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The AIA Contract: Friend, Foe or Just a Lot of Reading?

One attorney and owner of a custom integration firm examines the the construction contracts offered by the American Institute of Architects (AIA). If you are an integrator on the rise, you will one day be presented one of these to sign.

While it’s impossible to draft a contract with a provision to deal with every problem that might arise as a complex integration project moves forward (that is, at least one that could be carried without using a forklift), the construction contracts offered for sale by the American Institute of Architects (the AIA) come pretty close.

If you are an integrator on the rise, you will one day be presented one to sign. The AIA contract is your friend if you understand it, a potential foe if you don’t, and yes—it is a lot of reading. But well thought-out contracts like these do a good job of preventing grief between contracting parties, and keeping business friendships intact.

But there are challenges in utilizing AIA contracts. First, there are those pesky legal terms and Byzantine clauses inherent in every sophisticated contract. The second is the AIA contact process itself: there is a separate contract required for each step in the construction process.

To be a player in the AIA world of big-time construction, you need to get a handle on these documents, because they are the standard of the industry.

Related: Avoid Getting Your Mother or Your Business Sued

The most typical situation in which an integrator would be asked to sign on to a project is when an integrator works directly for a property owner (versus subcontracting under a general contractor.) The AIA contracts applicable to that situation would be the “Interiors Family of Documents that Address Procurement and Installation of Furniture, Furnishings and Equipment.” (For the sake of brevity, let’s call it “The Family.” Fugetaboutit!).

A family, of course, consists of more than one member, and this family is no different. If you’re serious about growing your business, it’s time you became familiar with each of the documents in The Family. Do it now, because trying to understand them under the deadline pressure of submitting a bid, or winning one, is about as wise as learning a new programming language after you committed to take on a project requiring its use. A synopsis of each of these documents in The Family is available on the AIA’s website.

A project begins with a property owner (often guided by an architect) seeking bids. This owner will furnish bidders with AIA Form A751–2007, known as the “Invitation and Instructions for Quotation for Furniture, Furnishings and Equipment.” Based on responses by integrators to AIA A751-2007, the property owner will choose a winning bidder. The winner will be asked to sign AIA Form A151–2007 known as the “Standard Form of Agreement Between Owner and Vendor for Furniture, Furnishings and Equipment” (known as “SFABOVFFE,” to its friends.)

AIA A151–2007 is a “general agreement.” That is, specific terms and conditions are missing in this document. It only details information like the names of the parties to the agreement, and the price to be paid to the winning bidder. It is AIA Form A251-2007 that will provide the specific conditions of the contract: the terms and clauses.

Let’s change the scenario, and consider you are not going to work directly for the property owner, but instead you are the winning bidder being hired by a general contractor on the project. In that case, the AIA document you will be presented to sign will be AIA Form A401–2007, “Standard Form of Agreement Between Contractor and Subcontractor.”

The AIA A401–2007, my friends, is a 40-page monster—the Godzilla of standard form construction contracts. Forty pages of conditions, remedies, legal terms and clauses. But again, the idea is that the more detailed the contract, the greater understanding and predictability among the parties as a project goes forward. There is no doubt AIA A401–2007 is dense. But so is the integrator that signs one without understanding it.

Pesky Terms and Byzantine Clauses

So just what do those pesky legal terms and Byzantine clauses mean in plain English? (What does Byzantine mean in plain English?)

While the AIA prides itself that its contracts are written in as plain language as possible, there is a lot of language in the agreement that is as difficult to understand as anything I usually say after two martinis.