Practice Management Key Terms
Master these terms to build a strong foundation for the PcM division. Terms are grouped by topic area.
Project Delivery Methods
Design-Bid-Build (DBB)
Traditional delivery method where the owner contracts separately with an architect for design and a contractor for construction. The design is completed before bidding begins. Provides the most owner control over design quality but typically the longest schedule.
Design-Build (DB)
Single-source delivery method where one entity provides both design and construction services. Fastest schedule, single point of responsibility, but the owner has less control over design decisions.
Construction Manager as Adviser (CMa)
The CM advises the owner during design and construction but does not hold trade contracts. The owner contracts directly with trade contractors. Also called CM-Agency.
Construction Manager as Constructor (CMc/CMr)
The CM holds trade contracts and guarantees a Guaranteed Maximum Price (GMP). The CM assumes construction risk. Also called CM-at-Risk.
Integrated Project Delivery (IPD)
Multi-party agreement where owner, architect, and contractor share risk and reward. Requires high collaboration and transparency. Uses shared financial incentives tied to project outcomes.
AIA Contract Documents
AIA B101
Standard Form of Agreement Between Owner and Architect. Defines the architect's scope of services, compensation, and responsibilities across all project phases. Learn more about AIA contract types.
AIA A201
General Conditions of the Contract for Construction. Defines the rights, responsibilities, and relationships between the owner, contractor, and architect during construction.
AIA C401
Standard Form of Agreement Between Architect and Consultant. Establishes the architect-consultant relationship, including scope, compensation, and liability.
AIA A101
Standard Form of Agreement Between Owner and Contractor (Stipulated Sum). Defines the contract sum, schedule, and payment terms.
Initial Decision Maker (IDM)
Under AIA A201, the person identified to render initial decisions on claims between the owner and contractor. Typically the architect unless otherwise specified.
Risk Management
Professional Liability Insurance (E&O)
Claims-made insurance that covers damages arising from professional negligence, errors, or omissions in the architect's services. Must be in effect when the claim is filed. See our deep dive on risk management strategies.
General Liability Insurance
Occurrence-based insurance covering bodily injury and property damage on the architect's premises or caused by the architect's general business operations. Does not cover professional errors.
Indemnification
A contractual obligation to compensate another party for losses. Mutual indemnification limits each party's obligation to losses caused by their own negligence.
Limitation of Liability
A contractual cap on the total amount of damages one party can recover from another. Common in architect-owner agreements.
Standard of Care
The level of skill and diligence that a reasonably competent architect would exercise under similar circumstances. This is the legal benchmark for professional performance.
Business Structures
Sole Proprietorship
Simplest business structure. Owner has unlimited personal liability. No separation between personal and business assets.
General Partnership
Two or more individuals share ownership. All partners have unlimited personal liability for business debts and obligations.
Limited Liability Company (LLC)
Provides limited liability protection to owners (members). Flexible tax treatment. Members' personal assets are generally protected from business debts.
S-Corporation
Corporation that elects pass-through taxation. Limited to 100 shareholders. Provides limited liability and avoids double taxation.
C-Corporation
Standard corporation with separate legal identity. Subject to double taxation (corporate and individual). Unlimited shareholders allowed. Provides the strongest liability protection.
Professional Ethics
NCARB Rules of Conduct
Enforceable rules governing the professional conduct of registered architects. Violation can result in disciplinary action including license revocation.
AIA Code of Ethics
Voluntary ethical guidelines for AIA members. Organized into canons, ethical standards, and rules of conduct. Primary obligation is to public health, safety, and welfare.
Conflict of Interest
A situation where the architect's personal, financial, or professional interests could impair objectivity or compromise duties to the client or public.
Practice these terms with PcM flashcards and test your knowledge with PcM mini exams.
Related Resources
- PcM Study Guide - comprehensive overview of Practice Management
- Project Delivery Methods Deep Dive
- Contract Types Deep Dive
- Risk Management Deep Dive
- Contract Types Cheat Sheet
- PcM Exam Tips
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