The ConsensusDocs Coalition has published and released a new Joint Venture Agreement for a Design-Build Project. It is the first industry standard joint venture contract for firms combining to take the prime risk on a design-build project. On design-build projects there is usually a prime—a developer, a design-build entity, a contractor, or a design firm—serving as the contracting party with the project owner. Often, the prime is not authorized by law to perform professional services, but is allowed to offer professional services provided by a direct subcontractor who meets the state’s licensure requirements. The subcontract for the actual design does not distribute the design responsibility and risk to both the prime, which is contractually obligated to provide the services, and the subcontracted design firm. So many design firms are hesitant to take all the design risk while merely serving as a subcontractor isolated from the project owner.
ConsensusDocs saw a need for a standard contract that would allow constructors such as general contractors, architects, and engineers to create a prime joint venture relationship on a project using the design-build project delivery method. The new document helps parties address issues such as licensing and insurance requirements, as well as risk allocation issues between the parties. The agreement was drafted specifically to address the unique contracting relationship required for a design-build project, and provides teams comprising a variety of independent firms with a good contractual basis for delivering a design-build project.
For more information on the ConsensusDocs family of documents visit the ConsensusDocs website.
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