The CCDC 2, developed in 2008 by the Canadian Construction Documents Committee (CCDC), has been the standard stipulated price contract used by the industry. However, because CCDC documents cannot be edited, it has become common practice to update the base documents with supplementary conditions. As a result, pages and pages have typically been added to CCDC contracts.
Late last year, the CCDC introduced the CCDC 2-2020, an updated version that attempts to address such matters. Construction law experts are now weighing in with their analysis and thoughts.
Douglas Sanders, Bill Woodhead and Gautam Dhillon of Canadian law firm BLG, write that one overall concern the CCDC has attempted to address is how various terms and conditions used by the industry have shifted the balance of risks in the contract onto contractors.
“The CCDC would prefer if parties did not need to use supplementary conditions. Introducing an updated CCDC 2 document is an attempt to reduce the need for modification.”
Yet, success remains a matter of judgement.
For example, included in the updated CCDC version are prompt payment and holdback release provisions that have been either already introduced through legislation or are under consideration in several provinces.
However, Glenn Ackerley, partner with WeirFoulds LLP, reminded the audience attending a recent Building Shows seminar that the CCDC is national in scope. Therefore, although this type of legislation is expanding across the country, it can’t specify any one province’s provisions.
“This has to work across the country.”
On the other hand, Ackerley points out the new CCDC version does set out a list of actual and direct costs concerning what change directive work entitles contractors to reimbursement, if directed by the owner.
Provincial jurisdictional variants also hinder the use of specific language when requiring evidence of compliance with workers’ compensation legislation and accompanying declarations by contractors regarding the distribution made of the amounts.
The end result may not be as a streamlined as first contemplated.
As Sanders, Woodhead and Dhillon explain, “While the newest version of CCDC 2 updates several commercial terms to address common modifications and recent legislative changes, it does not address many of these amendments, and some of the changes introduced may drive a need for additional clarifications.”
Therefore, they conclude that “supplementary conditions will likely remain an important tool for owners and contractors alike.”
One new important change noted by BLG relates to Ready-for-Takeover and Early Occupancy.
“The CCDC 2-2020 introduces the concept of ‘Ready-for-Takeover’ as a new milestone for completion of the work,” occurring when various conditions are satisfied and confirmed by the consultant.
Owners are now also permitted to take early occupancy of all or a part of the work before it is ready-for-takeover. However, since responsibility for the work then passes to the owner and the warranty period begins, BLG suggests that parties should, “clarify how this warranty period will function for those portions of the work still being used by both the owner for early occupancy and contractor to complete the work, such as elevators.”
The CCDC 2-2020 has been updated to require the “prime contractor” and owner to jointly comply with both health and safety legislation and the precautions and programs established at the place of the work by the contractor.
As Ackerley explains, “Liability, the contract says, is up to the legislation. So the contract doesn’t have to actually determine who is responsible under the statute from a liability perspective. But from a practical perspective, it spells out that the contractor is responsible for establishing the safety programme.”
There will be an inevitable transition period. Ackerley believes the 2008 version will be available for use throughout this year while people transition over to the 2020 version.
“For a while, you will have to check and see which of the two CCDC versions are being used by a tender calling authority, for example.”
It is advised that parties contemplating using the CCDC 2-2020 and any associated supplementary conditions seek legal advice regarding their use and modification.
John Bleasby is a Coldwater, Ont.-based freelance writer. Send comments and Legal Notes column ideas to editor@dailycommercialnews.com.
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