What Subcontract Changes Are Coming in ’07?
Kegler Brown Construction Newsletter May 1, 2007
In view of the proposed 2007 AIA revisions, including the revisions to the AIA A201 general conditions, which are incorporated by reference into the AIA A401, contractor and subcontractor groups are evaluating whether they want to continue to endorse the AIA A401 subcontract, which has been traditionally endorsed by ASA and ASC.
There is the possibility that both contractors and subcontractors concerned about the inclusion of “additional insured” will choose not to utilize the AIA A401 form any longer. Some contractors and subcontractors believe that an additional insured requirement in effect mandates a broad form of indemnity, which many believe is unfair because it shifts the risk and cost of another’s negligence upon a non-negligent party or their insurer.
A coalition group called the Construction Industry Contracts Council (CICC), consisting of subcontractor, general contractor, owner and surety associations, including ASA, ASC, AGC, COA, CURT and other industry groups, is drafting its own contract documents which may be available in 2007, together with the 2007 editions of the AIA documents.
The effect of these contract document changes on the industry remains to be seen.