CSTN 2380 – Construction Contract Documents Study Notes

Introduction to Construction Contract Documents

• Material derived from the Canadian Construction Document Committee guides and contracts used in this course.

Learning Objectives

• Enable students to:

  • Describe and evaluate the strengths and weaknesses of CCDC 2, the Design-Bid-Build (DBB) delivery method.

  • Identify the roles involved in the DBB delivery method.

  • Understand the key roles specified in CCDC 2.

  • Illustrate and describe the overall delivery model.

Design-Bid-Build Contracts

• CCDC 2 is classified as a Stipulated Price Contract; it will serve as a reference throughout this course.

• Alternative names for CCDC 2 include:

  • Lump Sum Tender

  • Traditional Delivery

  • Design-Bid-Build

Overview of the Design-Bid-Build Delivery Method

• In the Design-Bid-Build (DBB) process:

  • The Owner employs a Consultant to design the project and represents the Owner throughout its execution.

  • Upon completion of the design, the project is put out to tender.

  • A contract is awarded to the Contractor that submits the lowest price while meeting bidding requirements.

Characteristics of Design-Bid-Build

• It is recognized as the traditional delivery model.

• The contractual relationships are as follows:

  • The Owner holds a contract with the Consultant.

  • The Owner enters into a separate contract with the Contractor.

• Notably, there is no direct contractual relationship between the Contractor and the Consultant. Nevertheless, a collaborative working relationship is necessary since the Consultant acts as the Owner's representative.

Key Characteristics of Design-Bid-Build

• The separation of responsibilities:

  • Design and construction tasks are handled by different entities.

  • The design must be fully completed before bidding occurs.

  • Project scope and quality details are clearly defined.

• The Owner’s involvement:

  • High engagement is expected during the design phase and before the contract award.

  • Owner involvement may diminish during the construction phase.

Roles within CCDC 2

• The Owner:

  • Responsible for funding and utilizing the project upon completion.

  • Signs a contract with the Consultant for project design and another contract with the Contractor for construction.

• The Consultant:

  • Tasked with the design aspects of the project.

  • Acts on the Owner's behalf and certifies payments.

  • Reviews construction progress and evaluates submittals.

• The Contractor:

  • Responsible forExecuting construction of the project.

  • Has a direct contractual commitment with the Owner and also manages contracts with Subcontractors.

  • Oversees construction operations and schedule management.

Cost of the Work

• The Design-Bid-Build delivery system operates under a stipulated price framework:

  • Once the Owner accepts a bid, the agreed-upon construction price remains final, provided no changes to the project scope are made.

  • Cost overruns are absorbed by the Contractor, while any cost savings directly benefit the Contractor.

Financial Implications of the Cost Structure

• This delivery framework offers significant cost certainty for the Owner:

  • The Contractor assumes the risks associated with potential cost overruns.

  • Any modifications requested by the Owner will adjust the contract total accordingly.

  • The Contractor is not obligated to disclose financial records to the Owner.

Schedule of the Work

• The Contractor is responsible for creating and managing the project schedule:

  • The contract stipulates explicit start and finish dates as outlined in Article A-1.

Review of Learning Objectives

• Recap of key learning goals:

  • Describing and evaluating the strengths and weaknesses of CCDC 2 and the Design-Bid-Build delivery method.

  • Identifying roles and responsibilities within the DBB framework and understanding key positions outlined in CCDC 2.

  • Illustrating and describing the overall delivery model, reinforcing the course objectives.