AECO_Contracts_and_Proposals/IDP/IPD Letter of agreement.md

### **Integrated Letter of Agreement**
Parties to the contract:

|**Client**<br>|**General Contractor**|**Architectural Services**|
|---|---|---|
|Company<br>Address<br>Address|Company<br>Address<br>Address|Boiled Architecture (BA)<br>225 Naylor Street<br>San Francisco, CA 94112|

|**Other**|**Other**|**Other**|
|---|---|---|
|Company<br>Address<br>Address|Company<br>Address<br>Address|Company<br>Address<br>Address|


Date of original execution: 11-30.2015

#### **Agreement**

This Agreement between [ENTER COMPANY NAMES] is for Architectural and General Contracting [ENTER OTHER SERVICES IF ANY] services related to The Project, as defined in this Agreement.

This Agreement supersedes all prior communications, representations, or agreements, whether oral or written, relating the subject matter of this Agreement.

#### **The Project**

The Project consists of [ENTER BRIEF PROJECT DESCRIPTION HERE].  The basis for this contract is the complete project description shown in Appendix A.

The Project is being executed under an Integrated Project Delivery model, where Owner, Architect, and General Contractor ENTER OTHERS IF ANY] are under contract to each other.

#### **Scope of Services**

This Agreement establishes a relationship among the parties to jointly share project management responsibilities to realize The Project.  These parties are jointly called the Project Management Team (PMT).  Each of the parties agrees to the following respective responsibilities:

##### **The Owner** will provide the following:

- Provide the PMT with clear and complete information regarding Project goals and restrictions.  These are to be incorporated as Appendix A.
- Provide the PMT with timely decisions necessary to support the Project.
- Make timely payments as required by this Agreement.

##### **The Architect** will provide the following:

- Pre-Design Services
	- On-site 3d laser scanning and measurements to create existing conditions drawings
	- Code Analysis to calculate plumbing fixtures for new toilet room

- Design & Permit Documents
	- Design toilet room per code analysis
	- Produce Construction Documents
	- Coordinate consultant Construction Documents.
	- Obtain building permit for the city and respond to plan check comments, if any
	- Mechanical, Electrical, Plumbing and Structural Engineering services (via consultants)

- Construction Phase Services
	- Assistance and coordination during construction
	- Substantial completion inspection

##### **The General Contractor** will provide the following, in a manner that adheres to the General Conditions requirements as described in Appendix C:

- Pre-Construction Services
	- Assist the PMT during design by providing cost, schedule, and constructability information on an ongoing basis to support Target Value Design.
	- Retain design/build subcontractors to fulfill mechanical, electrical, plumbing, and fire protection services.
	- Retain subcontractors to build the scope of work expressed in the construction documents for any work that is not self-performed.
	- Coordinate information between design/build subcontractors and PMT.

- Construction Phase Services
	- Coordinate and oversee all subcontractors during construction to achieve The Project in accordance with the approved construction documents, taking responsibility for their activities as if these subcontractors were directly employed by the General Contractor.
		- If site conditions are found to differ from those noted on the approved construction documents, or other errors or omissions in the documents are discovered, the GC will notify the PMT and jointly solve the problem before proceeding with construction.
	- Obtain necessary inspections.
	- Request a Substantial Completion inspection from the PMT when the GC believes the Work is substantially complete enough to be occupied for its intended purpose.
	- Ensure project site safety during construction.



#### **Shared Risk & Reward - Shared Incentive Pool**

This project's Target Value is $XX,XXX.  Target Value is defined as the total cost of construction and design, but not counting the portion of the fees that has been set aside as an incentive layer.

If project costs escalate beyond the Target Value, except for reasons outlined in the section called _Changes To The Target Value,_ the extra costs will come out of the Shared Incentive Pool and split proportionally by the parties to this contract--regardless of where the fault lies.

If project costs finish below the Target Value, the savings will be added to the Shared Incentive Pool and split proportionally by the parties to this contract--regardless of who holds the most responsibility for the savings.

The Shared Incentive Pool is a fund of money that all PMT parties contribute to.

- Owner: 50% of the Shared Incentive Pool = $XXXX, representing the Owner's typical design & construction contingency.
- Architect: XX% of the Shared Incentive Pool = $XXX, representing 1/2 of the Architect's typical profit.
- General Contractor: XX% of the Shared Incentive Pool = $XXXXX, representing 1/2 of the General Contractor's typical profit.

#### **Changes to the Target Value**

Because of the unique nature of an integrated project, the General Contractor (and by extension subcontractors in contract to the General Contractor) is prohibited from asking for increases to the Target Value (generally known as "change orders") that arise from errors or omissions in the construction documents.  This is to encourage the General Contractor to give realistic early pricing, fully participate in the Target Value Design process, and to take responsibility for jointly managing the design development process as part of the PMT.

The Architect similarly cannot request additional services fees related to value engineering efforts if the design is found not to align with the Target Value.  This is to encourage the Architect to fully participate in the Target Value Design process, working closely with the builders.

An increase to the Target Value is only allowed in these circumstances:

- Owner chooses to increase scope
- Unforeseen site conditions require an increase in scope
- Force Majeure (act of God) occurs which increases project costs
- Changes in regulatory agency requirements require an increase in scope

In such cases the PMT will change the Target Value through consensus.  All changes to the Target Cost are to be incorporated into this contract through Appendix B.

In cases where extra costs are incurred by the team, such as if design takes more time than originally anticipated or if a construction process occurs in error and re-work is necessary, these extra costs must come out of the Shared Incentive Pool, unless the parties agree by consensus that the cause of such extra costs justifies an increase to the Target Value as outlined above.  This is designed to encourage the team to find creative solutions to avoid or mitigate these types of cost escalations through innovative team work.



#### **Base Architect Compensation (hourly not to exceed)**

The following fees are not placed "at risk," and are considered the base Architect fee.


|Category|Fees|
|---|---|
|Pre-Design Services:|$XXX/hr up to $XXXXX|
|Construction documents & permit application:|$XXX/hr up to $XXXXX|
|Construction phase services:|$XXX/hr up to $XXXXX|


#### **Base General Contractor Compensation (Direct costs + 10% markup up to Guaranteed Maximum Price)**

The following fees are not placed "at risk," and are considered the base General Contractor fee.

|Category|Fees|
|---|---|
|Pre-construction Services:|$XXX,XXX|
|Construction:|$XX,XXX|


#### **Reimbursable Expenses**

Reimbursable project expenses, as listed below, are billed to the Client separately from the team's Base Fees and Shared Incentive Pool.

- Mileage charged to client at $0.56 per mile
- Public transportation charged to client at a rate of 1.0
- In-office printing costs charged to client at:
  - $0.10 for black & white 8.5x11
  - $0.12 for black & white 11x11
  - $0.25 for color 8.5x11
  - $0.30 for color 11x17
- Outside printing / copying costs charged to client at a rate of 1.1
- Agency permitting costs will be charged to client at a rate of 1.1

#### **Liability**

The parties to this Agreement waive claims and liability between and among each other except for these excluded situations:

- Willful breach of contract
- Warranty claims
- Project performance
- Non payment
- Failure to procure required insurance
- Failure to follow Dispute Resolution provisions of this Agreement.

#### **Dispute Resolution**

All claims, disputes, and other matters in question between the parties to this agreement, arising out of or relating to this Agreement or the breach thereof, shall be submitted to non-binding mediation under a mutually agreed upon mediator prior to initiation of any lawsuit or other litigation unless the parties mutually agree otherwise.

The cost of said mediation shall be split equally between the parties.

Mediation arising out of or relating to this agreement may include, by consolidation, jointer or in any voluntary manner, any additional person or persons. This agreement to mediate with any additional person or persons duly consented to be parties to this agreement, shall be specifically enforceable under the prevailing law of the jurisdiction in which this agreement was signed.

#### **Acceptance**

By signing below, this Agreement shall be accepted by each party.  It is understood by all parties that client may terminate this contract at any time, for any cause or without cause. Client may choose to proceed with the project or not, at their convenience.  If the project is stopped Client agrees to pay Architect and General Contractor for services rendered to date, including their full profit markups.

<br>
<br>
<br>

**Client**
Signature　　　　　　　Representative’s name　　　　　　　　　Date

---
<br>
**Architect**
Signature　　　　　　　Representative’s name　　　　　　　　　Date

---

<br>
**General Contractor**
Signature　　　　　　　Representative’s name　　　　　　　　　Date

---