In publishing a supplement to the standard CCDC 2-2020 contract, the associations representing Ontario’s architects and general contractors are ensuring their members’ needs are being addressed in a world of ever-increasing contract complexity, lawyers who worked on the documents explained recently.
On Nov. 5, the Ontario Association of Architects (OAA) and the Ontario General Contractors Association (OGCA) released their joint collaboration, Recommended Supplementary Conditions for the Stipulated Price Contract – CCDC 2-2020.
The document is available on both the OAA and the OGCA websites, along with a new Practice Tip outlining its use.
Giovanni Cautillo, OGCA president, stated in a release, “By working with our colleagues at OAA, we are able to save our members valuable time and money that would otherwise go into contract negotiation.”
Construction lawyer Annik Forrestal, partner at McMillan who consulted with the OGCA and the OAA on the supplement, stressed the CCDC 2-2020 is an “excellent” document and by no means deficient, and the supplement is needed as an additional resource for participants from the contractors and architectural sectors to meet specific project needs.
“It’s just another resource, where industry has collaborated and worked together to address the complicated matter of these projects,” said Forrestal. “It’s not that the CCDC has failed at that whatsoever. They set an excellent example of industry working together across the country to do that. The CCDC terms are a great standard and reference points for that fair and balanced risk allocation.”
Discussion between the OAA’s Practice Advisory Services committee and OGCA began in late 2019 after the release of the final draft of CCDC 2-2020 by the Canadian Construction Documents Committee.
“The language included in these supplementary conditions has been crafted in a way to make sure that the interests of both the contractors and architects are fairly and reasonably balanced,” said Forrestal.
“I don’t think that there’s any supplementary conditions or any standard form contracts that can be a perfect one-size-fits-all for a project. We all have to think about who’s involved and how we want to allocate those risks.”
Among highlights of the recommended conditions, the supplement provides that, in the event of arbitration between an owner and contractor, the consultant will receive notification, including any issues that may involve the consultant. At that time, the consultant may choose to become a full party to the arbitration.
A summary states, “The OAA continues to have serious concerns that where the architect is excluded from the arbitration process, they may be unable to defend their position and in effect is tried in absentia.”
“It’s important (to add) those dispute resolution provisions that provide for inclusion of the consultants in dispute resolution provisions or proceedings where they have a vested or contingent financial interest,” said Forrestal.
The supplement also includes recommendations for indemnification of the consultant and the contractor’s standard of care and offers clarification of new ready-for-takeover and early-occupancy clauses.
Geza Banfai, counsel with McMillan who was part of the working group that developed CCDC 2-2020, explained the CCDC 2 form is a generic template, intended for use by a wide variety of stakeholders across Canada. Supplementary conditions are commonly and customarily used to align the terms of the standard form with what some users perceive as their particular needs, he said, addressing the need for supplementary conditions.
“CCDC 2 identifies literally hundreds of discrete aspects of risk and responsibility as between owners and contractors using design-bid-build, and allocates those as between the parties in a fair and balanced manner,” stated Banfai in an email.
“It is replete with a great many principles of risk identification and allocation that most people agree upon most of the time.”
If the CCDC was required to meet every need of every stakeholder every time, it would quickly be paralyzed into deadlock, Banfai said, and the industry benefits of its balanced approach to risk allocation and the standardization of language and practices would be lost.
“Supplementary conditions reflect the proclivities, and occasionally the idiosyncrasies, of the people seeking them. Reasonable people can debate their necessity and their efficacy, and to some extent that debate undoubtedly took place between the OAA and the OGCA as their document was prepared.”
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