A201 Changes, Claims, Substantial Completion, and Termination

How AIA A201-2017 governs modifications to the work, dispute resolution through the claims process, the milestones of substantial and final completion, and the rights of parties to suspend or terminate the contract.

ARE · Practice Management

Overview

Every construction project changes. Site conditions shift, owners revise priorities, and unforeseen issues surface. AIA A201-2017 provides the framework for handling all of it: how the work gets modified, how disputes get resolved, when the project reaches key milestones, and how contracts end.

Article 7 establishes three distinct mechanisms for changing the work, each with different levels of authority. Change orders require full agreement among owner, contractor, and architect. Construction Change Directives let work proceed even when parties disagree on cost or time. Minor changes give the architect unilateral authority for small modifications that don't affect the contract sum or schedule.

Article 15 sets up a structured claims process with the Initial Decision Maker at its center. The architect typically fills this role as a Basic Service under B101. Articles 9 and 4 define substantial completion and final completion, the two milestones that trigger critical shifts in responsibility, insurance, warranty periods, and payment. Article 14 spells out termination rights for both the owner and the contractor, with significantly different consequences depending on whether termination is for cause or for convenience.

For the ARE, you need to distinguish between these mechanisms, know who holds authority at each step, and understand the financial and legal consequences that flow from each. The exam tests whether you can identify the correct contractual tool for a given situation and predict the consequences of choosing the wrong one.

Essential

AIA A201-2017 contains some of the most tested provisions on the PcM exam. Four interrelated systems govern what happens when a project deviates from plan, when parties disagree, when the work reaches completion, and when the relationship breaks down entirely. ## Three Ways to Change the Work Article 7 of A201 establishes three distinct mechanisms for modifying construction work. Each serves a different purpose, carries different authority requirements, and triggers different consequences. Change Orders (Section 7.2) require agreement among all three parties: owner, contractor, and architect. A change order is a written instrument that documents the agreed-upon change in the work, any adjustment to the contract sum, and any adjustment to the contract time. The architect prepares the change order, though supplementary conditions sometimes shift that responsibility to the contractor. The key point: nobody can be forced into a change order. All three signatures are required.

Professional

Consider a mid-size firm administering a $12 million educational facility. During construction, the owner requests adding a maker space that wasn't in the original program. The contractor submits a proposal for $340,000 and 45 additional days. The owner agrees to the scope and the cost but wants only 30 additional days. Because the parties can't agree on all three elements, a standard change order isn't available yet. The architect issues a Construction Change Directive to authorize the work to begin while the time dispute gets resolved. The contractor proceeds. Eventually the parties settle on 38 days and execute a change order to close out the CCD. This sequence plays out regularly. The critical risk management point: if the architect had tried to use a minor change (G710) for this scope addition, it would have been invalid because the modification affected both the contract sum and the contract time.

TLDR

Three change mechanisms: Change Orders (all three sign), Construction Change Directives (owner + architect only, contractor must comply), Minor Changes (architect alone, no cost/time impact allowed)
Change order form: G701. Minor changes form: G710. Substantial completion form: G704
Claims path: IDM decision (10 days) then mediation then arbitration or litigation. IDM decision is a condition precedent to mediation
Default IDM: Architect. Serving as IDM is a Basic Service under B101
Substantial completion: Owner can occupy. Triggers warranty period, insurance shift, and statute of repose clock
Final completion: All punch items done. Triggers final payment release
Owner terminates for cause: Persistent failure to perform, failure to pay subs, disregard of laws, substantial breach
Owner terminates for convenience: Pays for work done + termination costs + negotiated termination fee (not automatic overhead and profit under 2017 edition)
Contractor terminates: Work stopped 30+ days through no fault of contractor; 7 days written notice required
Minor change trap: Contractor must notify architect before performing if it believes cost/time will be affected, or waives adjustment right

ELI5

Think of a construction contract like an agreement to build a really big LEGO set. Everyone agreed on what to build and how much it costs. But things change. Sometimes the owner says, "Actually, can you add a balcony?" If everyone agrees on the extra work, the extra cost, and the extra time, they all sign a piece of paper called a change order. Three signatures: owner, contractor, architect. Done. But what if the owner wants the balcony and the contractor says, "Sure, but that'll cost $50,000 extra" and the owner says, "No way, $30,000 max"? They can't agree on price. The owner and architect can still tell the contractor to start building the balcony right now by issuing something called a Construction Change Directive. Only two signatures needed. The cost argument gets sorted out later.

AREPractice Management

A201 Changes, Claims, Substantial Completion, and Termination

2 min read232 words

A201 Changes, Claims, Substantial Completion, and Termination

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