Section 4.8 of A401 gives the subcontractor the explicit right to leave the employment if the GC does not pay the subcontract within one week of the date of the contract. The agreement gives them this right “without prejudice to other available remedies”, which means that the subcontractor is not required to find an alternative solution before carrying out his work. The withholding, also called retention, is usually between 5 and 10% of the contract price. It can be difficult for subcontractors to collect months or even years after the end of the project. Since profit margins in the construction sector are on average less than 4%, a delay in the recovery of withholdings can have a serious impact on a subcontractor`s cash flow and viability. Since AIA documents bind the subcontractor to the terms of the master ownership agreements, the subcontractor clearly needs access to those documents. The AIA establishes a large number of contracts that may apply in this scenario depending on the nature of the project. Two of the most common are the A101 Owner-Contractor Agreement (for a lump sum project) and the A201 (general conditions of the construction contract). Subcontractors should read and understand all AIA contract documents related to their project.
Whether or not you use AIA contract documents, always consult a lawyer before signing an agreement. It is especially useful to find a construction specialist. They will know what to expect. B503-2007 (formerly B511-2001), Guide to Changes to AIA-Owners-Architects Agreements Here are some of the most common disadvantages of AIA contracts for subcontractors: Subcontractors will likely have to pay for the payment documents required by the contract. This may include payment requests, add-on cards, and change orders. If you buy individual documents, they start at $10 each. If a subcontractor files payment requests over several months or years, these fees can add up quickly. If it is a matter of being paid, few documents will be more important to the subcontractor than their contract with the GC or the main contractor. The contract generally states that Section 15 of the A401 allows additional documents that modify or supplement the terms of the contract. If your company has standard terms or a language that you prefer to use for your projects, you can save them here as an exhibition. . .