If You’re Performing Preconstruction Services, Be Sure to Set Performance and Payment Expectations Before the Work Begins

{"version":"0.3.0","atoms":[],"cards":[],"markups":[["i"],["a",["href","https:\/\/www.aiacontracts.org\/contract-documents\/6431920-client-and-consultant-agreement-for-design-assist-services"]],["a",["href","https:\/\/www.aiacontracts.org\/resources\/6319312-delegated-design-design-assist-and-informal-involvement--what-does-it-all-mean"]],["strong"]],"sections":[[1,"p",[[0,[],0,"April 25, 2022"]]],[1,"p",[[0,[],0,"A contractor\u2019s or design professional\u2019s preconstruction\nservices can be used to determine project feasibility and maximize project\nvalue. These services can range from design assist, cost estimating, and scheduling\nto logistics planning, material selections, and value engineering. They are\nperformed before construction begins, with the goal of assisting clients to make\ninformed decisions in the early design and development stages of the project."]]],[1,"p",[[0,[],0,"When a contractor or design professional performs preconstruction\nservices, risk and liability undoubtedly exist. Often, these services are\nperformed without a clear understanding of the scope, anticipated fees, or\npayment structure. Sometimes, preconstruction services are even performed prior\nto signing off on an agreement. This can happen where owners, contractors,\nconstruction managers, and design professionals have pre-existing relationships\nand a positive work history. In these cases, those performing the work may believe\nthat they will be compensated for their services under the forthcoming\nagreement, despite the parties not having yet executed the contract or defined\nthe scope of services. For construction professionals performing\npreconstruction services, ensuring that any risk and liability, as well as payment\nterms, are agreed upon "],[0,[0],1,"prior to"],[0,[],0," performance can lead to an uninterrupted\ndesign process. "]]],[1,"p",[[0,[],0,"The AIA\u2019s new "],[0,[1],1,"C403\u2122\u20132021,\nClient and Consultant Agreement for Design Assist Services"],[0,[],0," may\nhelp contractors protect against issues that arise when performing preconstruction\nservices. Design Assist is a form of collaboration where a construction\nprofessional provides information to assist a design professional in the design\nof the project. This collaboration typically takes place before the work has\nbeen awarded, "],[0,[0],1,"i.e.,"],[0,[],0," during the preconstruction phase. The C403 defines\nDesign Assist services as \u201call services performed by the Consultant under this\nAgreement for the purpose of assisting the design professional of record in its\nobligation to develop the design for the Project.\u201d The agreement allows the\nparties to insert a description of the Design Assist services and it also sets\nforth the Client\u2019s responsibilities when Preconstruction Services are\nperformed. Within the C403, \u201cPreconstruction Submissions\u201d are defined as\n\u201cInstruments of Service . . . that the Client is obligated to submit \u2026 to\nassist with the design of the Project.\u201d As with most AIA Contracts, the Client\nis granted a limited, irrevocable, and nonexclusive license to use the\nConsultant\u2019s Instruments of Service. The license is granted to allow the Client\u2019s\n\u201cother consultants and other Project Participants to reproduce and . . . make\nchanges, corrections, or additions to the Instruments of Service for the\npurpose of preparing the Preconstruction Submissions and for purposes of\ndesigning, constructing, using, maintaining, altering, and adding to the\nProject, provided that the Client substantially performs its obligations under\nthis Agreement, including prompt payment of all sums due \u2026\u201d Therefore, under\nthe C403, payment must be properly made for the Client to use the Instruments\nof Service, and make use of the Design Assist services. "]]],[1,"p",[[0,[],0,"The C403 addresses necessary details of preconstruction\nDesign Assist services, including performance and payment terms. By addressing\nthese details upfront, both parties can act with transparency, and expectations\nover obligations and responsibilities are reasonably set before work is\nperformed. Clients can know how and when services will be performed during the\npreconstruction phase, and those performing Design Assist services can have a\ncomplete understanding of what is expected to properly perform, and when they\nwill receive payment."]]],[1,"p",[[0,[],0,"Although the standard language in AIA Contract\nDocuments provide a fair and balanced starting point, parties may modify the language\nto suit their specific needs. In this regard, they can consult the various\nguides and white papers published by the AIA. If you\u2019re interested in using the\nC403, see the AIA\u2019s and American Institute of Steel Construction\u2019s "],[0,[2],1,"White\npaper: Delegated Design, Design Assist, and Informal Involvement \u2013 what does it\nall mean?"]]],[1,"p",[[0,[0,3],2,"AIA Contract Documents has provided this\narticle for general informational purposes only. The information provided is\nnot legal opinion or legal advice and does not create an attorney-client\nrelationship of any kind. This article is also not intended to provide guidance\nas to how project parties should interpret their specific contracts or resolve\ncontract disputes, as those decisions will need to be made in consultation with\nlegal counsel, insurance counsel, and other professionals, and based upon a\nmultitude of factors. "]]]]}