Revised Standard Cost-of-the-Work Agreement Adds to Recent ConsensusDocs Updates
ConsensusDocs is about to publish an updated standard ConsensusDocs 235 Owner/Constructor Standard Agreement. The ConsensusDocs 235 provides a short form standard prime contract. Construction work payment is based upon cost-of-the-work plus a fee. This type of “cost/plus” contract increased in popularity amid the post-pandemic breakout price uncertainty that led to price escalation and supply chain disruptions that were highlighted in this article. The ConsensusDocs 235 cost/plus agreement does not include a guaranteed maximum price (GMP) (as compared to the ConsensusDocs 230). The ConsensusDocs 235 is an alternative for project stakeholders who want greater collaboration and transparency by avoiding the potential hard edge of a GMP.
Some highlights of the revisions to the 235 include:
- Section 11.3. The requirement for “existing structures” in the Builder’s Risk policy requirements for property insurance was removed. This change acknowledges that obtaining existing structure insurance through a Builder’s Risk policy with reasonable deductibles may not be feasible.
- Subsection 11.3.10. Regarding the Constructor’s comprehensive general liability, instead of saying to the extent of the limits of the CGL Policy, it now reads “to the extent of proceeds paid.”
- Subsection 15.5.3. A reference to the statute of repose was added to time bar claims or causes heard in an arbitration. Some state caselaw has questioned if such time bars apply to arbitration. By addressing this explicitly in the contract, this confusion is avoided and makes it clear that the time bar should apply to arbitration as well as litigation.
- Definition of Days and Business Days. Days and Business days are now defined terms and capitalized terms throughout the document. This avoids potential confusion for timing requirements.
ConsensusDocs 235 is a short form standard agreement. Short forms are among the most popular ConsensusDocs forms selected from the catalog of over 110 ConsensusDocs standard form construction contracts. Short forms are written with “smaller” as well as medium-sized construction projects in mind. This article here, explains some of the differences between standard “long” and short-form agreements. Revisions made to the ConsensusDocs 235 were consistent with the ConsensusDocs 205 Agreement Between Owner and Constructor & General Conditions (short form prime agreement), which was highlighted in this article here. Additionally, revisions to the most used ConsensusDocs standard document, the ConsensusDocs 200 Owner and Constructor Agreement with General Conditions, have been highlighted here.
Comments or questions about this article can be directed to Brian Perlberg, Executive Director and Senior Counsel, ConsensusDocs Coalition, perlberg@ConsensusDocs.org.
NASBP-supported ConsensusDocs Webinar Highlighted Benefits and Challenges of Progressive Design-Build
If you missed the ConsensusDocs webinar held today at 12:00 p.m. ET and didn't register for it, you can access the recording. Simply register for the webinar, and AGC will send you the link to the Zoom recording.
This NASBP-supported webinar, Understanding the Benefits and Challenges of Progressive Design-Build (PDB), defined PDB, examined the opportunities and risks associated with it, and described how it differs from traditional design-build. The panelists identified the benefits and risks of PDB, as well as early lessons learned and possible contracting solutions. This webinar can help contractors decide if PDB helps address fair risk allocation, increases transparency, and reduces change orders and major budget busts.
As a current NASBP member, you receive $20 off on your registration rate using the code—fy24febnasbp—upon checkout, reducing the price to $79. Remember that ConsensusDocs subscribers can receive $50 off.
Don’t miss this opportunity to learn about this contracting project delivery method that is growing in usage, especially for bigger projects. Purchase recording.
For more information about NASBP’s active role as an endorsing member of ConsensusDocs, visit nasbp.org.
____________________________________________________________
For more information, visit consensusdocs.org.
For information about the ConsensusDocs bond forms, visit nasbp.org.
NASBP also provides the ConsensusDocs bond forms for download from learn.nasbp.org.
NASBP is an endorsing organization of the ConsensusDocs coalition, an unprecedented effort by 42 industry organizations to identify industry best practices and to incorporate such practices in a new generation of consensus industry standard form documents.