Construction Management new CCDC 5A, CCDC 5B and CCDC

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19th Annual BC Institute PMAC Workshop"Circle of Excellence"

Presented by Roy Nieuwenburg

September 28 – 30, 2011

CW4649436

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Outline

today’s session:

- overview of the new forms

- discuss the changes

- discuss how to work with these new templates

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first,

any burning questions?

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As of May 2011, the CCDC (Canadian Construction Documents Committee) and CCA (Canadian Construction Association) phased out the former construction management standard documents and replaced them with the new CCDC 5A and CCDC 5B Construction Management Contracts and the related CCDC 17 Trade Contractor Contract.

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CCDC 5A – previously was “CCA 5 1988 - CANADIAN STANDARD CONSTRUCTION MANAGEMENT CONTRACT FORM BETWEEN OWNER AND CONSTRUCTION MANAGER”

CCDC 5B – no previous equivalent. CCDC’s answer to “CM At Risk” or “CM converting to stip sum”.

CCDC 17– previously was “CCA17 1996 STIPULATED PRICE CONTRACT FOR TRADE CONTRACTORS ON CONSTRUCTION MANAGEMENT PROJECTS”

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Context – where does cm fit in the bigger picture?

What is the best Project Delivery Method?

What is the best Contracting Structure?

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Construction Management Association of America

“An Owner embarking on a construction project must make an important decision regarding the method by which the project is designed and constructed - the project delivery method.”

Some further discussion – TAB F.

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Context – continued

e.g.

design – bid – build

design - build

etc.

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“species”

- stipulated price (e.g. CCDC2 2008)- cost plus (e.g. CCDC3 1998)

- unit price (e.g. CCDC4 1982)

- construction management - design build (e.g. CCA/CSC/RAIC 14 2000)

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“species” continued:

- EPC– “engineer, procure, construct” or

EPCM “engineer, procure, construction manage”

- etc.

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“varieties” of e.g. stipulated price contract: - CCDC2 2008- MMCD (Master Municipal)- Alberta Infrastructure prescribed forms - Civil Works Contract (CCDC18 – 2001) - Unit Price or lump sum

stipulated price

- Province of BC Stip Price Contract (until 2002)- many US examples (core of army engineers etc.)- many owners have their own forms – e.g. UBC PT, UBC,

YVRAA, etc.- Construction Owners Association of Alberta (COAA)

published forms

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back to construction management:

variants of construction management:

- straight cm (CCDC suggests CCDC5A)

- cm converting to stip sum aka CM at risk(CCDC suggests CCDC5B)

- hybrids (next slide)

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hybrids (can achieve similar result)

- variants of “cost plus” might be loosely considered to be akin to cm …

- stip sum contract with lots of cash allowances …

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AIA [American Institute of Architects] equivalents Tab G

– akin to CCDC5A:AIA Document C132–2009

– akin to CCDC5B:AIA Document A133–2009 [with a Guaranteed Maximum Price]AIA Document A134–2009 [without a Guarantee Maximum Price]

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some advantages of cm

transpancy to the trades

fast tracking

design assist

direct control

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disadvantages of cm

pricing is “open ended”

(more on this – see slide below)

“will strive”

(more on this – see slide below)

“buck stops here” – with owner (see Hudson quote, below)

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pricing is “open ended”

Hudson’s on Building and Engineering Contracts:

“Most of these management contract arrangements, when examined in detail …appear to be little more than thinly disguised collective cost-plus contracts in their ultimate final effect …”

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“will strive”

old CCA 5 said:

“The Construction Manager, along with the Owner and the Consultant, … shall strive to achieve Substantial Performance of the Project by …[date]”

- as an assurance - underwhelming!

- even this meager assurance was not included in new CCDC templates!

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Supplementary Conditions for new CCDC:

The Construction Manager, along with the Owner and the Consultant, shall strive to achieve Substantial Performance of the Project by the target date specified therefor by the Owner in the preliminary Project schedule approved by the Owner as it may be varied or amended from time to time with the approval of the Owner.

[Substantial Performance of the Project – not even defined in new CCDC5A]

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Another factor – Ministries and MASH entities

- AIT, TILMA (New West Partnership Trade Agreement), and Core Policy Manual, CAMF Capital Procurement Audit Checklist etc.:

- question - with cm, does each trade contractor have to be posted on BC Bid, tendered etc.

- {might prefer hybrid model}

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Comparison – CCDC5A and CCDC5B

• CCDC 5A – for services

• CCDC 5B – for services and construction (i.e. “cm at risk” or “cm converting to stip sum”)

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Comparison – CCDC5A and CCDC5B – cont’d

Who do you want to enter into the contracts with the Trade Contractors?

• CCDC 5A – the Owner does …• CCDC 5B – the Construction Manager

does …

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Comparison – CCDC5A and CCDC5B – cont’d

Is the Construction Manager an agent or not? Must act in the best interests of the Owner?

• CCDC 5A – agent: See GC 2.1.4

• CCDC 5B – not agent. see GC 1.5.2

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changes – new CCDC5A/5B versus old CCA5

old CCA5 – cm was agent (see above)

“strive” – see above

CCDC5B now contemplates converting to stip sum (old CCA5 did not)

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changes – new CCDC5A/5B versus old CCA5- continued

Fees: time-based rates for personnel:

Old CCA5: time-based rates for personnel employed by the Construction Manager was under of “Reimbursible Expenses”

Now:– isolated as a separate heading – see paragraphs 5.2.3 and 5.3 on page 4 of CCDC5A.

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changes – new CCDC5A/5B versus old CCA5- continued

New CCDC5A:

chart listing services – must select and deselect services, and indicate – “how paid”

[Roy – open CCDC5A – demonstrate Schedule A1]

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changes – new CCDC5A/5B versus old CCA5- continued

- Own Forces Work – formerly Article A-7 of CCA5 - deleted under new CCDC5A

- could include Own Forces Work as “ADDITIONAL SERVICES” under SCHEDULE B1 of CCDC5A – need to remember to do this, if you want the right to require this (e.g. temporary work, trailers, etc.)

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changes – new CCDC5A/5B versus old CCA5- continued

Insurance

- Owner must maintain wrap policy for not less than $10mil.

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changes – new CCDC5A/5B versus old CCA5 – cont’d

GC 4.2.2 No deductions shall be made by the Owner from amounts payable to the Construction Manager other than those for which the Construction Manager is proven to be responsible …”.

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Keep in mind

PART 9 [INDEMNIFICATION AND WAIVER OF CLAIMS] - for colleges and institutes and universities not insured by CURIE, see requirements prescribed by Risk Management Branch.

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Keep in mind - continued

- payment certifier – see paragraph 3.1.1.17 of the General Conditions.

- note, whatever it says in the cm document, the actual operative document, for this purpose, is the actual agreement with each individual Trade Contractor (i.e. the CCDC17).

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Keep in mind - continued

Unlike architects and engineers (who are exempted under Section 4(6) of the Builders Lien Act), Construction Managers are not exempted. Under the Builders Lien Act, must holdback 10% form construction manager.

Also, unless an exempt entity, or if under the $100,000 threshold (applies to the improvement), must establish holdback savings account.

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CCDC17

Basically, the new CCDC17 updates the old CCA17 1996 to bring it in line with changes brought in with CCDC2 2008

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CCDC5B

Appendix for conversion – looks very much like Supplementary Conditions.

we’d be doing “Supplementary Conditions to the Supplementary Conditions”!

My inclinations would be – if you want “cm converting to stip sum”, use simple format of CCDC5A and go from there.

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Conclusion

The base documents have changed.

As before, can customize the base documents to get to where you need to be.

Underlying issues are still the same.

Need to update Supplementary Conditions for use with these forms.

THANK YOU

Questions or Comments:

Roy Nieuwenburg, Clark Wilson LLPran@cwilson.com | 604.643.3112

www.cwilson.com