Service Agreement between Owner and Architect

ARCHITECT - OWNER AGREEMENT 

for Full Detailed Architectural and Engineering (DA&E) Design Services

(In Full DA&E Design Services i.e. the Architect brings in all of the Design Engineers as part of his Design Team. The Architect’s Fee is computed based on a percentage of the Project Construction Cost (PCC). The Fee percentage (%) shall also be based on the type of the Project. The ultimate determinant of the Architect’s Fee is the Final Project Construction Cost (FPCC), computed at the completion of the construction work.) 

THIS AGREEMENT, made and entered into this ___th day of Month, Year Two Thousand and _________ by and between ________________ with postal address at _______________________________________________, the party of the First Part, hereinafter called the OWNER, and _____________________________________with postal address at ___________________________, the party of the Second Part, herein called the ARCHITECT.

WITNESSETH,

That whereas the OWNER intends to build a ______________________ to be located at _________________________________________, hereinafter called the PROJECT. 

NOW, THEREFORE, The Owner and the Architect, for and in consideration of the foregoing promises and of the other covenants hereinafter named, agree as follows: 

ART. 1. SCOPE OF WORK

That the scope of work to be done by the Architect, as herein authorized by the Owner for the subject Project herein referred to, consists of professional services for the following: 

1.01 Site development planning (SDP) of the grounds of the building, including other concomitant structures within the Project site, as may be determined by the Owner. 

1.02 Basic (Regular) Detailed Architectural and Engineering (DA&E) Design of the Project to be located at ________________________________. 

ART. 2. ARCHITECTS BASIC SERVICES

The Architect's Basic (Regular) Services shall consist of the following:

2.01 Project Definition Phase 
This phase shall involve the definition of the requirements of the Project by the Owner. The Architect in turn shall inform the Owner of the technical requirements of the Project and the concomitant professional fees. In this phase, the Architect shall:
a. consult with the Owner to ascertain the conceptual framework and related requirements of the Project and confirm such requirements with the Owner;
b. gather relevant information and data leading to the definition of the requirements of the Project, including the scope of the Architect’s services;
c. review and refine the Owner’s space requirements and translate them into an architectural program; d. prepare an initial statement of probable construction cost.

2.02 Schematic Design Phase
This phase shall consist of the preparation of schematic design studies derived from the Project Definition Phase, leading to conceptual plans. The Architect shall:
a. evaluate the Owner’s program, schedule, budget, project site and proposes methods of Project deliveries;
b. prepare the initial line drawings representing design studies leading to a recommended solution, including a general description of the Project for approval by the Owner;
c. submit to the Owner a Statement of the Probable Project Construction Cost (SPPCC, reference Annex “A”) based on current cost parameters.

2.03 Design Development Phase
Based on approved schematics and conceptual plans, the Architect shall prepare:
a. the Design Development documents consisting of plans, elevations, sections and other drawings;
b. the outline specifications to fix and illustrate the size and character of the entire Project as to type of materials, type of structural, electrical, mechanical, sanitary, electronic and communications systems;
c. the diagrammatic layout of construction systems; and
d. an updated SPPCC for submission to the Owner.

2.04 Contract Document Phase
Based on the approved Design Development Documents, the Architect shall:
a. prepare the complete Contract Documents consisting of detailed designs and construction drawings, setting forth in detail the work required for the architectural, structural, electrical, plumbing/ sanitary, mechanical, electronic and communication works prepared by the Architect and by the other State-regulated building professionals involved;
b. prepare the Technical Specifications describing type and quality of materials, finish, manner of construction and the general conditions under which the Project is to be constructed;
c. submit to the Owner seven (7) sets of all construction drawings and Technical Specifications for purposes of obtaining a building permit;
d. update the SPPCC based on changes in scope,  requirements or market conditions; and e. assist the Owner in filing the required documents to secure approval of government authorities having jurisdiction over the design of the Project;

2.05 Bidding or Negotiation Phase
a. In this phase, the Architect shall:
i. prepare the Bid Documents such as forms for contract letting, documents for construction, forms for invitation and instruction to bidders, forms for bidders’ proposals, general/ specific conditions of contract, etc.;
ii. assist the Owner from the early stage of establishing a list of prospective General Contractors to the award of the Construction Contract;

b. For competitive bids/ procurements, the Architect shall:
i. furnish complete sets of the Bid Documents for purposes of bidding, in as many sets as may be required to conduct a successful bidding. The said documents are loaned to bidders at an amount sufficient to cover direct and indirect costs attendant to the preparation, packaging, reproduction and delivery of the said documents; the Bid Documents are the intellectual property of the Architect (Sec. 33 of R.A. No. 9266), and must be returned by all entities acquiring bid documents; a bond may be required to assure the return of the Bid Documents; the Architect retains the sole ownership and copyright to the said documents (Sec. 33 of R.A. No. 9266); as such, bidders must not reproduce nor use the documents for unauthorized purposes; the Owner must also not use the documents for any other purpose other than the Project for which the Owner and Architect signed a Service Agreement;
ii. help in organizing and conducting pre-bid conferences;
iii. respond to questions from bidders;
iv. assist the Owner in obtaining proposals from General Contractors, analyze bid results and prepare the abstract of bids, notice of award, notice to proceed and other/ related construction contracts; and

c. For negotiated contracts, the Architect shall perform similar functions as in item b. above but negotiates with one General Contractor instead of many bidders.

2.06 Construction Phase
In this phase, the Architect shall perform the following:
a. make decisions on all claims of the Owner and Contractors on all matters relating to the execution and progress of work or the interpretation of the Contract Documents;
b. prepare change/ variation orders (CVOs), gather and turn over to the Owner written guarantees required of the Contractor and Sub-Contractors;
c. make periodic visits to the Project site to familiarize himself with the general progress and quality of work and to ascertain that the work is proceeding in accordance with the Contract Documents; the Architect shall not be required to make exhaustive or continuous eight (8)-hour on-site supervision to check on the quality of the work involved and shall not be held responsible for the General Contractor's failure to carry out the construction work in accordance with the Contract Documents; during such project site visits and on the basis of the Architect’s observations, he shall report to the Client defects and deficiencies noted in the work of Contractors, and shall condemn work found failing to conform to the Contract Documents;
d. determine the amount owing and due to the Contractor and issue corresponding Certificates for Payment for such amounts based on his observation/s and the Contractor's Applications for Payment. These Certificates will constitute a certification to the Client that the work has progressed to the state indicated and that to the Architect’s best knowledge, the quality of work performed by the Contractor is in accordance with the Contract Documents; the Architect shall conduct the necessary inspection to determine the date of substantial and final completion and issue the final Certificate of Payment to the Contractor;
e. Should more extensive inspection or full-time (8-hour) construction supervision be required by the Client, a separate full-time supervisor shall be hired and agreed upon by the Owner and the Architect subject to the conditions provided in the 2010 SPP Document on Full -Time Supervision. When the Architect is requested by the Owner to do the full time supervision, his services and fees shall be covered separately in conformance with the applicable and appropriate 2010 SPP Document.

ART. 3     ARCHITECTS FEE AND MANNER OF PAYMENT
3.01      That the Owner agrees to pay the Architect for professional services, a fee of ______ Percent (0.0%) of the Final Project Construction Cost (FPCC), with other payments and reimbursements as hereinafter provided, the said percentage hereafter called the Basic Fee. For the initial computation of the Basic Fee for use in this Agreement however, the Statement of Probable Project Construction Cost/ SPPCC (reference Annex “A”) shall be used.
3.02     That payments to the Architect on account of the agreed Architect’s Fee shall be made by the Owner as follows:
a.     A minimum of Twenty Five Thousand Pesos (P25,000.00) upon signing of this Agreement as the mobilization component of the agreed Architect’s Fee.
b.     Upon the completion of the Schematic Design Services, but not more than 15 days after submission of the Schematic Design to the Owner, a sum equal to fifteen percent (15.0%) of the Basic Fee, computed upon a reasonable estimated construction cost of the Project, less the amount paid under a.
c.     Upon the completion of the Design Development Services, but not more than 15 days after submission of the Design Development Documents to the Owner, a sum sufficient to increase the total payments on the fee to forty percent (40.0%) of the Basic Fee computed upon the same estimated construction cost of the structure as in b.
d.     Upon the completion of the Contract Documents Services, but not more than 15 days after submission of the Contract Documents to the Owner, a sum sufficient to increase the total payments on the fee to ninety percent (90.0%) of the Basic Fee computed upon a reasonable estimated construction cost of the structure as in b.
e.     Within 15 days after the awards to the winning Constructor-bidder or bidders the payments to the Architect shall be adjusted so that it will amount to a sum equivalent to ninety percent (90.0%) of the Basic Fee, computed upon the lowest bona fide Bid or Bids or upon the winning Bid Price.
f.    Progress Billing on the remaining ten percent (10.0%) of the Architect’s Fee based on the original Statement of Probable Project Construction Cost (SPPCC);
g.     Upon completion of the work, the balance of the Architect’s fee computed on the Final Project Construction Cost (FPCC) of the Project shall be paid.
3.03    That the Owner agrees to make partial payments during each of the various stages of the Architect's work, upon request of the Architect, provided that such payments are within the framework of the manner of payments outlined above.

ART. 4     THE OWNER'S RESPONSIBILITIES
The Owner shall undertake the following acts:
a.    provide full information as to his requirements for the Project;
b.    when necessary, designate a representative authorized to act on his behalf;
c.    promptly examine and render decisions pertaining to documents submitted by the Architect to avoid unreasonable delay in the progress of the Architect’s work; the Owner shall issue orders to the General Contractor only through the Architect;
d.    furnish or direct the Architect to obtain at Owner expense, a certified survey of the site, giving, as may be required, topographical and/or relocation surveys covering grades and lines of streets, alleys, easements, encroachments and related information, boundaries, with dimensions and complete data pertaining to existing buildings, structures, trees, plants, water bodies, wells, excavations/ pits, etc. and other improvements and full information as to the available utility/ service lines both public and private; zoning compliances, clearances, deed/s of restrictions, encumbrances and annotations to titles, association guidelines and standards, and soil investigations/ tests, borings and test pits necessary for determining soil and sub-soil conditions;
e.    promptly pay for architectural and all other engineering and allied services required for the Project;
f.    pay for the design and consulting services on acoustic, communication, electronic, and other specialty systems which may be required for the Project;
g.    arrange and pay for such legal, auditing, insurance, counseling and other services as may be required for the Project;
h.    pay for all reimbursable expenses incurred in the project as called for in ART 5: “Other Conditions on Services” and all taxes including VAT (but not including income tax) that the Government may impose on the Architect as a result of the services rendered by the Architect for/ on the Project, whether the services were performed as a natural person i.e. an individual practitioner or as a juridical entity i.e. as a sole proprietorship, partnership or corporation; and
i.    if the Owner observes or otherwise becomes aware of anything that may impair the successful implementation of the Project, he must give prompt written notice to the Architect.

ART 5.     OTHER CONDITIONS ON SERVICES
5.01    Conditions for the Architect’s Fee
The Architect’s Fee is based on the Project Construction Cost. Where the Architect has to render additional services, additional compensation shall be required.
5.02     Other Services
Other services that may be needed in order to complete the Project such as services of acoustic and illumination engineers/ specialists, mural painters, sculptors, and other service providers are to be recommended by the Architect for the Owner’s approval. Costs for these services are to be paid for separately by the Owner and shall be subject to a coordination fee payable to the Architect.
5.03    Scale Models, 3D Models and Walk-Thru Presentations
Should a scale model, 3D models and/or walk-thru presentation of the Architect’s design be necessary, they are to be recommended by the Architect for the Owner’s approval. Costs for these services are to be paid for separately by the Owner and shall be subject to a coordination fee payable to the Architect.
5.04    Per Diem and Traveling Expenses
A per diem plus traveling and living expenses shall be chargeable to the Owner whenever the Architect or his duly authorized representative is required to perform services at a locality beyond fifty kilometers/ 50 km (air, straight line or radial distance) from his established office as it appears in the Architect’s letterhead.
5.05    Extra Sets of Contract Documents
The Owner shall pay the Architect for additional sets of Contract Documents.
5.06    Change/s Ordered by the Owner
If the Architect renders additional professional services due to changes ordered by the Owner after approval of the Architect’s outputs, the Owner shall pay the Architect for extra time, resources/ drafting, or other office expenses.
5.07    Work Suspended or Abandoned
If the work of the Architect is abandoned or suspended in whole or in part, the Owner shall pay the Architect for the services rendered corresponding to the amount due at the stage of suspension or abandonment of the work. The primary service of the Architect is the preparation of architectural plans/ designs, specifications and other building construction documents, in collaboration with other State-regulated professionals. These are sets of detailed instructions that shall serve as the basis for the General Contractor to implement the Project. Once the Architect has prepared all these documents, the Architect has completed the Detailed Design and Contract Documents Phase of his services, which is equivalent to Ninety percent (90%) of his work. When the Owner therefore fails to implement the plans and documents for construction as prepared by the Architect, the Architect is entitled to receive as compensation the sum corresponding to ninety percent (90%) of the Architect’s fee.
5.08    Different Periods of Construction
If portions of the building/s are erected at different periods of time, thus increasing the construction period and Architect’s burden of services, charges pertaining to services rendered during the Construction Phase shall be adjusted proportionately. When the suspension of construction exceeds a period of six (6) months, the fee for the remaining works shall be doubled.
5.09    Services of Specialist Consultants
If the Owner requires the services of specialist consultants, they shall be engaged with the consent of the Architect. The cost of their services shall be paid for separately by the Owner and shall not be deducted from the Architect’s fee.
5.10    Separate Services
Should the Owner require the Architect to design movable or fixed pieces of cabinets and other architectural interior (AI) elements, site development plan (SDP) components, urban design elements, and other items of similar nature, the Owner shall pay the Architect in addition to the Architect’s fee. The compensation shall be based on the Project Construction Cost as provided for under the 2010 SPP Document 203 and its applicable guidelines.
5.11    Fulltime Construction Supervision
Upon recommendation of the Architect and with the approval of the Owner, full-time construction supervisors as will be deemed necessary shall be engaged and paid by the Owner. If no Project/ Construction Manager is present, the full-time construction supervisor shall be under the technical control and supervision of the Architect and shall make periodic reports to the Owner and to the Architect regarding the progress and quality of the work done.
5.12    Estimates
Any SPPCC or any Cost Estimate submitted by the Architect can attain only a certain degree of accuracy. As the Architect has no control over the cost of labor and materials, or the many factors that go into competitive bidding, he does not assume any professional responsibility for such cost estimates, unless glaring errors or discrepancies are clearly evident.
5.13    Government Taxes and Services
The Architect’s Fee is a net amount. Any tax (exclusive of income tax) that the national and/or local government/s may impose on the Architect as a consequence of the services performed for the Project shall be paid by the Owner.
5.14    Ownership of Documents
All designs, drawings, models, specifications and other contract documents and copies thereof, prepared, duly signed, stamped and sealed and furnished as instruments of service, are the intellectual property and documents of the Architect, whether the work for which they were made is executed or not, and are not to be reproduced or used on other work except with a written agreement with the Architect (Sec. 33 of R.A. No. 9266).
5.15    Cost Records
During the progress of work, the Owner shall furnish the Architect a copy of the records of expenses being incurred on the construction. Upon completion of the project, the Owner shall furnish the Architect a copy of the summary of all cost of labor, services, materials, equipment, fixtures and all items used at and for the completion of the construction.
5.16    Design and Placement of Signs
All signboards of the General Contractor, sub-contractors, jobbers and dealers that shall be placed at the project site during the progress of construction shall be approved by the Architect as to size, design and contents. After the completion of the project, the Owner or his building lessee shall consult the Architect for the design, size of all signboards, letterings, directories and display boards that will be placed on the exterior or public areas attached to the building project in order to safeguard the Owner’s interest. Nothing should be installed inside or outside of the building that would compromise its safety and aesthetics.
5.17    Project Construction Cost (PCC)
Project Construction Cost (PCC, reference Annex “A” of this Agreement, as supplied by the Architect and as herein referred to), means the cost of the completed building to the Owner, including the structure, plumbing/sanitary and electrical fixtures, mechanical equipment, elevators, escalators, air-conditioning system, fire protection system, alarm and clock system, communications and electronic system, elements attached to the building and all items indicated in the plans, designs, drawings and specifications prepared by the Architect and his consultants. The construction cost of other items planned and designed by the Architect, such as architectural interiors (AI) and site development plan elements and other items of similar nature, additionally planned / designed by the Architect are also part of the PCC.
The cost of materials used and the labor for their installation are part of the PCC. If these items are furnished by the Owner below its market cost, the cost of the material and labor shall nonetheless be computed on the basis of the current (and fair market value) costs.
The PCC does not include any of the fees for the Architect, the Engineer, the Specialist Consultants or the salaries of the construction inspectors.
5.18    Project Development Cost
Project Development Cost shall include cost of the construction as well as all professional fees, permits, clearances and utilities and cost of acquiring the project site / lot, cost of money, etc.

ART.6     SUCCESSORS AND ASSIGNS
The Owner and the Architect each binds himself, his partners, successors, legal representative and assigns to the other party to this Agreement, and to the partner, successors, legal representatives and assigns of such other party in respect of all covenants of this Agreement. Except, as above, neither the Owner nor the Architect shall assign, sublet or transfer his interest in this Agreement without the written consent of the other.

ART.7     ARBITRATION                              
All questions in dispute under this Agreement shall be submitted in accordance with the provisions of R.A. No. 9285,otherwise known as the Alternative Dispute Resolution (ADR) Act of 2004 and as provided for under E.O. No.1000, governing Construction (and Consulting) Industry Arbitration, as well as the applicable provisions of the New Civil Code.

In case of any dispute concerning this Agreement, the Parties may venture into a negotiation/mediation period for fourteen (14) calendar days, failure of which would authorize any of the parties to engage in conciliatory discussions within another 14 calendar days, or to immediately seek arbitration modes of ADR under the Construction Industry Arbitration Commission (CIAC), guaranteeing a resolution of the issues presented within a six (6) month period, after which the losing party may file a Petition for Review before the Court of Appeals (CA).

The exclusive venue of such ADR proceedings shall be the CIAC Office at corners Sen . Gil Puyat Ave. and Makati Ave. in Makati City, PH.

The exclusive venue of such ADR proceedings shall be the CIAC Office at corners Sen . Gil Puyat Ave. and Makati Ave. in Makati City, PH.

The parties to this Agreement hereby agree to full performance of the covenants contained herein.

IN WITNESS WHEREOF, the parties to this Agreement have on the day and year first above given, hereunto set their hands at the bottom of this page and on the left-hand margin of all the other pages of this Agreement.


____________________                                       ____________________
Owner                                                           Architect

SIGNED IN THE PRESENCE OF:


_______________________________                ________________________________


Republic of the Philippines)
City of ____________       ) s.s.

Before me, a Notary Public in and for the City of ______________, personally appeared the Owner, ________________________ with Community Tax Certificate No. 00000000 issued on Month 00, 201_ in ¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬-____________ City and the Architect, _____________with Community Tax Certificate No. 00000000 issued in _________, on Month 00, 201_, both known to me to be the same persons who executed the foregoinq Instrument and its Annexes, and acknowledging to me that the same is their free act and deed.

In witness whereof, I have hereunto set my hand and affixed my Notarial Seal this ____ of _________ in the City of ___________, Philippines.