How AIA Pay Applications Work in Construction

You might have heard an architect or contractor throw around jargon like a G612 AIA form or an A151 AIA contract. Chances are that if you have ever built a house or renovated your old home, you have already signed several AIA contract documents. So what are they? They are simply a form of agreement between the owner and contractor to ensure timely payments. However, the process goes a lot deeper than that depending on who you are and for what purpose you need an AIA payment application. 

What are AIA Pay Applications?

AIA contracts and billings are standardized payment applications designed to protect architects’ interests in the construction industry. Backed (and managed) by the American Institute of Architects, AIA documents contain terms and procedures that are easy to read and understand for every design and construction phase. 

They exist as ready-to-go templates to assist architects get paid for work without involving any complexities. That said, AIA agreements are customizable if the nature of the job requires additional legalities. 

Types of AIA Contract Documents

AIA billings are divided into seven categories, each designed for a separate use. The parties involved and their purpose determine the type of AIA document needed. 

• Series A contains owner/contractor agreements. 
  
• Series B contains owner/architect agreements.
  
• Series C contains agreements between any other parties.
  
• Series D contains miscellaneous agreements. 
  
• Series E contains sustainability, BIM, and digital data documents.
  
• Series F contains facility management and maintenance documents.
  
• Series G contains project management and administration agreements.

The American Institute of Architects ensures that every AIA pay application document is up-to-date to reflect legal or industry changes. 

From Where Can I Get AIA Documents?

AIA contract documents can only be purchased from the official AIA website. You can, however, read them before making a purchase. The website features a user-friendly filter system to easily search for an AIA document based on project role, type, specialty, and series. You can also get recommendations by logging into your account and answering some questions with the built-in “Help Me Select” tool. 

Every AIA contract document can be purchased individually from the website. Their prices are written alongside. AIA also features three subscription tiers that are billed annually. 

• Architect Essential – $1,795: Features 37 agreements, 14 forms, and 13 exhibits. 
• Contractor/Architect Advanced – $1895: Features 67 agreements, 76 forms, and 31 exhibits. 
• Enterprise Pro – $1,995: Features 116 agreements, 99 forms, and 62 exhibits. 

How to Fill AIA Pay Application

While every AIA contract looks to cover nearly all parts of the building process, they can vary in complexity. Some contracts can be as long as a hundred pages. Others can be a few pages with fairly less technical and legal jargon. However, a typical AIA contract will always contain the following basic parts. 

• The complete description of work required. Details help remove any ambiguities. The scope, scale, and specifications must be clearly noted. 
• The amount of compensation that needs to be paid upon completion of work, and how. Some contracts might require an advanced payment or regular stipends after reaching specific construction milestones. 
• The confirmation of a security payment. While not all contracts make it mandatory, the agreement must highlight whether the client will hold a portion of the payment as collateral until the work is completed.
• The process of handling disputes and renegotiations. Clients are free to reconsider their options after signing off on the dotted lines, but the agreement must point out how the new changes will be implemented. Changing the layout, for example, might warrant an additional fee and require time. Mentioning every procedure ensures that disputes are short and tame.

Limitations and Challenges of AIA Contracts and Forms 

AIA may be the standard in the construction industry, but the improved reliability comes at the cost of reduced flexibility. It is important to understand all these limitations (and concerns) before creating your contracts.

AIA Contracts Can Be Expensive

AIA payment applications can mount up to be an expensive ordeal, which most small-scale companies might find difficult to absorb. In addition to one-time purchases or annual subscriptions, there is also a cost associated with managing AIA contracts. 

Trying to track multiple agreements and documents between projects and contractors can quickly become overwhelming. Since each department manages documents differently, bringing them back together alongside their updated notes can require hours of labor. Some companies even have separate people to retype or scan everything to form a complete document for review, which is an additional expense.

Complexity Issues

AIA forms and bills are generally complicated. Certain AIA types, especially for large-scale construction, require companies to spend time reviewing and discussing changes with lawyers. Contractors have even started ignoring (hiding) certain columns to reduce clutter. 

That level of complexity wastes time and in addition, makes it difficult to follow through with the project. For example, the change order section can often present difficulties when completing AIA billing forms. Include only approved change orders for the billing period to align the dates. Including pending change orders can lead to rejections and delayed payments.

Customization Limitations

Some contractors require their AIA payment forms to undergo several customizations. While AIA leaves behind enough room to tailor each form accordingly, forcing a template to cater to every specification or requirement for a construction project can be time-consuming. Most often, contractors end up creating multiple forms, which only adds to the pile and makes it harder to keep track of the whole project. 

The advent of digital technology has introduced contractors to several tools and platforms that let them customize their standard AIA agreements by combining multiple categories. However, this can often lead to a delay in the billing process.

Notarization

Every AIA payment document requires notarization for legal purposes, which removes the flexibility of working remotely. The construction industry has moved around such limitations in recent years, but the necessity of notarization remains a concern. The best most construction companies have done is have an in-house notarization department, especially in the accounting department, to reduce delays.

Different Laws in Different Regions

It should be noted that the validity of AIA pay applications depends on location. While AIA standardization unifies architects to give them more power, especially in resolving disputes, certain legal aspects are handled differently in different states. 

For example, the clause that allows contractors to hold back a portion of payment from subcontractors until the job is complete is seen as illegal in several states. Hence, AIA contracts are limited to different laws and regulations.

Do You Need AIA Pay Applications?

You do not necessarily have to use an AIA form. You can simply use a billing form similar to an AIA form without worrying about the standard documentation, which can be several pages of unfamiliar and overwhelming information. This also eliminates the problem of signing off on a contract that could potentially give the most benefits to the architects and less to all other participating parties.

Using AIA documentation for bill processing can also be quite costly. If you must use AIA forms for a project, downloading them from the AIA official website can be very expensive. 

If you want a digital version of the AIA, they can charge you for every use of the AIA billing forms. In addition, they also limit you to using the same AIA document only once. 

By using documents similar to AIA, you avoid having to purchase a new AIA document every single time you start a new project. However, if you are required to use AIA documentation for billing processes, many supporting websites and companies allow you to enter the AIA information into your computer and print it professionally onto your AIA hard copy.

Hassle-Free Pay Applications Management With eSUB 

Considering all the concerns and limitations of using and managing AIA payment applications, start relying on a construction project manager such as eSUB to automate your workflow. The digital platform simplifies the whole process by keeping a centralized database, which everyone can access to see what is happening and take part when needed. 

You also get to generate and edit pay applications with user-friendly tools, track forms without any issues, and always have supporting data to quickly resolve payment disputes. Furthermore, its cloud-based support ensures that your documents are never lost. 

Schedule a demo today and give contractors an AIA contract document they can read with ease, and respond quickly for timely payments.