Construction price documents revised

January 25, 2022


Courtesy: Norm Streu, executive vice-president, NCM development, Nexii Building Solutions. Lawyer Christopher Hirst, managing partner at Alexander Holburn LLP., Vancouver, B.C

The Canadian Construction Documents Committee’s (CCDC) standard prime contract between owners and general contractors is a well-known and widely-used document in the construction industry.
The document is called CCDC 2 Stipulated Price Contract (CCDC 2), and is primarily used where the parties desire a single, predetermined fixed price, or lump sum, for a project. In late 2019, the committee introduced the first update to the CCDC 2 since 2008.
As of January 1, 2022 the CCDC 2-2008 is obsolete, and copyright seals for it will no longer be available from the CCDC.
Some key CCDC 2 changes that owners and contractors should keep in mind are noted below.
Payment terms. CCDC 2 is designed to align with prompt payment legislation across Canada. These changes include:

1. owner promptly providing written notice to the contractor with reasons for the revision or rejection of all or a portion of an application for payment;
2. • applications for payment are to comply with the provisions of provincial payment legislation;
3. •payment by the owner is to be made within 28 calendar days of receipt of the application of payment and in compliance with payment legislation; and
4. final payment is to be made no later than five calendar days after the issuance of the final certificate of payment and in compliance with payment legislation.

Other changes to payment terms appear to be designed to incorporate elements commonly found in supplementary conditions added to the previous version of the CCDC 2. For instance, applications for payment now require evidence of compliance with Workers Compensation legislation as well as a CCDC 9A declaration regarding distribution of amounts
previously received from the owner.
Ready for takeover. One section of the revised contract introduces the concept of “ready for takeover” in addition to the traditional “substantial performance.” This concept is presumably designed to ensure that a project reaches total completion in a timely manner.
Construction safety. In the old CCDC 2, the contractor was solely responsible for construction safety at the place of the work. In the new CCDC 2, the contractor remains responsible for health and safety, but the owner is now also responsible for construction safety as well as for ensuring the consultant, other contractors, and its own forces comply with the contractor’s health and safety programs (GC 9.4).

Cash allowances. Following the trend of incorporating supplemental condition terms that are widely used, unexpended cash allowances can now be allocated to other cash allowances to cover shortfalls. The net amount of unexpended cash allowances, after adjustment for reallocation, is to be deducted from the contract price. Likewise, where the actual cost under all cash allowances exceeds the total amount of cash allowances, these additional amounts are to be added to the contract price.