ExAC Textbook Preview

The choice of delivery method is one of the most consequential early decisions on any project. It affects cost certainty, schedule, risk allocation, and the architect's role throughout. The delivery method should be identified in pre-design or schematic design — changing it late in document production (e.g., switching from stipulated price to construction management after Design Development) causes significant additional work and cost.

The three primary variables driving delivery method selection: (1) Cost certainty — how well scope and cost can be defined early; (2) Schedule — whether fast-tracking or design-construction overlap is needed; (3) Risk tolerance — who (owner, contractor, designer) is best positioned to absorb uncertainty.

Delivery Method Selection — When to Use Each:

• Design-Bid-Build (CCDC 2): Fixed budget, defined program, no schedule urgency, public accountability requirement for competitive tendering. Best when design can be fully completed before construction starts.
• Design-Build (CCDC 14/15): Repetitive project types (prototype retail, schools, warehouses); owner's program is well-defined in an RFP; speed and single-point responsibility are priorities. Less appropriate for unique, complex buildings where qualitative design control is critical.
• CM Agency — CCDC 5A: Sophisticated owner with in-house capacity; wants direct trade relationships; phased tendering; maximum transparency without transferring trade risk.
• CM at Risk — CCDC 5B: Fast-track schedule required; design and construction must overlap; owner wants single point of accountability; GMP provides cost certainty despite incomplete design at construction start. Classic application: hospital expansions, complex phased projects.
• Cost Plus (CCDC 3): Emergency or disaster recovery; renovation/restoration where hidden conditions make fixed pricing impossible; trusted contractor relationship; small highly specialized projects. Never appropriate where scope is definable and competitive tendering is feasible.
• Unit Price (CCDC 4): Civil engineering / site work — roads, grading, underground utilities, earthworks — where quantities cannot be known in advance but the unit of work is well-defined.
• P3 / AFP: Large public infrastructure ($100M+); government wants 30-year lifecycle accountability; private sector financing and maintenance obligations; positive Value for Money (VfM) analysis required. Too expensive to procure for small projects.
• IPD (CCDC 30): Large, complex, technically integrated projects (hospitals, research labs); pre-existing trust between owner, architect, and contractor; intensive BIM environment; owner willing to share risk and reward.

CCDC-2 (Stipulated Price Contract): Most common fixed-price contract. Price established through bidding (open or invited). Fixed price/time can only be adjusted by Change Orders. Maximum profit for contractor who also assumes maximum risk. Use when costs are reasonably predictable and full documentation is available. Structure: Agreement (A-1 to A-8) → Definitions (26 terms) → General Conditions (Parts 1–12). CCDC 2 implicitly requires fully complete and coordinated documents — because the contractor commits to a fixed price based on the documents provided, any significant incompleteness entitles the contractor to a Change Order.

CCDC-3 (Cost-Plus Contract): Contractor compensated for actual costs + fixed sum or percentage. Owner reimburses allowable costs; work may cease when construction costs equal funds provided. Appropriate for small, complex projects where total costs are hard to determine. Variation: Cost-Plus with Upset Price/GMP (Guaranteed Maximum Price) — maximum price can only be adjusted by Change Order. Cost Plus Fixed Fee: fee is a lump sum — no incentive to inflate costs. Cost Plus Percentage Fee: fee is a % of total costs — creates a financial incentive to allow costs to rise (use with caution).

CCDC-4 (Unit Price Contract): Contractor paid predetermined price per unit or quantity of work or material. Price derived through bidding or negotiation. Actual quantities verified by independent inspection, clerk of works, or quantity surveyor. Primarily used for civil engineering works (roads, site preparation, underground utilities, earthworks). Bid documents include a Schedule of Quantities with estimated quantities — the apparent low bidder at tender may not be lowest at final completion if quantities vary significantly.

CCDC 5A (Construction Management Contract — for Services): Governs the relationship between the Owner and a Construction Manager (CM) acting solely in an agency or advisory capacity — the CM does not hold the trade contracts. The CM provides management and coordination services only; all trade contracts are held directly by the Owner. Used when the Owner wishes to maintain direct contractual relationships with trade contractors while benefiting from the CM's expertise in scheduling, procurement, and site coordination. The CM's fee is typically a fixed amount or percentage of construction costs. Because the Owner holds the risk on trade contracts, this form is best suited to experienced owners with sufficient in-house capacity.

CCDC 5B (Construction Management Contract — for Services and Construction): Similar in structure to CCDC 5A, but the Construction Manager also holds the trade contracts directly (acting as constructor as well as manager). This transfers more risk and contractual responsibility to the CM. The Owner benefits from a single point of accountability for both management and construction execution. Best suited for fast-track or phased projects where design and construction overlap, and where the Owner prefers not to manage multiple trade contracts directly. The CM's compensation typically includes a fee for services plus reimbursement of construction costs; often used with a GMP established once design is sufficiently advanced (typically Design Development).

CCDC 14 (Design-Build Stipulated Price Contract): Owner and Design-Builder agree to a fixed lump sum for design and construction. Scope must be well-enough defined in the RFP/Owner's Program to permit a firm price. Best when owner's functional program is clear and the project type is repetitive or well-understood. The architect is sub-contracted to the Design-Builder, not the owner.

CCDC 15 (Design-Build Services and Construction — Cost-Plus): Design-Builder compensated for actual costs plus fee. Used when scope is not well-defined at the time of contract award, or when an early construction start is needed before design is complete.

CCDC 17 (Stipulated Price Contract for Trade Contractors): Used for direct trade contracts under a CM arrangement (CCDC 5A/5B) or multi-prime delivery. The Owner or CM holds individual stipulated price contracts with each trade contractor using this form.

CCDC 30 (Integrated Project Delivery Contract): Multi-party agreement signed by the owner, architect, and key trade contractors. All parties share risk and reward based on project outcomes (Target Cost). If delivered below target, savings are shared; if above, all parties share losses up to a defined limit. Designed for large, complex, BIM-intensive projects with genuine collaborative commitment from all parties.

Each CCDC contract is divided into: Agreement between Owner and Contractor; Definitions; General Conditions; followed by Contract Documents.

Purpose of CCDC Documents: Ensure clarity of purpose between client, consultant and contractor. Written for the protection of all parties in an unbiased manner.

Methods of awarding a construction contract:

• Open Competitive Bids (Public Tender Call): Bidders not pre-screened; notice advertised in newspapers; used when project involves public funds
• Invited Competitive Bids (Invited Tender Call): Based on previous satisfactory experience or pre-qualification; used for small projects, private clients, or specialized expertise
• Direct Selection: Owner negotiates with one contractor, usually based on established trust; leads to Stipulated Price (CCDC-2), Cost Plus (CCDC-3), or Construction Management contracts

Stages of Design-Bid-Build tendering:

• 1. Call for tenders (open, invited, or direct selection) — notice placed in newspapers and construction journals
• 2. Contractor leaves deposit and picks up drawings, specifications, and any addenda
• 3. Addenda issued in writing to all bidders — maximum 4 days prior to bid closing date
• 4. Bids received and stamped with time of delivery — late bids returned unopened
• 5. Analysis of bids by Architect and client: completeness, inclusion of all addenda, proposed start date and schedule, sub-contractors, alternatives, unit prices, separate prices
• 6. Typically, lowest bona-fide bid is selected
• 7. Contract Award — Letter of Acceptance; notification of unsuccessful bidders to pick up deposits
• 8. Construction Contract prepared by Prime Consultant (e.g., CCDC-2); documents should be bound and sealed

Bonds:

• Bid Bond: Guarantees that if bid is accepted, contractor will enter into formal contract with owner. If contractor fails, surety pays the difference between contractor's bid and next contract price (typically 5–10% of estimated construction cost)
• Performance Bond: Indemnifies owner up to the bond amount in the event of contractor default, covering additional costs beyond the agreed contract amount (often 50% or 100% of contract amount)
• Labour and Material Bond: Guarantees that claimants (sub-contractors, sub-trades) with direct ties to the contractor will be paid for labour and materials on the project

Bid types: Formal bid (correctly submitted); Qualified Bid (may not be in strict accordance with instructions); Informal Bid (incomplete, late, unsigned, or lacks required documentation/security).

Role of Construction Associations and Bid Depositories: Disseminate bid documentation, information, and addenda; promptly collect trade contractor bids for multiple-trade projects; distribute sub-contractor bids to general contractors; follow strict rules to minimize confusion, limit bid shopping, and make all information available to all registered members.

Per RAIC Document 6, the Architect "assists and advises the Client in obtaining and negotiating proposals, and in awarding and preparing contracts for construction."

The Architect analyses bids for: completeness; bid amount + applicable taxes (HST, QST); inclusion of all addenda; proposed start date and schedule; alternatives; sub-contractors listed (with reference follow-up); unit prices; separate prices; manufacturers and suppliers listed.

The Architect should report in writing the findings of the bid analysis and recommend a course of action to the client.

Cost information types in bid documents: Alternate Prices (evaluated for best overall value — lowest combination of Base Bid and acceptable alternates is normally chosen); Separate Prices (work added to or deducted from base bid — not included in base bid); Itemized Prices (costs for specific items, for information only); Unit Prices (for hidden or indeterminate work — not included in base bid).

If only one bid is submitted, the Architect should advise the client to return the bid unopened or to negotiate. A submitted bid is a legally enforceable contract and cannot be withdrawn during the period of irrevocability provided by a Bid Bond.

Understanding why a delivery method is selected — not just the method itself — is essential for the ExAC. The following scenarios are representative of the reasoning tested in exam questions.

Two services specifically listed in RAIC Document Six Schedule A are to "Assist Client with Pre-qualification of Bidders" and "Assist Client in Calling for Bids." These services may be extensive or minimal depending on the client's own expertise in construction procurement. The architect should always be cognizant that contractors, trades, and suppliers invest significant resources in creating bids — ensuring a fair and transparent process for all is paramount to maintaining professional respect in the industry.

Calling bids and awarding the construction contract must follow strict rules. Deviation from accepted tendering practices can result in violations of Canadian common law associated with tendering and bidding. Planning the procurement method should start early in the project to avoid rework and schedule delay — changing from a stipulated price contract to construction management near the end of document production causes significant additional work.

In a pre-qualification process, the owner (supported by the architect and engineers) gathers information about contractors to ascertain capability and experience. Pre-qualification may include:

• Company information: ownership, when established, construction capacity by annual gross revenues
• Resumes for key project personnel
• Demonstration of capability through successfully completed similar projects
• Project management methodology
• Safety records (insurance claims, injury claims)
• Environmental policy, employment diversity, social responsibility

Pre-qualification has pitfalls — architects must establish and use clear and transparent criteria when selecting or eliminating contractors to avoid allegations of favoritism. Once pre-qualified, bidders should be considered equally competent and the contract awarded to the lowest compliant bidder; pre-qualification criteria should not be re-applied when selecting the successful bidder.

The traditional privilege clause — "The lowest or any tender shall not necessarily be accepted" — is no longer appropriate. A Supreme Court of Canada decision from April 1999 established that owners are expected to award a contract in accordance with the terms and conditions of the tender call and not to provide an unfair advantage to any bidder. A privilege clause does not permit the owner to accept a non-compliant bid. Accepting a non-conforming bid is considered a breach of the duty of fairness to all other bidders.

The bid documents must explicitly state: the requirements for a compliant bid; whether bids may be withdrawn and under what circumstances; whether and to what extent pre-award negotiations will be permitted; and all criteria for selection of the successful bidder.

The bid package typically includes (at minimum): project description; instructions to bidders; information available to bidders; bid form and bid form supplements; agreement; definitions; general conditions; supplementary conditions; Division 1 General Requirements; technical specifications; schedules; drawings; and addenda. The excessive use of supplementary general conditions should be avoided — modifications to CCDC standard forms should be kept to a minimum and only after thorough review.

Supplementary conditions should be limited to aligning the contract with project-specific context (e.g., security clearance requirements, extraordinary site safety protocols). They should not change the nature of the owner-contractor relationship or transfer undue or unmanageable risk from one party to another.

• Issue complete, not partial, sets of bid documents at all times
• Distribute to: construction association plan rooms; electronic tendering services (Biddingo, Merx, buyandsell.gc.ca, bidsandtenders.ca); all registered bidders and their subtrades
• Limited access or too few printed/electronic sets reduces subtrade and supplier exposure, reducing competition and the quality of bids received
• Printing drawings and specifications is a reimbursable expense — client-architect agreements should not stipulate a minimum number of included sets
• Tracking distribution of bid documents and addenda is essential; a bid documents distribution list should be maintained

When architects and engineers discover inconsistencies, omissions, or items requiring clarification, or when the client requests minor changes, addenda must be issued. Addenda procedures:

• Issue new information only in writing to all bidders, construction associations, bid depositories, the client, consultants, and authorities
• All addenda must be: identified by project name and number; sequentially numbered and dated; issued in logical order following the sequence of the original bid documents; precise about what is original and what has been added, deleted, or changed
• Engineering addenda must be forwarded through the architect, with numbering integrated into the architect's system
• Each addendum becomes part of the contract documents when the construction contract is executed
• All bidders must base their bid on the same information — never provide clarification to one bidder without issuing an addendum to all

After bid closing, the architect analyzes bids for compliance and arithmetic, checks that all addenda have been acknowledged, and verifies that the bid bond or other security is in order. The architect then prepares a bid analysis report with a recommendation to the client. The lowest compliant bid is generally recommended, but the architect must advise the client in writing if there are compliance concerns or if a bid appears unrealistically low.

When the lowest compliant bid exceeds the budget, the architect and client have options: proceed with the project at the higher cost; reduce scope; re-tender with a modified scope; or abandon the project. If the architect re-tenders, RAIC Document Six requires that the architect revise the construction documents and administer a new tender call at no extra fee — this is a direct contractual obligation.

CCDC 23 governs the lowest-bid selection method — the most common contractor selection method under the traditional design-bid-build delivery system. It covers the entire process from preparing bid documents through contract award.

Canadian law (rooted in the Supreme Court's 1981 Ron Engineering decision) recognizes two distinct contracts in every competitive bid process:

• Contract A — Bidding Contract: Formed when each compliant bid is submitted. Obligates the Owner to: treat all bidders fairly and equally; disclose all information relevant to the bid; apply only disclosed criteria; not vary from the rules after bid closing (e.g., cannot accept a late bid or apply undisclosed preferences).
• Contract B — Construction Contract: Formed when the Owner formally accepts a bid. Obligates the successful bidder to perform the work in accordance with the Contract Documents.

• Bidding Requirements (Contract A terms): Introductory Information · Bid Solicitation · Instructions to Bidders · Information Available to Bidders · Bid Form · Bid Form Supplements
• Contract Requirements (Contract B terms): Agreement · Definitions · General Conditions · Supplementary Conditions · Division 1 General Requirements · Technical Specifications · Schedules · Drawings

The project manual must be organized per MasterFormat. Addenda can modify either category and take precedence over the original Bid Documents.

• Open (Public) Bid Call: Publicly advertised. Required for most public-sector contracts above a threshold value (Agreement on Internal Trade). Any qualified contractor may bid.
• Invitational Bid Call: Short list of 3–6 pre-selected contractors. May be preceded by a formal prequalification process using CCDC 11. Prequalification criteria must be disclosed to all respondents. Prequalification criteria must not be applied a second time when selecting the successful bidder.

• Four weeks is considered reasonable for most moderately complex projects
• Bid-calling authority should consult local construction associations before setting or changing the closing date
• Afternoon closings are customary; avoid the day immediately preceding or following a non-working day
• Any extension of bid closing date must be communicated by addendum as early as possible

Any new information that changes or supplements the Bid Documents must be issued as written addenda only, made available simultaneously to all bidders. No oral responses, letters, memos, "clarifications" or "confirmations" are acceptable substitutes during the bid period. All addenda must be consecutively numbered and dated. Only modifications that significantly affect bid price or schedule should be issued; minor changes should wait until after contract award.

• All bids received at a single designated location with an authorized person present to time-stamp envelopes; a visible synchronized clock must be in place
• Late bids must always be returned unopened — marked "Late Bid — Unopened"
• Bid modifications permitted before closing, not after; bidder withdrawal also permitted before closing if irrevocability period has not yet begun
• Bids opened immediately after closing time; bidder representatives may attend; bid prices and security confirmation are announced
• Reverse auctions are prohibited for construction procurement — they violate bid confidentiality principles

Only compliant bids may be considered for award; non-compliant bids must be rejected. The Instructions to Bidders should pre-specify the Owner's response to common irregularities (e.g., "late bids will be rejected;" "missing bidder signature on bid bond will be waived").

If a genuine, significant mistake is found in the lowest compliant bid, the bid should generally not be accepted — even if the Owner has a legal right to enforce it. Forcing an unwilling contractor to perform substantially increases risk of unsatisfactory work and is not in the Owner's best interests.

• Stipulated Price Bid Form: Single fixed price stated once in figures only, excluding VAT. Used with CCDC 2.
• Unit Price Bid Form: Schedule of unit prices × estimated quantities. Actual contract price determined by measured quantities. Used with CCDC 4.
• Combined Stipulated and Unit Price Bid Form: Recommended when unit prices are needed under a stipulated price contract. Both components summed to determine the lowest bidder.

• List of Subcontractors: Only major work items with significant dollar value should be required. Mandatory when using a bid depository.
• Alternative Prices: Bid Documents must always disclose whether alternatives will or will not be considered in determining the lowest bidder. Failing to disclose this is unfair. Bidder-identified alternatives should never be considered in lowest-bid selection (prevents "apples-to-oranges" comparisons).
• Itemized Prices: For information only; do not affect bid evaluation. Best practice: require only the lowest bidder to submit them after bid closing.

CCDC 2 is the standard Canadian stipulated price contract for use when the scope of work is clearly defined, permitting a fixed price bid. It is the preferred contract under design-bid-build. Structure: Agreement (A-1 to A-8) → Definitions (26 terms) → General Conditions (Parts 1–12).

In case of conflict, from highest to lowest: Agreement → Definitions → Supplementary Conditions → General Conditions → Division 1 Specifications → Technical Specifications → Material/Finishing Schedules → Drawings. Later-dated documents take precedence over earlier documents of the same type. Larger-scale drawings govern over smaller-scale drawings of the same date.

• ✓ Visits site at intervals appropriate to construction progress; assesses general conformity with Contract Documents
• ✓ Issues certificates for payment based on evaluation of Contractor's applications
• ✓ Reviews Shop Drawings for conformity to design concept and general arrangement only
• ✓ Issues Supplemental Instructions, Change Orders, Change Directives, and progress payment certificates
• ✓ Conducts review to determine date of Substantial Performance
• ✗ NOT responsible for construction means, methods, techniques, sequences, or safety precautions (sole Contractor responsibility)
• ✗ Certificates do NOT guarantee Work is correct or complete — only to best of Consultant's knowledge
• ✗ NOT responsible for Contractor's failure to carry out Work per Contract Documents

• Change Order: Both Owner and Contractor sign. Used when agreement on price and time is reached. Contractor cannot perform a change without a Change Order or Change Directive.
• Change Directive: Owner signs only. Used to proceed BEFORE agreement. Valued on actual cost basis: net increase → cost + Contractor's percentage fee; net decrease → cost reduction only (no fee adjustment). Contractor must keep full detailed accounts for documentation.
• Concealed or Unknown Conditions (GC 6.4): Written notice required within 5 Working Days of first observance of materially different conditions, before disturbing them. Consultant investigates and issues instructions for appropriate compensation.
• Delay Claims (GC 6.5): Notice in Writing of cause of delay must be given within 10 Working Days after commencement of delay.
• Claims for Change in Contract Price (GC 6.6): Consultant findings issued within 30 Working Days of receipt of claim. If not acceptable, proceeds to dispute resolution.

• Owner gives Contractor Notice in Writing of default → Contractor has 5 Working Days to correct (or begin correction with an acceptable schedule)
• If default not corrected: Owner may correct and deduct cost, or terminate Contractor's right to continue
• Contractor may suspend or terminate if Owner fails to pay, fails to show financial evidence, or is adjudged bankrupt → Contractor gives 5 Working Days notice

Three-stage escalating process: (1) Consultant's Findings (must be disputed within 15 Working Days or deemed accepted) → (2) Negotiation and Mediation (Project Mediator appointed within 20 Working Days of contract award per CCDC 40 Rules) → (3) Arbitration (per CCDC 40; conducted in jurisdiction of Place of Work). Most disputes held in abeyance until Substantial Performance unless immediate arbitration is requested.

• Owner is deemed to have control and management of the Place of Work with respect to existing hazardous conditions
• Owner must provide written list of known toxic/hazardous substances and their locations prior to commencement
• Owner responsible for disposal of pre-existing hazardous substances
• If Contractor encounters undisclosed hazardous substances: must stop work immediately and report in writing to Consultant and Owner; Owner retains independent expert to investigate

• Standard warranty: one year from the date of Substantial Performance
• Extended warranties: responsibility of warrantor (manufacturer), not Contractor; Contractor's obligation limited to obtaining the warranty
• Claims at or before Substantial Performance: Notice in Writing no later than 6th calendar day before expiry of lien period
• Claims after Substantial Performance: Notice within 395 calendar days of Substantial Performance
• Substantial defect claims: within 6 years of Substantial Performance (where limitation statutes permit)

• General Liability: $5M/occurrence; $5M aggregate for completed operations; Consultant and Owner named as additional insureds
• Automobile Liability: $5M inclusive per occurrence
• Broad Form Property Insurance: minimum 1.1× Contract Price
• Boiler and Machinery Insurance
• Contractors' Equipment Insurance
• Standard exclusions from broad form property: Asbestos, Cyber Risk, Mould, Terrorism