The construction industry is too often fragmented, adversarial, litigious, and inefficient. The contract documents which govern the performance of stakeholders in the design and construction process are part of the problem. Thirty five leading construction associations, representing a diverse coalition of owners, contractors, sureties, and design professionals, joined together to develop a set of consensus standard contracts intended to have reasonable risk allocation for all parties. The result is ConsensusDOCS, which includes more than 90 contracts documents that address all project delivery methods, including the first standard Integrated Project Delivery (IPD) contract. Publication of ConsensusDOCS marks the first time that the entire construction industry was invited to join together to draft standard contracts.

Contracts ultimately written by one organization are often perceived as being biased towards that membership’s interests. The American Institute of Architects (“AIA”) has historically played the role of “decider” of industry standard contracts. However, many involved in the drafting of the ConsensusDOCS perceived the AIA contract documents as self-servingly biased towards architects as well as driven by revenue concerns. As a result, the memberships of the Associated General Contractors of America (AGC) and the American Subcontractor’s Association (ASA) both unanimously elected not to endorse the 2007 edition of the AIA documents based upon the substantive concerns that were left unaddressed.

Judging by the general state of affairs in construction contracts, the old ways may not serve the best interests of the industry. Fair risk allocation generally follows the principal that the party in the best position to control and mitigate risk should be allocated that risk. However, many view contracts as an opportunity to push risk away rather than manage it. Consequently, parties downstream in the contractual chain, who are often in the weakest position, bear an inordinate amount of the risk. The lack of consensus has led a fragmented industry to fragment in its use of contracts. Some markets report use of 54 different “standard” contracts. Moreover, even if a standard contract is used, it is often so modified that it loses the predictability that it was intended to provide.

ConsensusDOCS are intended to solve the Gordian Knot of perceived bias by giving all the stakeholders in the construction process an equal seat at the table. The “DOCS” in ConsensusDOCS stands for Designers, Owners, Contractors, Subcontractors, and Sureties. Upon reaching consensus, AGC and COAA merged their previous contract documents programs into ConsensusDOCS, thereby proactively providing cohesion and predictability in a fragmented industry. Some argue that the ConsensusDOCS are solely a re-branding effort of the old AGC contract documents. That conclusion is the result of a misunderstanding of the process which resulted in the publication of the ConsensusDOCS. In reality, the participating organizations built consensus from the foundation of both the previous AGC and the COAA contracts. In addition to creating entirely new and innovative contract documents, every document, article, and section was put on the drafting table and subjected to an intensive three-year process that explored fundamental, as well as intricate, details to craft contractual best practices for today’s industry and beyond.

ConsensusDOCS contracts stress collaboration and communication between the primary parties to control their destiny and resolve potential disputes before they become intractable. The owner is empowered to decide who should serve and be paid to be an “impartial” decision-maker or “arbitrator” in the mix from the inception of the contractual relationship. The architect may, or may not, be assigned this role.

Written by experienced construction professionals and attorneys, the contracts provide solutions drawn from multiple segments of the construction process. The ConsensusDOCS also address cutting-edge issues, such as electronic communications and Building Information Modeling (BIM). In addition, ConsensusDOCS includes an important new agreement—the “Tri-Party Collaborative Agreement” (ConsensusDOCS 300)—which was the first standard Integrated Project Delivery (IPD) document published. The Tri-Party IPD Agreement brings together three parties—Owner, Design Professional, and Constructor—to execute the same contract and create a core team to act on behalf of the project. Agreements of this type have been used in Australia for some time, where they are known as “alliancing” or “relational contracting.” The document allows the project’s core team, which may include key specialty contractors and consultants, to make consensus decisions based upon the best interests of the project. The Tri-Party IPD Agreement helps facilitate the use of BIM and incorporates LEAN construction techniques.

ConsensusDOCS contracts offer an alternative approach to single organization standard agreements based upon the fundamental belief that risk should be allocated fairly. If this is how you believe your contracts should be, you’ve got nothing to lose by giving ConsensusDOCS a look.