By Scott Lamb and Kim Do

This summer, the Canadian Construction Documents Committee (CCDC) released the CCDC 30 – 2025, the revised standard form contract for Integrated Project Delivery (IPD). Construction professionals will recall this contract breaking ground when it was first released, introducing a standard form contract intended to encourage cooperation, rather than competition for a contract structure that provided for owners, consultants, contractors, and key trades to signing one contract, pooling profit, and sharing in both risks and rewards.

Since the CCDC 30 was first released in 2018, projects across Canada have tested the model. Key updates now reflect years of practical experience in Canada and introduce changes that make the model clearer, and more practical and aligned with today’s construction landscape. They include a structure organized around the natural phases of a project (from validation through to execution and general conditions), as well as refinements to financial provisions such as to reimbursable costs, overhead rules, and audit requirements.

The changes are intended to make IPD more approachable, transparent, and effective. However, as in the past, owners and contractors will continue to need to adjust these terms through supplementary conditions to tailor their contracts to the project and party needs.

Further, IPD is a contract structure that requires careful review as to its suitability for a construction project and an understanding of the inherent risks in using this contract model.

We have set out below a summary of some of the key updates and how construction professionals can prepare for these changes.

Key Updates

Structure

One major change to the CCDC 30 is the reorganization of the contract, which now follows the project lifecycle and is reorganized in the same order as a project would be itself, making the contract easier to read and apply, as follows:

• Validation: The team collectively develops a Validation Report, establishing the Base Target Cost, project schedule, and risk profile. The owner can then choose to proceed, adjust, or withdraw.[1]
• Project Execution: This phase governs design, procurement, construction, and warranty phase tasks. Here, the Target Cost is finalized, the owner can approve value-added items, and there is the new Ready-for-Takeover milestone taken from the CCDC 2 – 2020 which triggers the various clocks running for matters such as when occupancy begins and warranties commence.[2]
• General Articles: These provisions, further explained below, address reimbursable costs, payment, and contract documents and have been updated to align with prompt payment regimes across Canada (though not yet in BC) and provide stronger audit rules.[3]
• General Conditions: These provisions address other general conditions, including insurance, project structure and responsibilities, payment procedures, dispute resolution, liability and termination.[4]

Collaborative Framework and Financial Clarity

As noted above, key updates include updated provisions regarding cost, profit, and audits. Specifically, terms have also been renamed, such as the Risk Pool (now the Profit Pool).[5] The CCDC 30 now also recognizes Lean construction practices by explicitly referencing Lean methods.[6] For the IPD Advisor, the CCDC 30 acknowledges that culture and process expertise can be as important, as these optional advisors can, among others, help guide teams unfamiliar with the IPD approach.[7]

Finally, the CCDC 30 updates and addresses financial clarity. Provisions regarding reimbursable costs[8], overhead categories[9], and audit procedures[10] are now intended to be more clearly defined, reduce uncertainty, and limit disputes.

Conclusion and Takeaways

Overall, the new CCDC 30 – 2025 is intended to address a developing IPD model in Canada. By aligning the contract with the natural phases of a project, strengthening financial transparency, and reinforcing collaborative behaviours, these updates are intended to make IPD more accessible while maintaining goals on shared risk and reward.

Early familiarization with these updates will help construction professionals manage projects more effectively and reduce the risk of disputes. However, it must be remembered that IPD succeeds only when participants commit to transparency and collaboration. That includes, among others, owners treating the Validation Phase as a decision point and not a box-ticking exercise and teams committing to maintaining an effective “Big Room” culture where problems are uncovered early and solved collectively. CCDC 30 is a framework only. It is not a magic formula.

In this regard, it is important to emphasize that IPD has significant characteristics that differ from usual construction contracting that require very careful analysis and understanding before this model of contracting can be used. For example, under IPD where all of the parties share in the risk of the profit pool, if during the project cost overruns eliminate the profit pool, then the owner is still liable for the cost of the project to completion and is precluded from legal action to recover excess costs over the project budget from those parties who are responsible for project cost overruns.

In short, IPD contract structures, including CCDC 30, are not appropriate for all construction projects and the risks for such contract structure must be carefully evaluated.

Further, in using the IPD model, the standard CCDC 30 is just a starting point. Owners and contractors will continue to need to adjust these contractual terms through supplementary conditions to adapt the contracts to the needs of specific projects, market conditions, and the parties’ requirements.

If you have any questions or concerns regarding the review or preparation of these contracts, or any other construction-related legal matter, please contact our Construction group.

[1] See Segment A  – Validation of the Articles in CCDC 30; including A-1 Validation General, A-2 Validation Phase Tasks, A-3 Validation Report, and A-4 Termination Due to Failure to Achieve Validation.

[2] See Segment B – Project Execution of the Articles in CCDC 30, including B-1 Project Execution General, B-2 Design/Procurement Phase Tasks, B-3 Construction Phase Tasks, and B-4 Warranty Phase Tasks; see also Article B-3 of CCDC 30.

[3] See Segment C – General Articles of the Articles in CCDC 30, including C-1 General, C-2 Contract Documents, C-3 Added Value Incentive Items, C-4 Profit Pool, C-5 Reimbursable Costs, C-6 Payment, C-7 Agreements and Amendments, C-8 Receipt of and Addresses for Notices in Writing, C-9 Receipt of and Addresses for Other Notices Involving the SMT and PMT, C-10 Language of the Contract and C-11 Succession.

[4] See General Conditions of CCDC 30.

[5] See Article C-4 of CCDC 30.

[6] See e.g., at A1.4.1 or GC 2.1.1 of CCDC 30.  Lean methods refer to a set of design and construction principles and tools that focus on collaboration, respect and continuous improvement with the goal of maximizing value and eliminating waste.

[7] See e.g., at A1.3.2 or GC 3.2.4.1 of CCDC 30.

[8] See e.g., Article C-5 or Schedule B – Reimbursable Costs of CCDC 30.

[9] See e.g., Article C5.2 of CCDC 30.

[10] See e.g., GC 1.6.4 of CCDC 30.

 

This article was originally published in Construction Business magazine. It is republished on the Clark Wilson website with permission from Construction Business magazine.