Which provision in AIA A401 typically flows down from the prime contract to the subcontract?
Correct Answer
A) Payment terms and retainage percentages
Payment terms and retainage percentages typically flow down from the prime contract to subcontracts, ensuring consistency in payment structures throughout the project hierarchy.
Why This Is the Correct Answer
Payment terms and retainage percentages flow down from the prime contract (AIA A101/A102) to the subcontract (AIA A401). This 'pay-when-paid' and retainage flow-down ensures that the payment chain from owner to contractor to subcontractor is consistent and contractually aligned.
Why the Other Options Are Wrong
Option B: Architect's scope of services
The architect's scope of services is defined in the owner-architect agreement (AIA B101) and does not flow down to subcontracts. The architect has no direct contractual relationship with subcontractors under the standard AIA structure.
Option C: The contractor's fee structure
The contractor's fee structure is an element of the prime contract between the owner and the contractor. It is not passed down to subcontractors, who negotiate their own fees directly with the contractor.
Option D: Owner's financing arrangements
The owner's financing arrangements are entirely between the owner and their lender. Subcontractors are not party to, nor affected by, the owner's financing terms in a flow-down provision.
Memory Technique
Think of money flowing downhill: the owner sets payment terms and retainage at the top (prime contract), and those same terms flow down like water to the subcontract level. Everything else — architect fees, owner financing — stays at its own level.
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