Virtual Workshop - June 29, 2025 Risk Management, Legal Structures and Contracts

Practice Management
1

I cannot reconcile questions 3 & 4 from Part 4B.

The question is:

  1. What next steps should be taken by the architects considering the higher construction estimate?

One of the two correct answers from question 3 is as follows:

c. Propose an additional fee for working with the new CM.
Correct. Both parties agree to appropriately adjust the architect’s services, schedule or compensation due to changes. The owner may also adjust their budget or design and
construction milestones.

The source that supports this correct answer from the AIA contract B101-2017 is:

1.2 The Owner and Architect may rely on the Initial Information. Both parties, however, recognize that the Initial Information may materially change and, in that event, the Owner and the Architect shall appropriately adjust the Architect’s services, schedule for the Architect’s services and the Architect’s compensation. The Owner shall adjust the Owner’s budget for the Cost of the Work and the Owner’s anticipated design and construction milestones, as necessary, to accommodate material changes in the Initial Information.

Question 4 say:

  1. According to B101, would the architect be entitled to additional compensation due to changes caused by the Construction Manager’s cost estimate?

The answer is:

The answer is not clearly defined in the B101. It could be argued that the architect is required to make changes to the design without additional fee, when costs exceed the owner’s budget.

The cost and constructability guidance provided by Southwest Green-Build were simply recommendations, which do not remove the responsibility of the Architect under the B101.

However, it could also be argued that the architect was operating under the assumption that Southwest Green-Build was providing accurate pricing information and that they would be selected to complete the project, as evidenced by their correspondence with the owner.

In this specific scenario, reasons for the change in costs are due to circumstances the architect could have not otherwise predicted and thus are outside of the Architect’s control. The fact that Southwest Green-Build was operating on a ‘handshake’ agreement not only put themselves at risk, it also created exposure for the architect as well.

None of this makes any sense to me. If the answer to question 3 is c. and article 1.2 supports the answer, which it does, then how can the answer to question 4 be true?

-Michelle

2

Hi @Citrillion, thanks for writing in! I see your confusion, as these two answers/explanations appear to contradict each other at face value.

Note that while our practice quizzes and exams simulate the ARE in terms of item types (i.e. multiple choice, check-all-that-apply, hotspot), the Virtual Workshops do not (i.e. you will not see open-ended questions like Part 4B, Question 4 on the ARE). The workshops are intended to dive deeper into the difficult topics of the ARE, encouraging critical thinking beyond information that you are already familiar with. We include open-ended questions like these so that you can gain a full understanding of the topic and spark further discussion with the coach and other attendees. There may not be concrete black/white answers in these cases, because we just want you to understand the principles behind what is being presented.

The answer to Question 3 makes sense, in that the architect could (and should) propose an additional fee for working with the new CM, as the higher construction cost estimate will likely impact services, schedule, or compensation that was already agreed upon. This does not mean that they will definitely receive additional compensation, but it is possible.

Question 4 asks if the architect is entitled to additional compensation due to these changes per B101, and they are not. As the answer explanation states, this is not clearly defined in the B101 and could be argued either way. This does not mean that the architect cannot propose an additional fee (as stated in Question 3), they are just not entitled to that additional fee.

Hope this helps!

Kiara Galicinao, AIA, NCARB
Product Coordinator
Black Spectacles

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3

@kiaragalicinao I see. That is a very fine point indeed. I, for one, would definitely argue for an additional fee and I would use article 1.2 of the B101 to support my argument.

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