IPD Contracts: Ready for Prime Time?

It may seem unusual to find lawyers agreeing with each other, but there seems to be unanimity on one important issue: Before architects embark on integrated-project-delivery (IPD) projects, they should have their contracts closely scrutinized by legal and insurance professionals. IPD proponents believe collaboration instead of competition within the design/construction team results in better, faster, less-expensive projects. But risk-averse, adversarial relationships are so habitual in the U.S. construction industry that legal structures, insurance policies, and much else needs to change to accommodate these new ideas. Recently, the AIA and ConsensusDOCS LLC have come out with model contracts to support IPD’s collaborative relationships. The first of the three AIA document families (A195, B195, and A295) is dubbed “transitional”: It maintains conventional relationships between owner, architect, and contractor, but supports information sharing and collaboration.

Another, C195, establishes a single-purpose entity (SPE), a limited-liability company formed by representatives of the three parties. Members of the SPE waive liability claims against one another and share risks and rewards [see “Practice Matters,” RECORD, July 2008]. A third AIA alternative is a multiparty agreement, C191. Owner, architect, and contractor sign the same agreement but do not form an SPE. ConsensusDOCS 300 is a three-party agreement most similar to the AIA’s C191. Underlying all these contracts is an assumption that the team may use building information modeling (BIM) to support the collaboration; however, the use of BIM does not in itself constitute IPD.