Construction delivery and contract administration

From choosing a delivery method to closing out the contract: delivery models, contract forms, tendering, scheduling, changes, payment and handover.

By the end you will be able to

  • Compare design-bid-build, design-build, construction management and IPD
  • Explain stipulated price, cost plus and unit price contracts
  • Describe how tendering works in Canada (Contract A and Contract B)
  • Read a CPM schedule and use a look-ahead to remove constraints
  • Choose the right instrument: RFI, supplemental instruction, change directive or change order
  • Explain progress payments, holdback and prompt payment in Ontario
  • Distinguish substantial performance from Ready-for-Takeover

Prerequisites: none. Who it is for: Project coordinators, junior PMs, site staff, designers moving into construction administration, and BIM/VDC staff who need the contract context. Canadian practice first.

Your progress0 of 7 modules

Saved only in this browser.

  1. Module 1Choosing how to deliver the project

    Delivery methods decide who designs, who builds and who carries which risks.

    • Design-bid-build (DBB)
      Design first, then tender, then build. The owner hires an architect and engineers to finish the drawings, contractors compete on price for those drawings, and the winner builds them.
    • Design-build (DB)
      The owner hires one team that both designs and builds. If there is a problem with the drawings, it is the design-builder's problem to solve, not the owner's.
    • Construction management (CM)
      Instead of hiring one builder after the design is finished, the owner brings a construction manager onto the team while the design is still being developed. The construction manager then splits the work into trade packages, tenders them and runs the site.
    • Integrated project delivery (IPD)
      In IPD the owner, architect, engineers and contractor sign one contract together and win or lose as a group. That gives everyone a reason to solve problems together instead of protecting their own scope.

    Check your understanding

    In which method does one entity provide both design and construction under a single contract?

  2. Module 2Pricing the work

    The contract form allocates cost and quantity risk.

    • Stipulated price contract
      A fixed-price deal: the contractor says "I will build exactly this for this amount". If it costs the contractor more, that is the contractor's risk — unless the owner changes the work.
    • Cost plus contract
      The owner pays what the work actually costs, open book, plus an agreed fee for the contractor. It is useful when the scope cannot be fully defined up front.
    • Unit price contract
      Instead of one total price, the contractor quotes a price per unit — for example per metre of pipe — and is paid for the measured quantity actually built.
    • Cost estimate classification
      An estimate made from a sketch cannot be as accurate as one made from finished drawings. Classifying estimates tells everyone how much to trust a number before they make decisions with it.

    Check your understanding

    Which contract suits a road project where the type of work is known but quantities are uncertain?

  3. Module 3Buying the work

    Prequalification and tendering select the builder; Canadian tendering law adds duties of fairness.

    • Prequalification
      Before asking for prices, the owner checks which contractors are actually capable of doing the job, and only those are invited to bid.
    • Tender
      When an owner tenders a project, it publishes the drawings and conditions and invites contractors to submit sealed prices by a deadline. The bids are opened and compared, and normally the lowest compliant bid wins.
    • General contractor (GC)
      The general contractor is the main builder. The owner signs one construction contract with the GC, and the GC hires the electricians, plumbers, steel erectors and other trades and makes sure their work fits together.
    • Trade contractor
      Trade contractors are the specialists: the companies that actually install the ductwork, wiring, drywall or roofing. Usually they work for the general contractor as subcontractors.

    Check your understanding

    What does "Contract A" refer to in Canadian tendering law?

  4. Module 4Planning and controlling the work

    Scope, schedule, cost and risk tools used by owners and contractors.

    • Work breakdown structure (WBS)
      A WBS is a tree that splits a big project into pieces small enough to manage. "New school" becomes "site works", "structure", "envelope", "interiors"; each of those splits again until every piece has a clear owner, cost and duration.
    • Critical path method (CPM)
      Some tasks can only start after others finish. CPM chains them together and finds the sequence that takes longest. Any delay on that chain delays the whole project; tasks off the chain have some spare time, called float.
    • Schedule baseline
      Once everyone agrees the plan, a copy is saved as the baseline. Later, the live schedule is compared with it to see what has slipped, by how much, and why.
    • Look-ahead schedule
      The master schedule shows months; the look-ahead shows the next few weeks in detail — which crews, which areas, which materials — so the site team can spot what is missing before it holds up the work.
    • Last Planner System (LPS)
      Instead of a schedule handed down from the office, foremen and trade leads plan the next phase and the next week together, promising only work they know they can do. Each week they check how many promises were kept and learn from the misses.
    • Critical chain project management (CCPM)
      Instead of padding every task "just in case", CCPM schedules each task at a realistic, tight duration and puts the spare time together at the end of the chain. Managers then watch how much of that spare time gets used up.
    • Buffer burn rate
      If half the spare time is gone but only a quarter of the work is done, the buffer is "burning" too fast and the project is heading for a late finish. Buffer burn compares the two.
    • Earned value management (EVM)
      EVM answers two questions with numbers: are we ahead or behind, and are we over or under budget? It does this by valuing the work done so far at its budgeted cost and comparing that with the plan and with what was actually spent.
    • Risk register
      A risk register is the team's list of things that could go wrong (or unexpectedly right), how likely and how bad they are, who is watching each one, and what is being done about it.

    Check your understanding

    An activity has 15 days of total float. What happens if it slips 10 days?

  5. Module 5Questions, submittals and changes

    Most construction administration is managing information and changes through the right instrument.

    • Request for information (RFI)
      When the drawings are unclear or two documents disagree, the contractor sends an RFI asking the architect or engineer what was meant. The answer is recorded so everyone builds from the same understanding.
    • Submittal
      Before installing something, the contractor sends details of exactly what it plans to supply (a drawing, a product sheet or a physical sample) to the architect or engineer, who checks that it matches the design.
    • Shop drawing
      The design drawings show what is wanted; shop drawings show how a fabricator will actually make it — every connection, dimension and part — so it can be checked before it is built.
    • Transmittal
      A transmittal is the project's delivery slip. It lists exactly what was sent and why, so there is a record if anyone later asks "did you get the revised drawings?"
    • Supplemental instruction
      When the architect or engineer needs to clarify something that does not cost more or take longer, they issue a supplemental instruction instead of a change order.
    • Contemplated change notice (CCN)
      Before deciding on a change, the owner wants to know what it will cost. A CCN describes the change and asks the contractor for a quote. Nothing is built until a change order or other written authorization follows.
    • Change directive
      Sometimes a change cannot wait while the price is negotiated. A change directive tells the contractor to go ahead now; the money and schedule are settled afterwards.
    • Change order
      When the owner wants something different, or a problem changes the work, both sides agree on the new price and schedule and sign a change order. It becomes part of the contract.
    • Non-conformance report (NCR)
      When something is built wrong or with the wrong material, an NCR writes it down, says how it will be fixed and records when it was fixed and checked.
    • Constructability review
      Before drawings go out to build from, experienced builders read through them asking "can we actually build this, safely, in this order, at this cost?" and flag problems while they are still cheap to fix.
    • Pre-installation conference
      Before a roofer, curtain-wall installer or equipment supplier starts work, everyone involved meets to check that the surfaces are ready, the right products are approved, and everyone knows how the work will be inspected.

    Check your understanding

    The owner needs extra work to start immediately, but the price is not agreed yet. Which instrument applies under CCDC 2?

  6. Module 6Getting paid

    Payment runs monthly, with statutory holdback and prompt-payment deadlines.

    • Progress payment
      Builders are paid as the work progresses, usually once a month, for what they finished that month — not in one lump at the end. Part of each payment is held back as security.
    • Holdback
      Each time a contractor is paid, part of the money is kept back for a while. If the contractor does not pay its trades, they can claim against that reserve. Once the claim period passes, the holdback is released.
    • Prompt payment
      Prompt payment laws force owners to pay contractors, and contractors to pay their trades, within fixed numbers of days — or to say formally, and early, why they will not.
    • Construction adjudication
      Instead of waiting years for a court case, a contractor that is not paid can ask an adjudicator to decide quickly. The decision has to be followed now, even though either side can still go to court later.

    Check your understanding

    Under Ontario prompt payment, how long does an owner have to pay a proper invoice?

  7. Module 7Handing over

    Close-out links legal milestones, money and the information the owner needs to operate the asset.

    • Substantial performance
      Substantial performance means the building can be used as intended and only a small amount of work is left. In Ontario the law defines how small, as a percentage of the contract price.
    • Ready-for-Takeover
      Ready-for-Takeover is the date the building is handed over under the CCDC 2 contract. It needs more than "substantially done": the owner must also be allowed to occupy it, and handover items must be in place.
    • Deficiency list
      Near the end of the job, the architect and contractor walk the building and write down everything that is unfinished or wrong. The contractor fixes the items on the list before the project is closed out.
    • Commissioning (Cx)
      Commissioning proves that the building actually works: the heating, ventilation, controls, lighting and life-safety systems are started, tested under real conditions, adjusted and handed over with training and documentation.
    • Operation and maintenance manual (O&M manual)
      O&M manuals are the instruction books for the building: what each piece of equipment is, how to run it, how often to service it and who to call.
    • As-built drawings
      During construction, things move: a pipe is rerouted, a wall shifts. As-built drawings record where everything actually ended up, so the owner knows what is behind the walls.
    • Warranty period
      For a set time after the building is handed over, the contractor has to come back and fix anything that turns out to be faulty. Some products, like roofs, carry longer manufacturer warranties.
    • Completion (total performance)
      Substantial performance means the building is usable; completion means the contract is essentially finished. In Ontario the law says when that is, based on how little work is left.
    • Construction lien
      If a trade is not paid, it can register a lien against the property. That puts the owner and lenders on notice and creates pressure to resolve the payment.
    • Statutory declaration
      Before releasing major payments, the owner asks the contractor to formally swear that it has paid its trades. Making a false declaration has legal consequences.
    • Final payment
      The very last cheque on a project. Before it is released, everything has to be finished, documented and free of outstanding claims.
    • Asset information model (AIM)
      The AIM is the owner's "operating manual" in data form: the list of equipment, spaces, warranties, maintenance information and key documents needed to run the asset, kept up to date over its life.

    Check your understanding

    Which must be certified before Ready-for-Takeover can be achieved under CCDC 2 (2020)?