The AIA’s Sustainable Projects Exhibit: E204-2017

The American Institute of Architects (AIA) simplified the process of targeting project-specific “Sustainable Objectives” by releasing its Sustainable Projects Exhibit, E204-2017, in its 2017 Contract Document rollout. The E204 exhibit is compatible with Owner-Architect Agreements (like B101-2017), Owner-Contractor Agreements (like A101-2017), and other contract forms. Many newer AIA forms require the Owner and Architect to complete the E204-2017 contract exhibit, and to incorporate it into all project contracts related to the Sustainable Objective. While Owners can delete this requirement, the E204-2017 form provides a good roadmap for Owners, Architects, Contractors, and others who work on projects that target Sustainable Objectives to follow.

What Is A Sustainable Objective?

A “Sustainable Objective” is any design, construction, or operations practice intended to achieve a Sustainability Certification or other environmental benefit, or to enhance the health and well-being of building occupants, or to improve the building’s energy efficiency. A wide variety of “green” measures comprise the “Sustainable Objective” concept. Examples include:

  • Rating system metrics, like LEED (Leadership in Energy and Environmental Design), Green Globes, Energy Star, or other rating systems.
  • Performance-based metrics, such as reduced building energy or water usage, or increase use of recycled or sustainable building materials.
  • Government initiatives, such as “green” building code provisions.

The standard E204-2017 contract form intentionally does not define the term “Sustainable.” This provides flexibility to its users. Each project can target its own desired sustainable goals.

Who Benefits from E204-2017?

All project participants involved in targeting the Sustainable Objective benefit from the E204-2017. Many contract clauses around pursuing “green” objectives merely seek to allocate, and often shed, liability exposure for any failure to meet the goal. By contrast, the E204-2017 exhibit sets forth a useful process for the project participants to follow in pursuit of the Sustainable Objective. Owners benefit from an increased chance of actually achieving the Sustainable Objective, plus an earlier and more accurate understanding of the required process and costs. Architects and Contractors benefit from a clearer process to target Sustainable Objectives, better ability to define roles and responsibilities, and a clearer picture of the related fees, costs, and effort required.

The Innovation: A Single Contract Exhibit

The concepts in the E204-2017 are not new. They follow AIA Document D503-2011, the Guide for Sustainable Projects, and the (little-used) series of complete “Sustainable Project” Contract Documents the AIA issued in 2013. The 2017 innovation is placing these Sustainable Project concepts into a single contract exhibit that can be attached to numerous project contracts, i.e., the contracts of all the project participants responsible for seeking the Sustainable Objective. The AIA small project contract first tried this “single contract exhibit” approach, successfully, in its 2014 Design-Build agreements. The most recent AIA Contract Documents now presume that the E204-2017 contract exhibit, which is not controversial, will be used on any project that targets a Sustainable Objective.

The Process Starts with Owner and Architect

Any Sustainable Objective for the project is identified in the Owner-Architect Agreement. The Owner and Architect then agree to incorporate the E204-2017 Sustainable Project Exhibit in the relevant downstream contracts. The AIA’s Owner-Architect Contractor-Subcontractor Agreement, B101-2017, provides:

  • § If the Owner identifies a Sustainable Objective, the Owner and Architect shall complete and incorporate AIA Document E204–2017, Sustainable Projects Exhibit, into this Agreement to define the terms, conditions and services related to the Owner’s Sustainable Objective. If E204–2017 is incorporated into this agreement, the Owner and Architect shall incorporate the completed E204–2017 into the agreements with the consultants and Contractors performing services or Work in any way associated with the Sustainable Objective (emphasis added).

Thus, the drafters of Owner-Architect Agreements must be aware of the E204-2017 contract form. 

The Architect’s Major Role

Under the E204-2017 contract form, the Architect is expected to take a leading role in guiding the project participants toward achieving the Sustainable Objective. For example, the Architect must lead a “Sustainability Workshop” with the Owner, as soon as practicable, to identify the “Sustainable Measures” necessary to achieve the Sustainable Objective. Following completion of that Sustainability Workshop, the E204-2017 requires the Architect to prepare a “Sustainability Plan” for the Owner’s approval. Specifically, the E204 contract exhibit provides:

  • §2.3 Sustainability Workshop As soon as practicable, but not later than the conclusion of the Schematic Design Phase Services, the Architect shall conduct a Sustainability Workshop with the Owner, the Owner’s consultants, and the Architect’s consultants, during which the participants will: review and discuss potential Sustainability Certifications; establish the Sustainable Objective; discuss potential Sustainable Measures to be targeted; examine strategies for implementation of the Sustainable Measures; and discuss the potential impact of the Sustainable Measures on the Project schedule and the Owner’s program, and the Owner’s budget for the Cost of Work (emphasis added).
  • §2.4 Sustainability Plan Services
  • §2.4.1 Following the Sustainability Workshop, the Architect shall prepare a Sustainability Plan based on the Sustainable Objective and targeted Sustainable Measures (emphasis added).

Since the E204-2017 form calls for substantial effort from the Architect, designers should not only be aware of the form, but also consider its requirements when calculating their fees.

Sustainability Plans

No two Sustainability Plans will be alike. However, they should generally identify: (1) the project’s Sustainable Measures, which could be a dozen or more; (2) the point or credit requirements established by the Certifying Authority that must be met to achieve the Sustainable Objective; (3) the party primarily responsible for each Sustainable Measure, and which other parties are expected to provide support for that Sustainable Measure; and (4) a description of Sustainable Measures, including implementation strategies and design reviews, testing, or metrics to verify its achievement; and (5) the required “Sustainability Documentation” that should be created throughout the process.

Contractually Binding Others

The E204-2017 contract exhibit and the Sustainability Plan are both Contract Documents. They define the roles, responsibilities, and requirements of the Owner, Architect, Contractor, and others. Both documents are incorporated into the Owner-Contractor Agreement, and the contracts of all other project participants who may play a role in seeking the Sustainable Objective. Incorporating the E204-2017 exhibits into those contracts is the contractual “hook” that binds the project participants to follow the plan set out in the project-specific E204-2017 contract exhibit.

Key Definitions

Understanding these definitions is key to understanding the E204-2017 contract exhibit.

  • §1.2.1 Sustainable Objective. The Sustainable Objective is the Owner’s goal of incorporating Sustainable Measures into the design, construction, maintenance and operations of the Project to achieve a Sustainability Certification or other benefit to the environment, to enhance the health and well-being of building occupants, or to improve energy efficiency. The Sustainable Objective is identified in the Sustainability Plan.
  • §1.2.2 Sustainable Measure. A Sustainable Measure is a specific design or construction element, or post occupancy use, operation, maintenance or monitoring requirement that must be completed in order to achieve the Sustainable Objective. The Owner, Architect and Contractor shall each have responsibility for the Sustainable Measure(s) allocated to them in the Sustainability Plan.
  • §1.2.3 Sustainability Plan. The Sustainability Plan is a Contract Document that identifies and describes: the Sustainable Objective; the targeted Sustainable Measures; implementation strategies selected to achieve the Sustainable Measures; the Owner’s, Architect’s and Contractor’s roles and responsibilities associated with achieving the Sustainable Measures; the specific details about design reviews, testing or metrics to verify achievement of each Sustainable Measure; and the Sustainability Documentation required for the Project.
  • §1.2.4 Sustainability Certification. The Sustainability Certification is the initial third-party certification of sustainable design, construction, or environmental or energy performance, such as LEED, Green Globes, Energy Star or another rating or certification system, that may be designated as the Sustainable Objective or part of the Sustainable Objective for the Project. The term Sustainability Certification shall not apply to any recertification or certification occurring subsequent to the initial certification.
  • §1.2.5 Sustainability Documentation. The Sustainability Documentation includes all documentation related to the Sustainable Objective or to a specific Sustainable Measure that the Owner, Architect or Contractor is required to prepare in accordance with the Contract Documents. Responsibility for preparation of specific portions of the Sustainability Documentation will be allocated among the Owner, Architect and Contractor in the Sustainability Plan and may include documentation required by the Certifying Authority.
  • §1.2.6 Certifying Authority. The Certifying Authority is the entity that establishes criteria for achievement of a Sustainability Certification and is authorized to grant or deny a Sustainability Certification.

Like every other contract term, these definitions can be modified to suit the specific needs of particular projects. The requirement to use the E204-2017 contract form, itself, can be deleted.

Scope of Architect’s Sustainability Services

Under the standard E204-2017 contract form, Architects must perform a variety of task, including: (1) conducting a Sustainability Workshop; (2) preparing a Sustainability Plan for Owner approval; (3) incorporating the E204-2017 contract form into their relevant subconsultant agreements; (4) supplying the Sustainability Services that the project-specific E204-2017 form requires of Architect; (5) designing the project in accordance with the Sustainable Measures set out in the Sustainability Plan; (6) performing site observations during construction of work; and (7) registering the project with, and submitting an application to, the Certifying Authority, if applicable to the Sustainable Objective.

Scope of Contractor’s Sustainability Work

For the Contractors’ part, the E204-2017 contract form requires them to (1) incorporate E204-2017 into their relevant subcontracts; (2) perform the Sustainable Measures required of the Contractor; (3) consider alternatives with Owner and Architect if obstacles arise; (4) consider the possible effect of substitutions on Sustainability Plan; (5) prepare the Sustainability Documentation required of Contractor; and (6) prepare construction waste management program for approval by others.

The Owner’s Obligations

Under the E204-2017 contract exhibit, Owners must (1) select the Sustainable Objective; (2) approve the Architect’s Sustainability Plan; (3) incorporate E204-2017 and the Sustainability Plan into its relevant project agreements; (4) perform the Sustainable Measures required of Owner in the E204-2017 and Sustainability Plan; (5) comply with Certifying Authority’s requirements in operation and maintenance of the building, if applicable; (6) prepare, file, and prosecute any appeals to the Certifying Authority, if applicable; and (7) provide the services of commissioning agent, if applicable.

The Take-Away

AIA Contract Document E204-2017 simplifies the process of entering into project-specific contracts where the Owner desires to pursue a Sustainable Objective. The E204 is a single contract exhibit that can be attached to many contracts, and permeate the entire project. It is good for Owners, Architects, Contractors, and others who target Sustainable Objectives. Since the AIA’s substantial project recently released contract forms presume that the E204-2017 will be used on any project that targets a Sustainable Objective, those parties should familiarize themselves with the E204-2017 contract exhibit and its requirements.

E204-2017 provides a good roadmap for Owners, Architects, Contractors, and others who work on projects that target Sustainable Objectives.

E204-2017 provides a good roadmap for Owners, Architects, Contractors, and others who work on projects that target Sustainable Objectives.

This was prepared for the general information of Illinois-based friends of Baker Law Group LLC. It is not legal advice for you, or legal advice regarding any specific matter. Jeremy S. Baker is licensed to practice law only in Illinois. Under rules applicable to the professional conduct of attorneys in various jurisdictions, it may be considered attorney advertising material. Prior results do not guarantee a similar outcome.

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Jeremy S. Baker is an experienced Chicago-based attorney who provides transactional, dispute resolution, and general counsel services to the design and construction industry. He uses creative project structuring and intelligent contracts, plus dispute avoidance and early cost-efficient claim resolution techniques, to help his clients complete challenging projects.

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