April, 2000

Advantages of AGC Standard Forms

A standard form contract is a copyrighted, pre-printed contract typically developed and issued by an industry organization and routinely used as a consumable for a common type of industry bargain or transaction.  It will cover in broad fashion the important terms and conditions of the parties’ bargain. It will also contain blank spaces for the parties’ names, the scope of the services to be performed, the time of performance, the amount of compensation due, and other bargain-specific information.  Most terms, however, are already defined and delineated for the parties.

By filling in requested information and by signing the agreement, the parties are bound by and adopt the terms contained in the standard form contract. Of course, the parties are free to modify the terms of the standard form contract as needed to address the particulars of their project through separate attachments, such as amendments or exhibits.

Standard forms are different from custom forms and model forms.  Custom forms are those drafted completely from scratch, usually by one party’s contracting officer or legal counsel, to address one specific transaction.  They generally involve considerable time and expense to draft.  The drafter must become very conversant with the complexities of the contemplated transaction and may not attempt to balance interests fairly.

Model forms, on the other hand, are those meant to be merely suggestive of appropriate terms and conditions. They are not copyrighted and are not intended to be used in their entirety. Rather, the parties are free to pick and choose which terms and conditions within the model forms pertain to their bargain.  The parties then place the chosen terms and conditions in their own contract. 

The advantages of using industry-accepted standard form contracts are significant.  If the standard form is an AGC form, industry experts—general contractors, owners, specialty contractors, construction law attorneys, and others—have collaborated in drafting it, an assurance that you have the best minds in the business crafting and scrutinizing each standard form.  As a result, many industry viewpoints are weighed and considered, thereby ensuring an equitable balance of risks and responsibilities and an appropriate baseline for the parties’ legal relationship.

Since the major risks and responsibilities already have been efficiently allocated, AGC document users save considerable transaction costs.  Users have an industry-accepted foundation for their transaction. They no longer need to go through a painstaking negotiation process for each transaction risk. Rather, they and their legal and insurance advisers may only need to review transaction-specific additions to and deletions from the AGC standard form. This saves time and expense for both contracting parties.

AGC standard forms also are regularly updated to keep pace with changes in the law and in the industry. They are inexpensive and readily available in printed and, in many instances, electronic formats, and they address a variety of project delivery types and legal arrangements.

The immediate users of AGC standard forms are not the only beneficiaries, however. AGC standard form contracts provide an invaluable reference to accepted industry practices and customs.  In fact, they serve as written “spokespersons” for contractors and the industry, relating the best paths to successful projects. Users and nonusers alike benefit from the dissemination of  this kind of industry knowledge.

Safety and Health

Multi-employer Worksite Policy

The following is the multi-employer citation policy:

A. Multi-employer Worksites.

On multi-employer worksites (in all industry sectors), more than one employer may be citable for a hazardous condition that violates an OSHA standard. A two-step process must be followed in determining whether more than one employer is to be cited.

Step 1: The first step is to determine whether the employer is a creating, exposing, correcting, or controlling employer.  It is importanyt to remember that an employer may have multiple roles. Once you determine the role of the employer, go to Step Two to determine if a citation is appropriate (NOTE: only exposing employers can be cited for General Duty Clause violations).

Step 2: If the employer falls into one of these categories, it has obligations with respect to OSHA requirements. Step Two is to determine if the employer's actions were sufficient to meet those obligations. The extent of  the actions required of employers varies based on which category applies. Note that the extent of the measures that a controlling employer must take to satisfy its duty to exercise reasonable care to prevent and detect violations is less than what is required of an employer with respect to protecting its own employees.

B. The Creating Employer

Step 1: Definition: The employer that caused a hazardous condition that violates an OSHA standard.

Step 2: Actions Taken: Employers must not create violative conditions. An employer that does so is citable even if the only employees exposed are those of other employers at the site.

C. The Exposing Employer

Step 1: Definition: An employer whose own employees are exposed to the hazard.

Step 2: Actions taken: If the exposing employer created the violation, it is citable for the violation as a creating employer. If the violation was created by another employer, the exposing employer is citable if it (1) knew of the hazardous condition or failed to exercise reasonable diligence to discover the condition, and (2) failed to take steps consistent with its authority to protect is employees. If the exposing employer has authority to correct the hazard, it must do so. If the exposing employer lacks the authority to correct the hazard, it is citable if it fails to do each of the following: (1) ask the creating and/or controlling employer to correct the hazard; (2) inform its employees of the hazard; and (3) take reasonable alternative protective measures. In extreme circumstances (e.g., imminent danger situations), the exposing employer is citable for failing to remove its employees from the job to avoid the hazard.

D. The Correcting Employer

Step 1: Definition: An employer who is engaged in a common undertaking, on the same worksite, as the exposing employer and is responsible for correcting a hazard. This usually occurs where an employer is given the responsibility of installing and/or maintaining particular safety/health equipment or devices.

Step 2: Actions taken: The correcting employer must exercise reasonable care in preventing and discovering violations and meet its obligations of correcting the hazard.

E. The Controlling Employer

Step 1: Definition: An employer  who has general supervisory authority over the worksite, including the power to correct safety and health violations itself or require others to correct them. Control can be established by contract or, in the absence of explicit contractual provisions, by the exercise of control in practice. Descriptions and examples of different kinds of controlling employers are given below.

Step 2: Actions Taken: A controlling employer must exercise reasonable care to prevent and detect violations on the site. The extent of the measures that a controlling employer must implement to satisfy this duty of reasonable care is less than what is required of an employer with respect to protecting its own employees. This means that the controlling employer is not normally required to inspect for hazards as frequently or to have the same level of knowledge of the applicable standards or of trade expertise as the employer it has hired.

Step 3: Factors Relating to Reasonable Care Standard. Factors that affect how frequently and closely a controlling employer must inspect to meet its standard of reasonable care include:

a. The scale of the project;

b. The nature and pace of the work, including the frequency with which the number or types of hazards change as the work progresses;

c. How much the controlling employer knows both about the safety history and safety practices of the employer it controls and about that employer's level of   expertise.

d. More frequent inspections are normally needed if the controlling employer knows that the other employer has a history of non-compliance. Greater inspection frequency may also be needed, especially at the beginning of the project, if the controlling employer had never before worked with this other employer and does not know its compliance history.

e. Less frequent inspections may be appropriate where the controlling employer sees strong indications that the other employer has implemented effective safety and health efforts. The most important indicator of an effective safety and health effort by the other employer is a consistently high level of compliance. Other indicators include the use of an effective, graduated system of enforcement for non-compliance with safety and health requirements coupled with regular jobsite safety meetings and safety training.   

Legislation

See Legislation at www.agc.org

Excerpts from Roll Call.

Internet Resources

Labor and Human Resources

The AGC.org website contains an area to address questions concerning labor and human resources questions.  The Labor and Human Resources News and Bulletins section consists of a “clickable” matrix as shown below, in which the user can download the latest editions of bulletins covering many aspects of Union and Open Shop H/R information.  It’s as easy as point and click!