Future Of Construction Contracts

February 13, 2008
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A group of 20 construction associations representing designers, owners, contractors, subcontractors and sureties has launched ConsensusDOCS, with more than 70 collaboratively drafted construction contracts. The new standards are being introduced in West Michigan by the local chapters of the American Subcontractors Association and Associated Builders & Contractors.

Previously there were a variety of construction associations that produced standard form construction contracts. However, standard contracts published by one association are perceived as ultimately favoring that association's membership. There is also a growing industry frustration that heavily modified standard form documents hardly resemble the original text. Sometimes "modifications" are actually longer than the unrecognizable standard form.

ConsensusDOCS is the new choice in contract documents, because all the parties were invited to the drafting table and had a full vote in deciding final contract terms. The ConsensusDOCS drafting process is similar to negotiations for a specific project contract. The drafting mantra was to represent the best interests of the project, rather than a singular party. Consequently, the contracts focus on yielding better project results and fewer disputes. It is anticipated the diverse buy-in amongst all parties will literally transform the industry.

“The release of ConsensusDOCS is one of the most significant industry developments in the last 20 years,” said Stephen E. Sandherr, chief executive officer of the Associated General Contractors of America (AGC).

The documents help parties focus on better project results, rather than negotiating risk-shifting contract terms, or worse, contract claims in court, to assess fault.

“The best practices of the 2007 ConsensusDOCS establish a new 'gold standard' for defining contractual relationships in design and construction projects,” said E. Colette Nelson, executive vice president of the American Subcontractors Association Inc. “These documents encourage practices that are in the best interest of all parties to a project rather than merely reflecting existing unfair business practices and industry trends.”

There are more than 70 documents that address all project delivery methods, from design-bid-build through a new innovative collaborative agreement. These contracts and forms help address emerging issues such as electronic communications and building information modeling. For more information go to www.consensusdocs.org. CQX

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