CCDC Contract Updates – Key Changes To The CCDC 5B

CCN No. 25-09-09

Key Takeaway

The CCDC 5B – 2025 Construction Management Contract for Services and Construction is now available for use and contains several significant changes to the standard form contract for construction management "at-risk" services.

Application to Your Organization

On June 30, 2025, the Canadian Construction Documents Committee (CCDC) released an updated version of the CCDC 5B – 2025 Construction Management Contract for Services and Construction (CCDC 5B-2025), the form of contract typically used for retaining a construction manager "at-risk." The CCDC 5B-2025 replaces the prior version that was published in 2010 (CCDC 5B-2010).

In this special edition Cassels Construction Note we outline the new concepts and key differences as between the CCDC 5B-2010 and the CCDC 5B-2025 and how those changes and/or additions will impact users. We cover the following concepts to give you the tools needed to effectively understand and implement the new CCDC 5B-2025 in your organization.

A. Pre-Construction Services and Construction Services

The CCDC 5B-2025 replaces the defined term "Services" with two new terms that better describe the progressive delivery of the Construction Manager's services, which start during the design phase before transitioning to construction:

• Pre-Construction Services are set out in a completely redrafted Schedule A1 – Pre-Construction Services. The Pre-Construction Services can start as early as during the "Pre-design Phase," continuing through the usual design phases (i.e., schematic, design-development, and construction documents), and concluding once construction procurement is complete. Typical Pre-Construction Services include preparing cost estimates and preliminary schedules, advising on constructability, procurement planning, etc.

• Construction Services are listed in a brand-new Schedule B – Construction Services. These include the services to be performed during construction, in addition to the performance of "Work" (i.e., the "sticks and bricks" construction), such as: reporting on cost controls, schedule tracking, changes, and project risks, as well as providing recommendations to correct project deviations. Schedule B – Construction Services also lists the required post-construction services related to final reporting and warranty-related services.

B. Contract Price

One of the most significant updates is the clarification of the CCDC 5B's compensation structure. Changes to Articles A-5, A-6, A-7, and A-8 provide a clearer description of the four ways that the Construction Manager is compensated, the sum of which is the "Contract Price":

• Construction Manager's Fee for Pre-Construction Services (Article A-5), which is limited to payment of a fixed fee and/or payment of time-based fees, the latter being calculated according to rates listed in Schedule C – Time-Based Rates for Construction Manager's Personnel.

• Reimbursable Expenses for Pre-Construction Services (Article A-6), which is restricted to reimbursement for the expenses listed in Schedule A2 – Reimbursable Expenses for Pre-Construction Services, plus an administrative charge to be determined by the parties.

• Fee for Construction Services (Article A-7), which is payable as a fixed fee and/or as a percentage of the Cost of the Work.

• Cost of the Work (Article A-8), which includes updates to the list of payment-eligible items. Cost of the Work includes, for example, labour costs (per the rates set out in Schedule C – Time-Based Rates for Construction Manager's Personnel¹), the cost of products, cost of construction equipment (per the rates set out in Schedule D – Construction Equipment Rates²), temporary works, subcontract costs (which must be approved by the Owner), and other expenses incurred to perform the Work.

C. Ready-For-Takeover

In alignment with the approach adopted for the CCDC 2 – Stipulated Price Contract in 2020, the CCDC has incorporated the "Ready-for-Takeover" concept into the CCDC 5B. This concept marks a new milestone indicating that the Work is nearly complete, as verified by the Consultant. Attaining Ready-for-Takeover is based on eight pre-requisites listed in GC12.1.1. Notably, however, attaining Ready-For-Takeover is not directly connected to a payment milestone for the Construction Manager, but it does signal the start of the 1-year warranty period in GC 12.3.1.

D. Contract Time, Project Schedule, and Construction Schedule

Incremental revisions to Articles A-1.3 and (new) Article 1.4 attempt to clarify the start of the Pre-construction Services, that the performance of the Construction Manager is linked to the "Project Schedule" and the "Construction Schedule," and timing for attaining Ready-for-Takeover.

Importantly, CCDC 5B now refers to two schedules that are related to the Contract Time: the "Project Schedule" and the "Construction Schedule."

• The Project Schedule is the Owner's initial schedule to be included as part of the "Description of the Project" in Article A-3. This schedule is likely a high-level schedule, setting out the Owner's key milestones for the Project, which presumably would include an initial target date for attaining Ready-for-Takeover.

• The Construction Schedule is prepared by the Construction Manager and delivered to the Owner prior to its first application for payment, per GC 3.4.1.1. While the Construction Schedule must reference the Project Schedule, there is no express right for the Owner to approve the Construction Schedule.

Revised Article A-1.3 specifies when the Pre-construction Services will start and prescribes that the continued performance of Pre-construction Services and the Construction Services must align with the Construction Schedule (without reference to the Project Schedule).

New Article A-1.4 requires performance of the Work in accordance with the Construction Schedule and the Project Schedule, while providing three options for completion of the Work:

• specifying a target date for attaining "Ready-for-Takeover";
• allowing for the Owner and the Construction Manager, after execution of the Contract, to agree on a target date for attaining Ready-for-Takeover (although it does not specify when or how this agreement will occur); or
• specifying a "no later than" deadline for the conclusion of the Construction Manager's performance of the Work.

The flexibility set out in Article A-1.4 reflects the practical reality that key Project milestones and a realistic Construction Schedule cannot always be finalized at the time that the Construction Manager is retained. However, we anticipate that supplementary conditions will still be required to fully align the Owner's expectations set out in the Project Schedule with the realities that are uncovered during pre-construction.

E. Conversion to a GMP or Stipulated Sum

Unchanged are the options for the parties to convert from a cost-plus contract to a stipulated price contract or a guaranteed maximum price contract (with or without sharing of the cost savings). Although, each option is now fully described, with proposed contract revisions, in their own appendices:

• stipulated price contract conversion (Appendix 1);
• guaranteed maximum price contract (without shared savings) conversion (Appendix 2); and
• guaranteed maximum price contract (with shared savings) conversion (Appendix 3).

F. Payment Legislation & Adjudication

"Payment Legislation" is a new comprehensive term that refers to the various provincial statutes³ that, to varying degrees, implement prompt payment, adjudication, construction liens, construction trusts and other statutory remedies prescribed by legislation.

Hand in hand with this revision, the CCDC 5B also includes a brief section about adjudication. New GC 8.2 – Adjudication reminds parties that despite the dispute resolution process set out in the Contract, adjudication prescribed by applicable legislation is not impacted by such steps.

G. Owner's Coordination of the Construction Manager and the Consultant

Owners should be aware that there are several amendments to the Owner's responsibilities in GC 2.1.

There is now a requirement for Owners to inform the Construction Manager of the scope of the Consultant's services (GC 2.1.1.2), and to, likewise, inform the Consultant of the scope and terms of the CCDC 5B (GC 2.1.1.3). Owners also now have an express obligation to coordinate the services of the Construction Manager and the Consultant (GC 2.1.1.4).

H. Execution Plan

If requested by the Owner, the Construction Manager must prepare an execution plan that must then be agreed upon by the parties (GC 3.1.1). The execution plan will set out:

• the methodology for completing the Work;
• the methodology for procuring subcontractors;
• planning and costing of the Construction Manager's own forces; and
• a cash flow forecast.

This process may allow the Owner the opportunity to collaborate and contribute to establishing an efficient and effective method of executing the Work and, perhaps, mitigating Project costs.

I. Modified Standard of Review

The Construction Manager's obligation to look for and report errors, omissions, or inconsistencies in the Drawings and Specifications has been watered down. Former GC 3.4 in the CCDC 5B-2010 (Review of Drawings, Specification, and Material Finishing Schedules), including the standard of review "to the best of the Construction Manager's knowledge, information and belief" has been deleted. Instead, the CCDC 5B-2025 includes a general requirement at GC 1.1.3 for the Construction Manager to review the Contract Documents for the purpose of coordinating and executing the Work.

What has not changed is the Construction Manager's obligation, as part of the Pre-construction Services, to review drawings and specifications for constructability and coordination as they are developed during the schematic, design development, and construction documents phases. These reviews have been enhanced; requiring the Construction Manager to also comment on "availability of materials and labour, alternative designs, possible economies, and time requirements for fabrication, installation and construction."

J. Cash Allowances

The provisions governing the administration of cash allowances under Part 4 – Allowances have been "Intentionally omitted" from the main body of the CCDC 5B-2025, but are resurrected in the new appendices. If the parties convert the CCDC 5B to a stipulated price or a guaranteed maximum price (with or without shared savings) the relevant appendix re-inserts typical provisions for the administration of cash allowances.

K. Payment

While most of the changes impacting payment reflect an attempt by the CCDC to align the CCDC 5B with the prompt payment requirements now legislated in several jurisdictions⁴ there are two other notable changes that warrant discussion:

• No certification of Pre-construction Services: Revised GC 2.3.3 now provides that the Consultant will not receive or certify the Construction Manager's applications for payment for Pre-construction Services. The Consultant will also not be expected to deliver interpretations of the Contract Documents as they relate to the scope of the Pre-construction Services, the Pre-construction Services Fee, or the reimbursable expenses incurred for the Pre-construction Services. This provision recognizes that the Consultant, as payment certifier, is strictly meant to evaluate progress of the Work (i.e., the "sticks and bricks" construction).

• Progressive Schedule of Values: Revised GC 5.4.4 introduces a requirement for the Construction Manager to develop, submit, and maintain a schedule of values that aggregates the anticipated cost of the Work. As Subcontractors are retained, the Construction Manager must submit updates to the schedule of values until all subcontracts are awarded (i.e., "bought-out").

L. Owner's Off-Ramp

New GC 7.1.8 provides the Owner with the right to terminate the Contract at any time if the Owner is "unable" or "unwilling" to proceed with the Pre-construction Services or the Work. The cost to the Owner for exercising this right depends on if the election is made during the Pre-construction Phase or during the Construction Phase:

• During Pre-construction Phase the Construction Manager is entitled to payment for all Pre-Construction Services performed to the effective date of termination, including any applicable reimbursable expenses, plus a break fee that is based on a percentage of the latest accepted Construction Cost Estimate.

• During the Construction Phase the Construction Manager is entitled to payment for all Pre-Construction Services, Construction Services and Work performed to the effective date of termination, including any reimbursable expenses, plus "such other direct damages as the Construction Manager may have sustained as a result of the termination including reasonable loss of profit."

M. Safety

Despite revisions to GC 9.4 – Construction Safety, the Construction Manager still holds primary responsibility for establishing, initiating, maintaining, and supervising all health and safety precautions and programs. The revisions do, however, place some new responsibility on the Owner to ensure that the Consultant and Other Contractors also comply with the health and safety programs of the Construction Manager.

N. Limitation of Liability

The CCDC 5B expands the limitation of liability provisions so that, subject to certain exclusions, the total cap on liability for either party in respect of any claims related to the Contract is limited to:

• in respect to losses for which insurance is to be provided, to the amount of the applicable insurance required by the Contract; and
• in respect to all other losses, the greater of the Contract Price, or $2,000,000, with a maximum cap of $20,000,000.

There is also a full mutual waiver of liability for any indirect, consequential, punitive, or exemplary damages.

These new liability limitations and waivers do not apply in certain excluded situations, as set out in GC 13.2.2:

• a party's obligation to indemnify, when the obligation arises due to a third party claim;
• in respect of an obligation to indemnify due to claims arising from toxic and hazardous substances (GC 9.2), or mould (GC 9.5);
• the Owner's obligation to indemnify for claims due to an infringement of a patent (GC 10.3.2);
• the Owner's obligation to indemnify for a defect in title;
• claims arising from a party's wilful misconduct, wilful default, fraudulent or criminal acts, or abandonment;
• claims arising from a party's violation of applicable laws; and
• claims arising from substantial defects or deficiencies in the Work which were not known or could not be discovered before the end of the warranty period.

Footnotes

1 Schedule C – Time Based Rates for Construction Manager's Personnel now makes a clear link between the rates in Schedule C and the labour costs forming part of the Cost of the Work (Article A-8.1.1). There is also an option for the parties index the rates based on the Canadian Consumer Price Index (CPI) or another percentage.

2 Schedule D – Construction Equipment Rates sets out rates for Construction Equipment. If a rate is not included in Schedule D, such amounts are deemed to be included in the Fee for Construction Services. Schedule D also includes an option for the parties to index the rates based on CPI or another percentage.

3 For example, the Construction Act (Ontario), the Builders' Lien Act (British Columbia), and the Prompt Payment and Construction Lien Act (Alberta).

4 For example, the requirement in GC 5.5.1.2 for the Owner to make payment within 28 calendar days following receipt of the Construction Manager's application for payment is consistent with Section 6.4(1) of the Construction Act (Ontario).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.