What is CCDC 30?
IPD is a contractual strategy that aims to replace the adversarial nature of typical segmented construction contracts with a constructive collaboration between the essential stakeholders. IPD contracts are written in such a way that they discourage litigation and encourage communication and cooperation throughout the project’s life cycle.
CCDC 30 promotes these goals by, among other things, having all major parties involved in a project sign the same contract, utilizing the services and insights of all parties early in the project’s life cycle, collaborating to create a shared risk/reward pool, and establishing a deferral of liability between both parties to the contract to lessen the probability of finger-pointing in the event of problems during the project’s different stages.
Scope allocation, payments, revisions, conflict resolution, discontinuation, insurance and contractual stability, and liability allocation are some of the challenges that are addressed with the use of CCDC 30 Contracts.
The pricing system is the cost added with a target price. The profits of the design/construction group are recognized and assigned to a risk pool which stays at risk as long as the project objectives are met.
CCDC 30 also describes an IPD project’s project management organization, including the senior managers, project management team, and project implementation team.
CCDC 30 IPD Phases
The IPD process involves four different phases.
Phase One: Validation Phase
The PMT assesses the project goals and defines the Base Target Cost, milestone calendar, and profit/risk pool during the Validation Phase. This confirmation is contained in a lengthy and detailed Validation Report, which confirms the Project’s business case and is submitted to the Owner for approval.
A Contract Tasks Matrix with a staffing plan is included in the Validation Report. The Validation Report verifies the parties’ agreement that there is a reasonable chance the project will be completed successfully and satisfy the PMT’s goals.
Phase Two: Design/Procurement Phase
The IPD project progresses to the Design/Procurement Phase when the Validation Phase is completed and the Validation Report is approved. During this phase, the PMT coordinates the Project’s design services.
Alongside design services, the PMT provides ongoing contract task updates, early purchase of systems, materials, or equipment, and ongoing Project Implementation Team organization (PITs). PITs are interdisciplinary, cross-functional teams tasked with providing specific components of the work in its most equitable way feasible.
The PMT creates a detailed timetable for the Project with the help of the PITs, based on the design criteria and milestone schedule defined in the Validation Report.
The project’s Final Target Cost is determined at this point. The Final Target Cost comprises all cost factors, such as the Risk Pool, Contingency, Reimbursable Costs, and, if the owner wishes, any Added Value Incentive Items that do not exceed the previously defined Base Target Cost.
Phase Three: Construction Phase
The PMT supervises the Project’s construction during the construction phase. This phase entails continuing and continuous collaboration in real-time with the goal of solving problems and identifying chances for innovation. The implementation of Lean construction concepts and collaborative techniques, as in other phases of the project, is a significant advantage for the project’s successful completion.
Phase Four: Warranty Phase
Following construction completion, the Owner and Design/Construction team collaborate to remedy any work that does not comply with the Contract and construction papers. The PMT organizes a final evaluation of the Project, including all project expenditures, thirty days before the Warranty Phase expires, and decides the final Risk Pool distribution.
Things to Think About Before Implementing CCDC 30
Some of the key differences and areas for concern with CCDC 30 are as follows:
- The design requirements, project cost, and scopes of work for the project are not complete at the time of contract formation. Though a “Contract Task Matrix” may be added as a schedule to the CCDC 30, no detailed scope of work, such as a change order process, occupational health and safety regulations, lien protection provisions, design reviews, and so on, is included as part of the agreement at the formation.
- The projected profit of all parties to the agreement is included in the risk pool in CCDC 30. This is adjusted throughout the project’s validation, design, and procurement phases. Throughout the project, parties are rewarded for their direct and hourly costs, and any project costs that go below the agreed-upon target cost are paid out of a risk pool. Because of one party’s acts or omissions, all participants benefit or suffer collectively. IPD parties should be informed that once the risk pool has been destroyed, they are no longer entitled to any profit, however, the owner remains liable for all reimbursable expenditures.
- The CCDC 30 stipulates that the teams make decisions unanimously, with a few exceptions. While this is an admirable notion, in the event of a deadlock, the CCDC 30’s basic provisions do not effectively provide for a rapid resolution.
- The CCDC 30 contains an indemnity and waiver of responsibility provision that compels IPD parties to renounce all claims against one another, with the exception of a few claims which are specifically listed. Limitations of liability may also apply to the specified claims that have not been waived. While this is certainly in accordance with the idea of CCDC 30 and IPD contracts in general, participants should be aware of the implications of such waivers and limitations before signing an IPD contract.
- CCDC 30 also presents a number of other difficulties, which parties will almost certainly aim to address during the application of supplemental conditions. The benefits and sacrifices inherent in CCDC 30 should be carefully considered by parties to an IPD construction project to evaluate whether the project and its participants are well suited for that particular arrangement.
As the CCDC 30 is implemented, the industry will face a steep learning curve. However, the authors believe that CCDC 30 and Integrated Project Delivery contracts in general could have a positive impact on an industry that has traditionally been slow to change if parties can accept the societal change IPD is meant to stimulate, select the right projects, and, perhaps most importantly, choose the right participants.