A101: Price, Time, and Payment Terms

Read the owner–contractor agreement before administering it

A101–2017 establishes an owner–contractor agreement with a stipulated sum. A201 supplies incorporated general conditions, while A101 identifies the project-specific commercial terms. The architect may administer that construction contract through the professional-services agreement without being a signatory to the owner–contractor bargain. Start with the executed agreement, incorporated documents, completed blanks, exhibits, and modifications; a remembered summary of A201 cannot reveal a negotiated retainage percentage or completion date.

Identify the work and contract document basis

Verify the parties, project description, architect, drawing and specification issue dates, addenda, listed additional documents, and subsequent modifications. An estimate based on one drawing revision cannot be compared meaningfully with a contract incorporating another. Addenda issued before execution and modifications issued afterward have different positions in the record. Bid instructions and forms are not automatically contract documents unless incorporated as provided by the agreement.

For example, a contractor prices an alternate entrance canopy, but the owner executes an agreement incorporating only the base bid documents. The manager should determine whether the alternate was actually accepted and listed. A favorable conversation during procurement is not an adequate substitute for the executed scope. If the owner now wants the canopy, evaluate the appropriate construction change and related design services.

Read commencement and completion independently

A101 allows selection of commencement by the agreement date, an owner notice to proceed, or another agreed method; if no choice is made, the agreement date is the default. The substantial-completion obligation can be expressed as a date or number of calendar days. Coordinate those fields. If a fixed completion date is retained while notice to proceed is delayed, the contractor's available performance interval can change unless an adjustment is authorized.

Assume notice to proceed is June 1 and the agreement requires completion within 120 calendar days. Use the contract's counting convention and establish the baseline with the contractor. Do not replace calendar days with working days without authorization. If separate portions have earlier occupancy dates, track their distinct completion requirements, access, inspections, and certificates. Owner use of one portion does not automatically establish completion of every portion.

Liquidated damages, if agreed, should be read with the specified milestones and conditions. Their enforceability and relationship to delay claims depend on the actual clause and law. A study example can supply an agreed daily rate and delay duration for arithmetic, but the presence of a late date alone does not establish every legal prerequisite for assessment.

Distinguish price from cost

The stipulated sum is the contract price for the defined work, subject to authorized adjustments. It is not the same as the owner's total project budget, which can include land, fees, financing, owner equipment, and contingencies. It also differs from the contractor's internal cost. A contractor spending more than expected does not automatically increase a stipulated sum; determine whether the underlying cause supports an adjustment.

Record accepted alternates, allowances, unit prices, and any specific adjustment mechanism. An allowance is not unlimited spending authority. Determine whether the allowance includes installation, materials, taxes, overhead, and profit under the applicable terms. When actual selection differs from an allowance, reconcile the defined components rather than comparing unmatched figures.

Payment provisions are project-specific

Read the billing period, application date, payment due date, retainage, reduction or release conditions, and final-payment prerequisites. There is no universal AIA ten-percent retainage requirement. The architect evaluates applications according to the contract and its professional scope; certification is not a guarantee of every contractor expenditure or payment to subcontractors.

Suppose the agreement permits payment for $200,000 of completed work and $40,000 of eligible stored materials, with five-percent retainage on both and $150,000 previously certified. The current amount is (200,000 + 40,000) × .95 − 150,000 = $78,000, assuming no other withholding or adjustment. If the contract treats stored materials differently, the calculation changes. Confirm eligibility and avoid subtracting “previous payment” when the form actually asks for previous certificates; those may differ in a disputed payment situation.

Insurance, bonds, and resolution

A101–2017 uses Exhibit A for project-specific insurance and bonds together with relevant A201 provisions. Check responsibility, coverages, limits, deductibles, and required evidence before work begins. Builder's risk and professional liability cover different exposures; neither a certificate nor a bond makes every claim automatically recoverable.

Identify the initial decision maker and selected binding dispute method. Also read termination, suspension, and any negotiated termination fee. An architect should apply the agreed administration process rather than assuming it can unilaterally alter price, order all work stopped, or choose a new dispute forum.

A complete management check

Before recommending execution or administering a change, compare scope, price, dates, payment, risk provisions, and document versions as one coordinated package. If a revised completion date conflicts with the bid schedule, flag it before signature. If an owner's payment terms differ from a lender's funding assumptions, raise that discrepancy with the authorized owner representative. The manager's value lies in detecting inconsistent terms while a documented resolution remains possible, then maintaining a reliable construction-contract record throughout the project.

Reference: AIA A101 instructions.

Agreement review points