October 8, 2020
New Prefabricated Contract Document Eases Use for Prefab and Modular Buildings
The ConsensusDocs Coalition has just published the industry’s first standard contract document to address one of the most important and growing trends in the design and construction industry – prefabricated construction.ConsensusDocs has been working for two years with industry leaders to offer a standard prefabricated construction contract document. The Modular Building Institute (MBI) recently joined the ConsensusDocs Council as result of the successful work conducted by the working group. The new ConsensusDocs 753 Standard Prefabricated Construction Contract addresses the most common use case scenario of prefabricated construction in which a constructor, general contractor, design-builder, or Construction Manager contracts with a prefabricator to fabricate a component off-site that is later installed on a project worksite.
While prefabricated construction or modular buildings have been around for decades, important contractual and legal issues have remained unaddressed in most construction contracts. Finally, with ConsensusDocs leadership, there is now an off-the-shelf solution that defines important new industry definitions and scenarios that are unique to prefabricated construction. Using a typical construction subcontract or purchase order for prefabricated construction is dangerous.
“As someone who often represents General Contractors and Prefabricators, I have written several custom agreements to address the unique risk presented by modular building and prefabricated construction generally,” comments Ron Ciotti, a partner at Hinkley Allen and chair of the ConsensusDocs Prefab Working group. “The new ConsensusDocs Prefabricated construction contract advances the understanding and risk allocation desperately needed because prefabricated construction is revolutionizing the way construction will occur in a post pandemic construction world.”
ConsensusDocs Executive Director and Senior Counsel Brian Perlberg comments, “This is one of the most anticipated contracts in ConsensusDocs history because there is a glaring need to address the growing trend of prefabricated construction or modular building, and current contracting practices simply do not cut it.”