CCDC 5B-2025: CM for services and construction

CCDC 5B is construction management "at risk". The construction manager starts as the owner's adviser during design and then becomes the builder, holding the subcontracts and performing the Work. The 2025 edition splits those two roles more cleanly than before: pre-construction services now have their own scope, fee and invoicing, and the Work starts on cost-plus terms that can later be converted to a guaranteed maximum price or a stipulated price. This lesson shows how the money moves under 5B-2025 and where the owner keeps control.

Learning outcomes

• Explain how CCDC 5B-2025 separates Pre-construction Services from the Work, and how each is paid and certified.
• Describe the three pricing options (Guaranteed Maximum Price, GMP plus percentage cost savings, and conversion to a stipulated price) and how they are exercised.
• Use the Execution Plan and the one-year audit right to control the Cost of the Work.
• Compare 5B with 5A on contracts, certification, holdback, safety and liability, using a Northgate hypothetical.

The lesson

From adviser to builder

CCDC describes 5B-2025 as a contract under which the construction manager (CM) gives advisory services during pre-construction and performs the Work during construction. Unlike 5A, covered in lesson 11, the owner has one construction contract: with the CM. The CM engages the trades as its own subcontractors, often on CCA 1-2021, and during construction takes on obligations similar to a general contractor under CCDC 2. Like the rest of the 2025 suite, 5B was released on June 30, 2025, replacing the 2010 edition.

Pre-construction Services stand on their own

The biggest structural change in 2025 is that Pre-construction Services are now a separate defined concept, with their own scope, compensation, invoicing and administration. The pre-construction fee can be fixed or time-based and is independent of the construction fee. Pre-construction invoices go directly to the owner, without Consultant certification, and the Consultant no longer decides disputes about pre-construction compensation; those are settled between owner and CM. Reimbursable expenses now apply only to Pre-construction Services, and the definition of the Work excludes them.

For the owner this is cleaner. It can buy pre-construction advice on a known fee, decide later whether to proceed to construction with the same CM, and see exactly what it paid for the advice. It also means the owner, not the Consultant, has to review pre-construction invoices against the agreed scope.

The Work: cost-plus first, options later

Construction starts on an actual-cost basis: the Cost of the Work plus a fee, which can be a percentage of that cost or a fixed amount. The CM's subcontracts, labour, Products, equipment and temporary work flow through the Cost of the Work, so everything in lesson 8 about defining and auditing reimbursable cost applies here too. CCDC's Bulletin 29 notes that, without the stipulated price option, tariff changes under 5B need no special adjustment because they are reimbursable cost.

The parties can then exercise one of three options, each now in its own appendix rather than in the Agreement articles: a Guaranteed Maximum Price (GMP), a GMP plus a percentage of cost savings, or conversion into a stipulated price contract. An option is exercised by Change Order, and each appendix comes with tailored amendments, so the parties must fit their Supplementary Conditions to the appendix they choose. Figure 2 shows the path.

Controls on the Cost of the Work

Two 2025 additions give the owner more grip on cost. First, the owner may ask the CM for an Execution Plan setting out its construction methodology, how it will procure subcontracts, what it will perform with its own forces, and its anticipated cash flow. On a cost-plus job, self-performed work is where pricing is least visible, so an owner should ask for the plan before construction starts and tie self-performance to an agreed approach. Second, the owner's right to review the CM's cost records now runs for one year after final completion, up from 60 days. That makes a proper close-out audit possible.

One change cuts the other way. Default, insolvency, abandonment or termination of a subcontractor is now listed as a delay beyond the CM's control. The CM may still have to replace the subcontractor and carry the cost under the contract terms, but the owner should expect a time extension, and plan subcontract prequalification and security accordingly.

Payment, takeover, termination and liability

The owner pays within 28 calendar days of receiving a proper invoice (5B GC 5.3 to 5.6), up from 20 days. Where legislation permits, the owner releases the holdback for a part of the Work once the Consultant certifies or verifies it complete, and progressive release now covers the CM's own work. The Consultant certifies the CM's fee for construction services and the Work, but not pre-construction services. Contract Time runs from the start of Pre-construction Services to Ready-for-Takeover (GC 12.1), and early occupancy sits in GC 12.2. The owner prepares the Project Schedule; the CM prepares and keeps updating the Construction Schedule.

The owner may terminate for convenience under GC 7.1. During pre-construction the CM receives a break fee, a percentage of the latest Construction Cost Estimate; during construction, its direct damages including reasonable loss of profit. Lesson 14 covers this in detail. Liability under GC 13.2 is capped at the greater of the Contract Price and $2 million, up to $20 million, and the Contract Price is now defined to include the fees, reimbursable expenses and the Cost of the Work. Cash allowances were removed.

Northgate worked example

Northgate Distribution Centre (fictional) is a 12,000 m² tilt-up warehouse in Vaughan for Northgate Logistics Inc. (fictional), actually procured design-bid-build on CCDC 2-2020 with Halvorsen Builders Ltd. (fictional) at $34,950,000. See the Northgate fact sheet.

What if Northgate had used 5B?

Suppose, as a hypothetical, the owner had hired a construction manager (the CM) under CCDC 5B-2025 during design, on the same illustrative terms as lessons 14 and 15: a pre-construction fixed fee of $140,000, a construction fee of 3.5% of the Cost of the Work, and an estimated Cost of the Work of $33,580,000. The pre-construction fee is invoiced directly to Northgate Logistics. At Class A, with about 85% of the subcontract value tendered, the parties negotiate a GMP and exercise the GMP option by Change Order. Figure 3 shows how the illustrative GMP of $34,755,300 (the Cost of the Work plus the $1,175,300 construction fee) is built.

View the data

Component	Amount	Share
Tendered subcontracts	$24,500,000	70.5%
Untendered packages (CM estimates)	$4,300,000	12.4%
General conditions and self-performed work	$3,580,000	10.3%
Contingency inside the GMP	$1,200,000	3.5%
Subtotal: Cost of the Work	$33,580,000	96.6%
Construction fee (3.5%)	$1,175,300	3.4%
GMP	$34,755,300	100%
Pre-construction fee (outside the GMP)	$140,000

The owner's representative reviews the GMP the way a lender would. The $24.5M of tendered subcontracts is backed by bids and needs only a check of scope gaps between packages. The $4.3M of untendered estimates is where the CM can build in comfort, so the owner asks for the estimate backup and a commitment to tender those packages competitively. The $3.58M of general conditions and own forces is tested against the CM's Execution Plan. The $1.2M contingency is negotiated: what it may be used for, who approves draws on it, and what happens to the unused balance. Choosing the GMP plus savings option would give the CM a share of any underrun, which helps if the owner wants the CM looking for savings, but it also gives the CM a reason to argue the GMP up.

Choosing an option, and when

Figure 4 is a simple guide for the owner's decision at each estimate stage. The general rule: buy certainty only when the price you are fixing reflects real bids.

5A or 5B for Northgate?

For a single-owner warehouse with a firm opening date, M10 racking on Monday January 17, 2028, 5B gives Northgate Logistics one accountable builder and a path to a GMP, at the price of less direct control over subcontract procurement. 5A gives more control and transparency, but leaves the owner holding a dozen contracts and, probably, the constructor role.

Owner's move

• Buy pre-construction separately, and review it yourself. Its invoices skip the Consultant, so check them against the agreed scope.
• Ask for the Execution Plan early. Agree self-performed work and procurement before the first subcontract is let.
• Set the GMP on bids, not estimates. Push for most packages to be tendered first, and scrutinize the rest.
• Fit the Supplementary Conditions to the option chosen. Each appendix carries its own amendments.
• Use the one-year audit. Plan a close-out audit of the Cost of the Work before the window ends.

Common mistakes

1. Assuming 5B is a GMP contract. It starts as cost plus fee; a GMP exists only if a Change Order exercises it.
2. Letting the Consultant certify pre-construction invoices. The 2025 form routes them to the owner directly.
3. Accepting a contingency with no rules. Define its use, approvals and the fate of the unused balance.
4. Ignoring the subcontractor-default delay. It now entitles the CM to time; prequalify and secure key subcontracts.
5. Using 2010 Supplementary Conditions. Pre-construction, options, audit, termination and liability have all changed.

Quick quiz

1. Under CCDC 5B-2025, how is the Work paid at the outset?

   1. A stipulated price
   2. A GMP
   3. Cost of the Work plus a percentage or fixed fee
   4. Unit prices

2. How is a GMP option exercised under 5B-2025?

   1. Automatically at Class A
   2. By Change Order
   3. By the Consultant's certificate
   4. By notice from the CM alone

3. Who receives and reviews pre-construction invoices under 5B-2025?

   1. The Consultant certifies them
   2. The owner, directly
   3. The lender
   4. The subcontractors

4. How long after final completion can the owner review the CM's cost records?

   1. 30 days
   2. 60 days
   3. One year
   4. Six years

5. Which item is NOT part of the Execution Plan the owner may request?

   1. Procurement of subcontracts
   2. Use of the CM's own forces
   3. Anticipated cash flow
   4. The Consultant's design fee

Show answers and explanations

1. C. The Work starts on an actual-cost basis plus a fee; the options can be added later.
2. B. Each option is in an appendix and is exercised by Change Order.
3. B. Pre-construction invoices go directly to the owner without Consultant certification.
4. C. The 2025 edition extends the review right to one year after final completion, from 60 days.
5. D. The plan covers methodology, subcontract procurement, own forces and cash flow, not the design fee.

Key terms

CM at risk

A construction manager that holds the subcontracts and performs the Work, as under CCDC 5B.

Pre-construction Services

In 5B-2025, the CM's advisory services before construction, with their own scope, fee and invoicing, excluded from the Work.

Cost of the Work

The actual reimbursable costs of performing the Work, paid with the construction fee.

Guaranteed Maximum Price (GMP)

An option that caps the price of the Work; in 5B-2025 it sits in an appendix and is exercised by Change Order.

GMP plus cost savings

A GMP under which the CM keeps an agreed percentage of any saving below the GMP.

Execution Plan

A plan the owner may request from the CM covering methodology, subcontract procurement, own forces and cash flow.

Break fee

The amount owed to the CM if the owner terminates for convenience during pre-construction, set as a percentage of the latest Construction Cost Estimate.

References

1. CCDC, CCDC 5B – 2025 Construction Management Contract – for Services and Construction (document page).
2. Ontario Association of Architects, Practice Tip PT.23.2: CCDC construction management contracts (version 2.0, January 2026).
3. Gowling WLG, Updates to the 2025 CCDC construction management contracts: what you need to know (July 2025).
4. WeirFoulds LLP, Here's the drill: the 2025 CCDC 5B update (December 2025).
5. BLG, 2025 CCDC construction contract updates (July 2025).
6. Clark Wilson LLP, Key updates to the 2025 CCDC 5A, 5B and 17 (August 2025).
7. Pallett Valo LLP, 2025 CCDC contract updates: what construction professionals need to know (January 2026).
8. Alexander Holburn Beaudin + Lang LLP, The new and improved CCDC 5B-2025 (Mondaq, June 2026).
9. CCDC, Bulletin 29: Adjustments in Contract Price due to tariffs (August 2025).

Verified on November 6, 2026.

Next lesson in this trackCCDC 17: trade contracts under a CM