Compare and Contract: CCDC2 and CCDC 5A

CCDC contracts are ubiquitous in the construction industry. They are used for all manner of different project types and sizes, so much so that familiarity with these documents is almost becoming required to do business in Ontario’s construction industry.

There are currently around 14 types of CCDC format contracts. Of these 14, at least six see common usage:

1. CCDC 2 – Stipulated Price Contract
2. CCDC 3 – Cost Plus Contract
3. CCDC 4 – Unit Price Contract
4. CCDC 5A – Construction Management Contract – For Services
5. CCDC 5B – Construction Management Contract – For Services and Construction
6. CCDC 14 – Design-Build Stipulated Price Contract

Two more common formats, the CCDC 2 and the CCDC 5A present very different project delivery methods.

The CCDC 2 style contract is the form of contract that arguably most aligns with a common-sense understanding of how a construction project works. An owner, working with an architect, prepares a design for a project and hires a general contractor to build that design. The general contractor becomes responsible for hiring its own trades, obtaining the materials necessary to complete the work, and completing and coordinating the work. The general contractor runs the site and receives payment from the owner for its work.

Under the CCDC 2 format, the general contractor constructs the project based on a fixed fee arrangement. From a risk allocation perspective, this often means that the general contractor bears much of the risk for material or labour cost increases over the life of the project. The Owner gets relative price certainty on its project, but the contractor also prices in the risks associated with performing a project on a fixed fee basis.

The CCDC 5A format requires the owner to take a more hands-on approach to its project, with the construction manager supporting the owner’s performance of the work. The owner, working with an architect, is typically responsible for project design, as is the case under a CCDC 2, but unlike a CCDC2, the owner in a CCDC 5A style arrangement is responsible for retaining trades and suppliers. The construction manager will assist with the work required to manage and coordinate all trades and suppliers, but the ultimate responsibility (and risk) associated with performing the work typically remains with the owner. A construction manager hired under a CCDC 5A is typically compensated by payment of a percentage of the overall cost of the work rather than an agreed-upon fixed fee.

A CCDC 2 is an appropriate format for owners to consider where the owner knows what it wants to build, wants someone else to build it, and wants someone else to accept much of the risk of potential price increases. The CCDC 5A model is appropriate for consideration where the owner knows what it wants to build, wants to be in control of constructing the project itself and wants someone else to play a secondary management role, assisting with certain services needed to construct the project.

Regardless of which contract model is appropriate for your specific project, the base CCDC 2 and CCDC 5A can and often should be modified by including supplementary conditions to better define the requirements of a specific project and to clarify the division of obligations and risks. The lawyers of Construct Legal are experienced with all varieties of CCDC and non-CCDC construction contracts. We can help you prepare contracts by ensuring you understand the risks associated with your projects and by helping control those risks wherever possible.

This article is not legal advice and is provided for informational purposes only.