform that portion of the Work; and (3) has submitted a bid that
conforms to the requirements of the Contract Documents without reservations or exceptions, but the Owner requires
that another bid be accepted, then the Contractor may require that a Change Order be issued to adjust the Guaranteed
Maximum Price by the difference between the bid of the person or entity recommended to the Owner by the Contractor
and the amount of the subcontract or other agreement actually signed with the person or entity designated by the
Owner.
A.5.3 Subcontracts or other agreements shall conform to the applicable payment provisions of this Agreement, and
shall not be awarded on the basis of cost plus a fee without the prior consent of the Owner. If the subcontract is awarded
on a cost-plus a fee basis, the Contractor shall provide in the subcontract for the Owner to receive the same audit rights
with regard to the Subcontractor as the Owner receives with regard to the Contractor in Article A.6, below.
ARTICLE A.6 ACCOUNTING RECORDS
A.6.1 The Contractor shall keep full and detailed records and accounts related to the cost of the Work and exercise
such controls as may be necessary for proper financial management under this Contract and to substantiate all costs
incurred. The accounting and control systems shall be satisfactory to the Owner. The Owner and the Owner's auditors
shall, during regular business hours and upon reasonable notice, be afforded access to, and shall be permitted to audit
and copy, the Contractor's records and accounts, including complete documentation supporting accounting entries,
books, correspondence, instructions, drawings, receipts, subcontracts, Subcontractor's proposals, purchase orders,
vouchers, memoranda and other data relating to this Contract. The Contractor shall preserve these records, for a period
of three years after final payment, or for such longer period as may be required by law.
A.6.2 When the Contractor believes that all the Work required by the Agreement has been fully performed, the
Contractor shall deliver to the Owners auditors a final accounting of the Cost of the Work.
A.6.3 The Owners auditors will review and report in writing on the Contractors final accounting within 30 days after
delivery of the final accounting to the Architect by the Contractor. Based upon such Cost of the Work as the Owners
auditors report to be substantiated by the Contractors final accounting, and provided the other conditions of Section 4.2.1
of the Agreement have been met, the Architect will, within seven days after receipt of the written report of the Owners
auditors, either issue to the Owner a final Certificate for Payment with a copy to the Contractor, or notify the Contractor
and Owner in writing of the Architect's reasons for withholding a certificate as provided in Section 15.2.3 of the
Agreement. The Architect is not responsible for verifying the accuracy of the Contractor's final accounting.
A.6.4 If the Owners auditors report the Cost of the Work as substantiated by the Contractors final accounting to be less
than claimed by the Contractor, the Contractor shall be entitled to request mediation of the dispute without a further
decision of the Architect. A request for mediation shall be made by the Contractor within 30 days after the Contractor's
receipt of a copy of the Architect's final Certificate for Payment. If the Contractor fails to request mediation within this 30day period, the substantiated amount reported by the Owners auditors shall become binding on the Contractor. Pending a
final resolution of the disputed amount, the Owner shall pay the Contractor the amount, if any, determined by the Owners
auditors to be due the Contractor.
A.6.5 If, subsequent to final payment and at the Owners request, the Contractor incurs costs in connection with the
correction of defective or non-conforming work as described in Article A.2, Costs to be Reimbursed, and not excluded by
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Article A.3, Costs Not to be Reimbursed, the Owner shall reimburse the Contractor such costs and the Contractors Fee
applicable thereto on the same basis as if such costs had been incurred prior to final payment, but not in excess of the
Guaranteed Maximum Price, if any. If the Contractor has participated in savings, the amount of such savings shall be
recalculated and appropriate credit given to the Owner in determining the net amount to be paid by the Owner to the
Contractor.
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Document A107 2007 Exhibit A

TM
Determination of the Cost of the Work

for the following PROJECT:
(Name, location and brief description)
modification.
THE OWNER:
THE CONTRACTOR:
THE ARCHITECT:
ARTICLE A.1 CONTROL ESTIMATE

A.1.1 Where the Contract Sum is the Cost of the Work, plus the Contractors Fee without a Guaranteed Maximum
Price pursuant to Section 3.3 of the Agreement, the Contractor shall prepare and submit to the Owner, in writing, a
Control Estimate within 14 days of executing this Agreement. The Control Estimate shall include the estimated Cost of
the Work plus the Contractor's Fee. The Control Estimate shall be used to monitor actual costs and the timely
performance of the Work. The Contractor shall update the Control Estimate with each Application for Payment as
needed to reflect Changes in the Work.
A.1.2 The Control Estimate shall include
.1
the documents enumerated in Article 6 of the Agreement, including all Addenda thereto and the
Conditions of the Contract;
.2
a list of the clarifications and assumptions made by the Contractor in the preparation of the Control
Estimate, including assumptions under A.1.4, to supplement the information provided by the Owner and
contained in the Drawings and Specifications;
.3
a statement of the estimated Cost of the Work organized by trade categories or systems and the
Contractor's Fee;
.4
a project schedule indicating proposed Subcontractors, activity sequences and durations, milestone dates
for receipt and approval of pertinent information, schedule of shop drawings and samples, procurement
and delivery of materials or equipment requiring long-lead time, and the Owner's occupancy
requirements showing portions of the Project having occupancy priority; and
.5
contingencies for further development of design and construction as required by Section A.1.4.
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100510ACD43
A.1.3 The Contractor shall meet with the Owner and Architect to review the Control Estimate. In the event that the
Owner or Architect discovers any inconsistencies or inaccuracies in the information presented, they shall promptly
notify the Contractor, who shall make appropriate adjustments to the Control Estimate. When the Control Estimate is
acceptable to the Owner, the Owner shall acknowledge it in writing. The Owner's acceptance of the Control Estimate
does not imply that the Control Estimate constitutes a Guaranteed Maximum Price.
A.1.4 To the extent that the Drawings and Specifications are anticipated to require further development by the
Architect, the Contractor shall provide in the Control Estimate for such further development consistent with the
Contract Documents and reasonably inferable therefrom. Such further development does not include changes in scope,
systems, kinds and quality of materials, finishes or equipment, all of which, if required, shall be incorporated in a
revised Control Estimate by mutual agreement of the parties.
A.1.5 The Contractor shall develop and implement a detailed system of cost control that will provide the Owner and
Architect with timely information as to the anticipated total Cost of the Work. The cost control system shall compare
the Control Estimate with the actual cost for activities in progress and estimates for uncompleted tasks and proposed
changes. This information shall be reported to the Owner, in writing, no later than the Contractor's first Application for
Payment and shall be revised and submitted with each Application for Payment.
ARTICLE A.2 COSTS TO BE REIMBURSED
A.2.1 Cost of the Work
A.2.1.1 The term Cost of the Work shall mean costs necessarily incurred by the Contractor in the proper performance
of the Work. Such costs shall be at rates not higher than the standard paid at the place of the Project except with prior
consent of the Owner. The Cost of the Work shall include only the items set forth in this Article A.2.
A.2.1.2 Where any cost is subject to the Owner's prior approval, the Contractor shall obtain this approval prior to
incurring the cost. The parties shall endeavor to identify any such costs prior to executing the Agreement.
A.2.2 Labor Costs
A.2.2.1 Wages of construction workers directly employed by the Contractor to perform the construction of the Work at
the site or, with the Owner's prior approval, at off-site workshops.
A.2.2.2 Wages or salaries of the Contractor's supervisory and administrative personnel when stationed at the site with
the Owner's prior approval.
(If it is intended that the wages or salaries of certain personnel stationed at the Contractor's principal or other offices
shall be included in the Cost of the Work, identify below the personnel to be included, whether for all or only part of
their time, and the rates at which their time will be charged to the Work.)
Person Included
Status (full-time/part-time)
Rate ($0.00)
Rate (unit of time)
A.2.2.3 Wages and salaries of the Contractor's supervisory or administrative personnel engaged at factories, workshops
or on the road, in expediting the production or transportation of materials or equipment required for the Work, but only
for that portion of their time required for the Work.
A.2.2.4 Costs paid or incurred by the Contractor for taxes, insurance, contributions, assessments and benefits required
by law or collective bargaining agreements and, for personnel not covered by such agreements, customary benefits such
as sick leave, medical and health benefits, holidays, vacations and pensions, provided such costs are based on wages
and salaries included in the Cost of the Work under Section A.2.2.
A.2.2.5 Bonuses, profit sharing, incentive compensation and any other discretionary payments paid to anyone hired by
the Contractor or paid to any Subcontractor or vendor, with the Owner's prior approval.
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A.2.3 Subcontract Costs

Payments made by the Contractor to Subcontractors in accordance with the requirements of their subcontracts.
A.2.4 Costs of Materials and Equipment Incorporated in the Completed Construction
A.2.4.1 Costs, including transportation and storage, of materials and equipment incorporated or to be incorporated in
the completed construction.
A.2.4.2 Costs of materials described in the preceding Section A.2.4.1 in excess of those actually installed to allow for
reasonable waste and spoilage. Unused excess materials, if any, shall become the Owner's property at the completion of
the Work or, at the Owner's option, shall be sold by the Contractor. Any amounts realized from such sales shall be
credited to the Owner as a deduction from the Cost of the Work.
A.2.5 Costs of Other Materials and Equipment, Temporary Facilities and Related Items
A.2.5.1 Costs of transportation, storage, installation, maintenance, dismantling and removal of materials, supplies,
temporary facilities, machinery, equipment and hand tools not customarily owned by construction workers that are
provided by the Contractor at the site and fully consumed in the performance of the Work. Costs of materials, supplies,
temporary facilities, machinery, equipment and tools that are not fully consumed shall be based on the cost or value of
the item at the time it is first used on the Project site less the value of the item when it is no longer used at the Project
site. Costs for items not fully consumed by the Contractor shall mean fair market value.
A.2.5.2 Rental charges for temporary facilities, machinery, equipment and hand tools not customarily owned by
construction workers that are provided by the Contractor at the site and costs of transportation, installation, minor
repairs, dismantling and removal. The total rental cost of any Contractor-owned item may not exceed the purchase price
of any comparable item. Rates of Contractor-owned equipment and quantities of equipment shall be subject to the
A.2.5.3 Costs of removal of debris from the site of the Work and its proper and legal disposal.
A.2.5.4 Costs of document reproductions, facsimile transmissions and long-distance telephone calls, postage and
parcel delivery charges, telephone service at the site and reasonable petty cash expenses of the site office.
A.2.5.5 Costs of materials and equipment suitably stored off the site at a mutually acceptable location, with the
A.2.6 Miscellaneous Costs
A.2.6.1 Premiums for that portion of insurance and bonds required by the Contract Documents that can be directly
attributed to this Contract. Self-insurance for either full or partial amounts of the coverages required by the Contract
Documents, with the Owner's prior approval.
A.2.6.2 Sales, use or similar taxes imposed by a governmental authority that are related to the Work and for which the
Contractor is liable.
A.2.6.3 Fees and assessments for the building permit and for other permits, licenses and inspections for which the
Contractor is required by the Contract Documents to pay.
A.2.6.4 Fees of laboratories for tests required by the Contract Documents, except those related to defective or
nonconforming Work for which reimbursement is excluded by Article 18 of the Agreement or by other provisions of
the Contract Documents, and which do not fall within the scope of Section A.2.7.3.
A.2.6.5 Royalties and license fees paid for the use of a particular design, process or product required by the Contract
Documents; the cost of defending suits or claims for infringement of patent rights arising from such requirement of the
Contract Documents; and payments made in accordance with legal judgments against the Contractor resulting from
such suits or claims and payments of settlements made with the Owner's consent. However, such costs of legal
defenses, judgments and settlements shall not be included in the calculation of the Contractor's Fee or subject to the
Guaranteed Maximum Price. If such royalties, fees and costs are excluded by the last sentence of Section 9.13 of the
Agreement or other provisions of the Contract Documents, then they shall not be included in the Cost of the Work.
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A.2.6.6 Costs for electronic equipment and software, directly related to the Work with the Owner's prior approval.
A.2.6.7 Deposits lost for causes other than the Contractor's negligence or failure to fulfill a specific responsibility in
the Contract Documents.
A.2.6.8 Legal, mediation and arbitration costs, including attorneys' fees, other than those arising from disputes between
the Owner and Contractor, reasonably incurred by the Contractor after the execution of this Agreement in the
performance of the Work and with the Owner's prior approval, which shall not be unreasonably withheld.
A.2.6.9 Subject to the Owner's prior approval, expenses incurred in accordance with the Contractor's standard written
personnel policy for relocation and temporary living allowances of the Contractor's personnel required for the Work.
A.2.6.10 That portion of the reasonable expenses of the Contractor's supervisory or administrative personnel incurred
while traveling in discharge of duties connected with the Work.
A.2.7 Other Costs and Emergencies
A.2.7.1 Other costs incurred in the performance of the Work if, and to the extent, approved in advance in writing by
the Owner.
A.2.7.2 Costs incurred in taking action to prevent threatened damage, injury or loss in case of an emergency affecting
the safety of persons and property.
A.2.7.3 Costs of repairing or correcting damaged or nonconforming Work executed by the Contractor, Subcontractors
or suppliers, provided that such damaged or nonconforming Work was not caused by negligence or failure to fulfill a
specific responsibility of the Contractor and only to the extent that the cost of repair or correction is not recovered by
the Contractor from insurance, sureties, Subcontractors, suppliers, or others.
A.2.8 Related Party Transactions
A.2.8.1 For purposes of Section A.2.8, the term related party shall mean a parent, subsidiary, affiliate or other entity
having common ownership or management with the Contractor; any entity in which any stockholder in, or management
employee of, the Contractor owns any interest in excess of ten percent in the aggregate; or any person or entity which
has the right to control the business or affairs of the Contractor. The term related party includes any member of the
immediate family of any person identified above.
A.2.8.2 If any of the costs to be reimbursed arise from a transaction between the Contractor and a related party, the
Contractor shall notify the Owner of the specific nature of the contemplated transaction, including the identity of the
related party and the anticipated cost to be incurred, before any such transaction is consummated or cost incurred. If the
Owner, after such notification, authorizes the proposed transaction, then the cost incurred shall be included as a cost to
be reimbursed, and the Contractor shall procure the Work, equipment, goods or service from the related party, as a
Subcontractor, according to the terms of Article A.5. If the Owner fails to authorize the transaction, the Contractor shall
procure the Work, equipment, goods or service from some person or entity other than a related party according to the
terms of Article A.5.
ARTICLE A.3 COSTS NOT TO BE REIMBURSED
A.3.1 The Cost of the Work shall not include the items listed below:
.1
Salaries and other compensation of the Contractor's personnel stationed at the Contractor's principal
office or offices other than the site office, except as specifically provided in Section A2.2.2;
.2
Expenses of the Contractor's principal office and offices other than the site office;
.3
Overhead and general expenses, except as may be expressly included in Article A.2;
.4
The Contractor's capital expenses, including interest on the Contractor's capital employed for the Work;
.5
Except as provided in Section A.2.7.3 of this Agreement, costs due to the negligence or failure of the
Contractor, Subcontractors and suppliers or anyone directly or indirectly employed by any of them or for
whose acts any of them may be liable to fulfill a specific responsibility of the Contract;
.6
Any cost not specifically and expressly described in Article A.2; and
.7
Costs, other than costs included in Change Orders approved by the Owner, that would cause the
Guaranteed Maximum Price to be exceeded.
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ARTICLE A.4 DISCOUNTS, REBATES AND REFUNDS

A.4.1 Cash discounts obtained on payments made by the Contractor shall accrue to the Owner if (1) before making the
payment, the Contractor included them in an Application for Payment and received payment from the Owner, or (2) the
Owner has deposited funds with the Contractor with which to make payments; otherwise, cash discounts shall accrue to
the Contractor. Trade discounts, rebates, refunds and amounts received from sales of surplus materials and equipment
shall accrue to the Owner, and the Contractor shall make provisions so that they can be obtained.
A.4.2 Amounts that accrue to the Owner in accordance with Section A.4.1 shall be credited to the Owner as a
deduction from the Cost of the Work.
ARTICLE A.5 SUBCONTRACTS AND OTHER AGREEMENTS
A.5.1 Those portions of the Work that the Contractor does not customarily perform with the Contractor's own personnel
shall be performed under subcontracts or by other appropriate agreements with the Contractor. The Owner may designate
specific persons from whom, or entities from which, the Contractor shall obtain bids. The Contractor shall obtain bids from
Subcontractors and from suppliers of materials or equipment fabricated especially for the Work and shall deliver such bids
to the Architect. The Owner shall then determine, with the advice of the Contractor and the Architect, which bids will be
accepted. The Contractor shall not be required to contract with anyone to whom the Contractor has reasonable objection.
A.5.2 When the Contractor has provided a Guaranteed Maximum Price, and a specific bidder (1) is recommended to the
Owner by the Contractor; (2) is qualified to perform that portion of the Work; and (3) has submitted a bid that conforms to
the requirements of the Contract Documents without reservations or exceptions, but the Owner requires that another bid be
accepted, then the Contractor may require that a Change Order be issued to adjust the Guaranteed Maximum Price by the
difference between the bid of the person or entity recommended to the Owner by the Contractor and the amount of the
subcontract or other agreement actually signed with the person or entity designated by the Owner.
A.5.3 Subcontracts or other agreements shall conform to the applicable payment provisions of this Agreement, and
shall not be awarded on the basis of cost plus a fee without the prior consent of the Owner. If the subcontract is awarded
on a cost-plus a fee basis, the Contractor shall provide in the subcontract for the Owner to receive the same audit rights
with regard to the Subcontractor as the Owner receives with regard to the Contractor in Article A.6, below.
ARTICLE A.6 ACCOUNTING RECORDS
A.6.1 The Contractor shall keep full and detailed records and accounts related to the cost of the Work and exercise
such controls as may be necessary for proper financial management under this Contract and to substantiate all costs
incurred. The accounting and control systems shall be satisfactory to the Owner. The Owner and the Owner's auditors
shall, during regular business hours and upon reasonable notice, be afforded access to, and shall be permitted to audit
and copy, the Contractor's records and accounts, including complete documentation supporting accounting entries,
books, correspondence, instructions, drawings, receipts, subcontracts, Subcontractor's proposals, purchase orders,
vouchers, memoranda and other data relating to this Contract. The Contractor shall preserve these records, for a period
of three years after final payment, or for such longer period as may be required by law.
A.6.2 When the Contractor believes that all the Work required by the Agreement has been fully performed, the
Contractor shall deliver to the Owners auditors a final accounting of the Cost of the Work.
A.6.3 The Owners auditors will review and report in writing on the Contractors final accounting within 30 days after
delivery of the final accounting to the Architect by the Contractor. Based upon such Cost of the Work as the Owners
auditors report to be substantiated by the Contractors final accounting, and provided the other conditions of Section 4.2.1
of the Agreement have been met, the Architect will, within seven days after receipt of the written report of the Owners
auditors, either issue to the Owner a final Certificate for Payment with a copy to the Contractor, or notify the Contractor
and Owner in writing of the Architect's reasons for withholding a certificate as provided in Section 15.2.3 of the
Agreement. The Architect is not responsible for verifying the accuracy of the Contractor's final accounting.
A.6.4 If the Owners auditors report the Cost of the Work as substantiated by the Contractors final accounting to be
less than claimed by the Contractor, the Contractor shall be entitled to request mediation of the dispute without a further
decision of the Architect. A request for mediation shall be made by the Contractor within 30 days after the Contractor's
receipt of a copy of the Architect's final Certificate for Payment. If the Contractor fails to request mediation within this
30-day period, the substantiated amount reported by the Owners auditors shall become binding on the Contractor.
Pending a final resolution of the disputed amount, the Owner shall pay the Contractor the amount, if any, determined by
the Owners auditors to be due the Contractor.
Init.
/
A.6.5 If, subsequent to final payment and at the Owners request, the Contractor incurs costs in connection with the
correction of defective or non-conforming work as described in Article A.2, Costs to be Reimbursed, and not excluded by
Article A.3, Costs Not to be Reimbursed, the Owner shall reimburse the Contractor such costs and the Contractors Fee
applicable thereto on the same basis as if such costs had been incurred prior to final payment, but not in excess of the
Guaranteed Maximum Price, if any. If the Contractor has participated in savings, the amount of such savings shall be
recalculated and appropriate credit given to the Owner in determining the net amount to be paid by the Owner to the
Contractor.
Init.
/
Document A107 2007 Instructions

TM
Standard Form of Agreement Between Owner and Contractor for a Project

of Limited Scope
GENERAL INFORMATION
Purpose. AIA Document A1072007 establishes the agreement between an Owner and Contractor for construction
projects of a limited scope. A1072007 is a stand-alone agreement because it contains its own internal general
conditions and does not require the addition of a separate general conditions document. This agreement was formerly
written for use only where the basis of payment is a stipulated sum. In 2007, the AIA revised the agreement to
accommodate two additional payment methods: cost of the work plus a fee, with or without a guaranteed maximum
price. The Owner and Contractor are asked to select the payment method in the agreement using a check box. If either
of the two cost-plus payment methods is selected, then the parties will complete, and incorporate into the agreement,
Exhibit A, which provides the detail for the Cost of the Work.
For more complex projects, parties should consider using one of the following other owner-contractor agreements:
AIA Documents A1012007, A1022007 or A1032007. These agreements are written for a stipulated sum,
cost of the work with a guaranteed maximum price, and cost of the work without a guaranteed maximum price,
respectively. Each of them incorporates by reference AIA Document A2012007, General Conditions of the
Contract for Construction.
For single family residential projects, or smaller and less complex commercial projects, parties may wish to consider AIA
Document A1052007, Agreement Between Owner and Contractor for a Residential or Small Commercial Project.
Related Documents. AIA Document B1042007 Standard Form of Agreement Between Owner and Architect for a
Project of Limited Scope coordinates with A1072007 and incorporates it by reference. If another owner/architect
agreement is paired with A1072007, the architects duties set forth in A1072007 may require revision.
A1072007 is used as one part of the Contract Documents that record the Contract for Construction between the
Owner and Contractor. The other Contract Documents are Supplementary Conditions, Drawings, Specifications and
Modifications. Although the AIA does not produce standard documents for Supplementary Conditions, Drawings or
Specifications, a variety of model and guide documents are available, including AIAs MASTERSPEC and AIA
Document A5032007, Guide for Supplementary Conditions.
If AIA Document A1072007 is to be used on a project with AIA Document A4012007, Agreement Between
Contractor and Subcontractor, appropriate modifications should be made with the assistance of legal and insurance
counsel. Such modifications will be needed because A4012007 incorporates by reference AIA Document A2012007,
General Conditions of the Contract for Construction, while A1072007 contains its own general conditions.
Dispute ResolutionMediation and Arbitration. This document contains provisions for mediation and arbitration
of claims and disputes. Mediation is a non-binding process, but is mandatory under the terms of this agreement.
Arbitration may be mandatory under the terms of this agreement and binding in most states and under the Federal
Arbitration Act. In a minority of states, arbitration provisions relating to future disputes are not enforceable but the
parties may agree to arbitrate after the dispute arises. Even in those states, under certain circumstances (for example,
in a transaction involving interstate commerce), arbitration provisions may be enforceable under the Federal
Arbitration Act.
The AIA does not administer dispute resolution processes. To submit disputes to mediation or arbitration or to obtain
copies of the applicable mediation or arbitration rules, call the American Arbitration Association at (800) 778-7879, or
visit their Web site at www.adr.org.
Why Use AIA Contract Documents. AIA Contract Documents are the product of a consensus-building process
aimed at balancing the interests of all parties on the construction project. The documents reflect actual industry
practices, not theory. They are state-of-the-art legal documents, regularly revised to keep up with changes in law and
Architects. All rights reserved. WARNING: This AIA Document is protected by U.S. Copyright Law and International Treaties. Unauthorized
reproduction or distribution of this AIA Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to
the maximum extent possible under the law. Purchasers are permitted to reproduce ten (10) copies of this document when completed. To report copyright
100510ACD43
violations of AIA Contract Documents, e-mail The American Institute of Architects legal counsel, [email protected].
the industryyet they are written, as far as possible, in everyday language. Finally, AIA Contract Documents are
flexible: they are intended to be modified to fit individual projects, but in such a way that modifications are easily
distinguished from the original, printed language.
Use of Non-AIA Forms. If a combination of AIA documents and non-AIA documents is to be used, particular care
must be taken to achieve consistency of language and intent among documents.
Letter Forms of Agreement. Letter forms of agreement are generally discouraged by the AIA, as is the performance
of a part or the whole of the Work based on oral agreements or understandings. The standard AIA agreement forms
have been developed through more than 100 years of experience and have been tested repeatedly in the courts. In
addition, the standard forms have been carefully coordinated with other AIA documents.
Standard Forms. Most AIA documents published since 1906 have contained in their titles the words Standard
Form. The term standard is not meant to imply that a uniform set of contractual requirements is mandatory for AIA
members or others in the construction industry. Rather, the AIA standard documents are intended to be used as fair
and balanced baselines from which the parties can negotiate their bargains. As such, the documents have won general
acceptance within the construction industry and have been uniformly interpreted by the courts. Within an industry
spanning 50 stateseach free to adopt different, and perhaps contradictory, laws affecting that industryAIA
documents form the basis for a generally consistent body of construction law.
Use of Current Documents. Prior to using any AIA Contract Document, users should consult www.aia.org or a local
AIA component to verify the most recent edition.
Reproductions. This document is a copyrighted work and may not be reproduced or excerpted from without the
express written permission of the AIA. There is no implied permission to reproduce this document, nor does
membership in The American Institute of Architects confer any further rights to reproduce this document.
This document is intended for use as a consumablethat is, the original document purchased is to be consumed in the
course of its use. This document may not be reproduced for project manuals. If a user wishes to include a sample or
samples of this document in a project manual, the normal practice is to purchase a quantity of the preprinted forms,
binding one in each of the manuals.
The AIA hereby grants the purchaser a limited license to reproduce a maximum of ten copies of a completed A1072007,
but only for use in connection with a particular project. The AIA will not permit reproduction outside of the limited license
for reproduction granted above, except upon written request and receipt of written permission from the AIA.
Rights to reproduce the document may vary for users of AIA software. Licensed AIA software users should consult
the End User License Agreement (EULA).
To report copyright violations of AIA Contract Documents, e-mail The American Institute of Architects legal
counsel, [email protected].
CHANGES FROM THE PREVIOUS EDITION
A1072007 revises the 1997 edition of A107 to parallel 2007 revisions made in the following AIA Documents:
A1012007, Standard Form of Agreement Between Owner and Contractor where the Basis of Payment is a Stipulated
Sum, A1022007, Standard Form of Agreement Between Owner and Contractor where the Basis of Payment is the
Cost of the Work Plus a Fee with a Guaranteed Maximum Price, A1032007, Standard Form of Agreement Between
Owner and Contractor where the Basis of Payment is the Cost of the Work Plus a Fee without a Guaranteed
Maximum Price, and A2012007, General Conditions of the Contract for Construction. It incorporates alterations
proposed by architects, contractors, owners and professional consultants. Some of the significant differences in
content between this edition and the 1997 edition of A107 are listed below.
Title. The title of this document is revised for brevity and to focus on its use for projects that do not rise to the level of
complexity that would require a more detailed agreement paired with A2012007, General Conditions of the Contract
for Construction.
Format. A table of articles is added and sections are re-ordered to correspond to the sequence of sections in other AIA
owner-contractor agreements, and in A2012007. Exhibit A supplements the base agreement by providing additional
2
information related to the Cost of the Work. Exhibit A is required only if the parties choose one of the cost-plus
payment methods.
Article 3. A checkbox is added where the parties may select the Contract Sum and the associated method of payment.
The Stipulated Sum now makes provision for allowance prices; the new Cost of the Work with a Guaranteed
Maximum Price may include unit prices, allowances, and alternates.
Article 4. Section 4.1.4 now includes a fill point where the parties may indicate whether retainage will be withheld,
and if so, under what terms.
Article 5. As in AIA Document A1071997, an initial decision is a condition precedent to mediation, and
mediation is a condition precedent to any binding form of dispute resolution. However, arbitration is not mandatory
under A1072007 so the parties must select the binding method of dispute resolution from three choices: arbitration,
litigation or another method that the parties must identify. New Section 5.1 provides a checkbox for selecting, or
stating, the method of binding dispute resolution to be followed for any dispute not settled through mediation.
Article 9. Section 9.7 adds an Allowances section which explains which costs may be included in them. Section 9.8,
adds a new requirement for the Contractor to submit a construction schedule.
Article 13. Section 13.2 adds provisions for the Contractor to obtain interim payments in the event the Owner and
Architect issue a Construction Change Directive.
Article 14. New provisions are added to address payment procedures that are unique to stipulated sum and guaranteed
maximum price contracts.
Article 15. New Section 15.4.2 requires the Contractor to prepare a punch list prior to Substantial Completion. New
text in Section 15.4.3 requires the Architect to conduct an inspection for the purposes of determining Substantial
Completion.
Article 17. The insurance provisions now require the Contractor to obtain general liability insurance for completed
operations and to include the Owner and Architect as addition insured during the Contractors operations, and the Owner
as an additional insured during completed operations. These changes reflect industry practices. New Section 17.4 permits
the Owner to require performance and payment bonds, and to stipulate their requirements in bidding documents.
Article 20. This article now permits the Owner to terminate the Contract for its convenience, and sets forth the
Owners financial duties to the Contractor in that event.
Article 21. This is a new article that consolidates claims and disputes procedures. Section 21.5 allows for
consolidation of arbitrations and joinder of parties in arbitrations, if the parties have selected arbitration as the method
of binding dispute resolution.
USING A1072007
Notices. Prospective bidders should be informed of any additional provisions which may be included in A1072007,
such as liquidated damages or payment for stored materials, by an appropriate notice in the Bidding Documents and
the Supplementary Conditions.
Modifications. Particularly with respect to professional or contractor licensing laws, building codes, taxes, monetary
and interest charges, arbitration, indemnification, format and font size, AIA Contract Documents may require
modification to comply with state or local laws. Users are encouraged to consult an attorney before completing or
modifying a document.
In a purchased paper AIA Contract Document, necessary modifications may be accomplished by writing or typing the
appropriate terms in the blank spaces provided on the document, or by attaching Supplementary Conditions, special
conditions or referenced amendments. Modifications directly to purchased paper AIA Contract Documents may also
be achieved by striking out language. However, care must be taken in making these kinds of deletions.
Under NO circumstances should standard language be struck out to render it illegible. For example, users should not
apply blocking tape, correction fluid or Xs that would completely obscure text. Such practices may raise suspicion of
fraudulent concealment, or suggest that the completed and signed document has been tampered with. Both parties
should initial handwritten changes.
Using AIA software, modifications to insert information and revise the standard AIA text may be made as the
software permits.
By reviewing properly made modifications to a standard AIA Contract Document, parties familiar with that document
can quickly understand the essence of the proposed relationship. Commercial exchanges are greatly simplified and
expedited, good faith dealing is encouraged, and otherwise latent clauses are exposed for scrutiny.
AIA Contract Documents may not be retyped or electronically scanned. Retyping can introduce typographic errors
and cloud legal interpretation given to a standard clause. Furthermore, retyping and electronic scanning are not
permitted under the users limited license for use of the document, constitute the creation of a derivative work and
violate the AIAs copyright.
Cover Page
Date. The date represents the date the Agreement becomes effective. It may be the date an original oral agreement
was reached, the date the Agreement was originally submitted to the Owner, the date authorizing action was taken or
the date of actual execution. It will be the date from which the Contract Time is measured unless a different date is
inserted under Section 2.1.
Parties. Parties to the Agreement should be identified using the full address and legal name under which the
Agreement is to be executed, including a designation of the legal status of both parties (sole proprietorship,
partnership, joint venture, unincorporated association, limited partnership or corporation [general, limited liability,
closed or professional], etc.). Where appropriate, a copy of the resolution authorizing the individual to act on behalf of
the firm or entity should be attached. Other information may be added, such as telephone numbers and electronic
addresses.
Project. The proposed Project should be described in sufficient detail to identify (1) the official name or title of the
facility; (2) the location of the site; and (3) a brief description of the Project, including the proposed building usage,
size, and capacity or scope of the Project.
Architect. The Architects full legal or corporate title should be used.
Article 2 Date of Commencement and Substantial Completion
The following items should be included as appropriate:
2.1 The date of commencement of the Work should be inserted if it is different from the date of the Agreement. It
should not be earlier than the date of execution (signing) of the Agreement. After the first sentence, enter either the
specific date of commencement of the Work, or if a notice to proceed is to be used, enter the sentence, The date of
commencement shall be stipulated by the notice to proceed. When time of performance is to be strictly enforced, the
statement of starting time should be carefully weighed.
2.3 The time within which Substantial Completion of the Work is to be achieved may be expressed as a number of
days (preferably calendar days) or as a specified date. If a specified date is used and the date of commencement is to
be given in a notice to proceed, these dates must be carefully coordinated to allow sufficient time for completion of
the Work.
Any requirements for earlier Substantial Completion of portions of the Work should be entered here if not specified
elsewhere in the Contract Documents.
Optionally, insert any provisions for liquidated damages relating to failure to complete on time, or for bonus payments
for early completion. Liquidated damages are not a penalty to be inflicted on the Contractor, but must bear an actual
and reasonably estimable relationship to the Owners loss if construction is not completed on time. There is little or no
legal precedent to support the proposition of linking a bonus with a penalty. If liquidated damages are to be assessed
because delayed construction will result in actual loss to the Owner, the amount of damages due for each day lost
should be entered in the Supplementary Conditions or the Agreement. Factors such as confidentiality or the need to
inform subcontractors about the amount of liquidated damages will help determine the placement of such language.
If a provision for liquidated damages is included, it should be carefully drafted by the Owners attorney. Such a
provision may be based on the following sample language:
The Contractor and the Contractors surety, if any, shall be liable for and shall pay the Owner the sums
hereinafter stipulated as liquidated damages for each calendar day of delay until the Work is substantially
complete: ________ ($__).
For further information on liquidated damages, penalties and bonus provisions, see AIA Document A5032007,
Guide for Supplementary Conditions, at www.aia.org.
Article 3 Contract Sum
3.1 Check the box next to the method used for determining the Contractor Sum (lump sum, percentage of Cost of the
Work with a Guaranteed Maximum Price, or percentage of Cost of the Work without a Guaranteed Maximum Price).
Based upon the selection, complete either Section 3.2, or 3.3, or 3.4.
3.2 Enter the Contract Sum payable to the Contractor if using a Stipulated Sum.
3.2.1 If using a Stipulated Sum, identify any alternates described in the Contract Documents and accepted by the
Owner. If decisions on alternates are to be made subsequent to execution of A1072007, attach a schedule showing
the amount of each alternate and the date it expires.
3.2.2 Identify unit prices, and state quantity limitations, if any, to which the unit price will be applicable.
3.2.3 Identify and state the amounts of any allowances.
3.3.2 Enter the method used for determining the Contractors Fee (lump sum, percentage of Cost of the Work or
other method) and explain how the Contractors Fee will be adjusted for changes in the Work.
3.4.2 Enter the method used for determining the Contractors Fee (lump sum, percentage of Cost of the Work or
other method) and explain how the Contractors Fee will be adjusted for changes in the Work.
3.4.3.1 Insert a Guaranteed Maximum Price for the Cost of the Work and the Contractors Fee. Insert specific
provisions if the Contractor is to participate in any savings when the final Contract Sum is below the Guaranteed
Maximum Price.
3.4.3.2 Identify any alternates described in the Contract Documents and accepted by the Owner. If decisions on
alternates are to be made subsequent to execution of A1072007, attach a schedule showing the amount of each
alternate and the date it expires.
3.4.3.3 Identify unit prices and state quantity limitations, if any, to which the unit price will be applicable.
3.4.3.4 Identify and state the amounts of any allowances.
Article 4 Payments
4.1.2 Insert the time period covered by each Application for Payment if it differs from the one given.
4.1.3 Insert the time schedule for presenting Applications for Payment, and indicate due dates for making progress
payments.
The last day upon which Work may be included in an Application should normally be no less than 14 days prior to the
payment date, in consideration of the seven days required for the Architects evaluation of an Application and
issuance of a Certificate for Payment and the time subsequently accorded the Owner to make payment. The Contractor
may prefer a few additional days to prepare the Application.
Due dates for payment should be acceptable to both the Owner and Contractor. They should allow sufficient time for
the Contractor to prepare an Application for Payment, for the Architect to certify payment, and for the Owner to make
payment.
4.1.4 Indicate the percent of retainage, if any, to be withheld when computing the amount of each progress payment.
The Owner frequently pays the Contractor the bulk of the earned sum when payments fall due, retaining a percentage
to ensure faithful performance. These percentages may vary with circumstances and localities. The AIA endorses the
practice of reducing retainage as rapidly as possible, consistent with the continued protection of all affected parties.
See AIA Document A5032007, Guide for Supplementary Conditions, for a complete discussion.
4.1.5 Enter any agreed-upon interest rate for overdue payments.
4.2.2 Insert the date by which Owner shall make final payment, if it differs from the one stated.
Article 5 Dispute Resolution
Select from three choices of binding dispute resolution: (1) arbitration, (2) litigation or (3) another method that the
parties must identify. Other types of dispute resolution include a dispute resolution board or a mini-trial. For
additional information about other methods of dispute resolution, refer to The Construction Industrys Guide to
Dispute Avoidance and Resolution, free online at www.adr.org.
Article 6 Enumeration of Contract Documents
A detailed enumeration of all Contract Documents must be made in this article.
Exhibit A Determination of the Cost of the Work
Exhibit A provides the definition for the Cost of the Work and a detailed listing of the costs to be reimbursed and
those costs not to be reimbursed. If the Contract Sum is a Stipulated Sum, in accordance with Section 3.2 of the
Agreement, Exhibit A is not applicable.
EXECUTING THE AGREEMENT
The persons executing AIA Document A1072007 should indicate the capacity in which they are acting (i.e., president,
secretary, partner, etc.) and the authority under which they are executing the Agreement. Where appropriate, a copy of
the resolution authorizing the individual to act on behalf of the firm or entity should be attached.

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Document A107 2007

Standard Form of Agreement Between Owner and Contractor for a Project

This document has important legal

and the Contractor:

for the following Project:

The Owner and Contractor agree as follows.

THE WORK OF THIS CONTRACT

DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION

ENUMERATION OF CONTRACT DOCUMENTS

CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS

CHANGES IN THE WORK

PAYMENTS AND COMPLETION

PROTECTION OF PERSONS AND PROPERTY

INSURANCE & BONDS

TERMINATION OF THE CONTRACT

CLAIMS AND DISPUTES

ARTICLE 1 THE WORK OF THIS CONTRACT

Portion of the Work

Substantial Completion Date

, subject to adjustments of this Contract Time as provided in the Contract Documents.

ARTICLE 3 CONTRACT SUM

Stipulated Sum, in accordance with Section 3.2 below

3.2.2 Unit prices, if any:

Units and Limitations

Price per Unit ($0.00)

3.2.3 Allowances included in the stipulated sum, if any:

3.3 COST OF THE WORK PLUS CONTRACTORS FEE

3.4.3 GUARANTEED MAXIMUM PRICE

3.4.3.3 Unit Prices, if any:

Units and Limitations

Price per Unit ($0.00)

3.4.3.4 Allowances included in the Guaranteed Maximum Price, if any:

3.4.3.5 Assumptions, if any, on which the Guaranteed Maximum Price is based:

4.2 FINAL PAYMENT

ARTICLE 5 DISPUTE RESOLUTION

Arbitration pursuant to Section 21.4 of this Agreement

Litigation in a court of competent jurisdiction

ARTICLE 6 ENUMERATION OF CONTRACT DOCUMENTS

6.1.3 The Specifications:

6.1.4 The Drawings:

6.1.5 The Addenda, if any:

ARTICLE 7 GENERAL PROVISIONS

7.2 THE CONTRACT

8.3 OWNERS RIGHT TO CARRY OUT THE WORK

ARTICLE 13 CHANGES IN THE WORK

ARTICLE 16 PROTECTION OF PERSONS AND PROPERTY

(Printed name and title)

(Printed name and title)

Document A107 2007 Exhibit A

Determination of the Cost of the Work

ARTICLE A.1 CONTROL ESTIMATE

Rate (unit of time)

A.2.3 SUBCONTRACT COSTS

Document A107 2007 Exhibit A

Determination of the Cost of the Work

ARTICLE A.1 CONTROL ESTIMATE

Rate (unit of time)

A.2.3 Subcontract Costs

ARTICLE A.4 DISCOUNTS, REBATES AND REFUNDS