Part of the Ontario construction contracts guide for owners.
Almost nobody signs CCDC 2 as printed. The standard form is meant to be a balanced starting point that splits project risk fairly, and its general conditions can't be edited directly. So owners change it the only way they can: through supplementary conditions. On some projects those run to a few pages. On others they're longer than the contract they amend.
This guide covers the areas owners most often amend, why, and how to tell a sensible amendment from one that just raises your bid prices. It doesn't give drafting language, which is a job for your construction lawyer. If you're still choosing the contract form, start with our comparison of CCDC 2 and CCDC 5B.
Why supplementary conditions exist
CCDC documents are standard forms. As BLG's review of the 2020 update notes, the documents themselves can't be edited, so parties add supplementary conditions to tailor them. CCDC intended the 2020 edition to reduce the need for amendments, but BLG expected supplementary conditions to remain important.
There are three legitimate reasons to amend:
- Fill gaps. The standard form leaves some project-specific items open, such as who is the "constructor" for health and safety purposes.
- Fit the project. Phased occupancy, tenant turnovers, owner-supplied equipment and specialist insurance all need terms the standard form doesn't spell out.
- Fit the owner. Institutional and corporate owners have their own reporting, audit and approval requirements.
There's also a fourth reason, less often admitted: shifting risk to the contractor. Some of that is reasonable. A lot of it isn't, and it has a price.
The areas owners most often amend
Schedule and reporting
Owners commonly add detailed requirements for the baseline schedule, monthly updates, narrative reports and look-ahead schedules: the format, the software, the level of detail and the review process. These amendments are usually inexpensive and pay for themselves. A contract that requires a resource-loaded critical path schedule, updated monthly with a narrative, gives the owner's team something to manage against. Our guide to reviewing a construction schedule covers what to ask for.
Delay, notice and claims
This is where amendments get contentious. Owners often tighten notice requirements, set out exactly what a claim must contain and when, limit recovery for certain delays, and add liquidated damages. Thompson Dorfman Sweatman's review of CCDC 2 2020 lists clarifying notice timelines as an item for supplementary conditions.
Clear notice rules help both sides. Clauses that deny any time or money for events the contractor can't control are a different matter. WeirFoulds notes that proponents may simply pass on a bid when they see hefty liquidated damages or provisions that limit relief for delay events. See our guide to liquidated damages in Canada.
Insurance
CCDC 2's insurance requirements are tied to CCDC 41. Several firms' reviews of the 2020 update note higher required limits, including general liability rising from $5 million to $10 million, and a new contractor's pollution liability requirement. Owners often amend insurance to add specific coverages, name additional insureds, adjust deductible responsibility or align with lender and landlord requirements. BLG recommends reviewing the insurance terms with your insurance advisor, because changes have direct cost and coverage consequences.
Warranties and takeover
The 2020 edition introduced Ready-for-Takeover as a milestone, and many timelines, including the warranty period, now run from it. Where an owner occupies part of the work early, the warranty period for that part starts on occupancy. Owners with phased openings often amend these provisions to suit the turnover plan. Extended warranties on roofing, glazing or mechanical systems also need care: an OAA practice tip advises spelling out whether an extended warranty covers only materials, or installation labour and making good as well.
Payment, liens and statutory declarations
The 2020 edition updated payment terms for prompt payment legislation and requires workers' compensation evidence and a statutory declaration with payment applications after the first. Owners still commonly amend this area. Clark Wilson's Roy Nieuwenburg, writing about the 2020 form, argues owners need supplementary conditions making the contractor responsible for removing subcontractor liens, broadening who counts as a subcontractor, and tightening the declaration, which can exclude amounts withheld for a legitimate dispute. Ontario owners should read these points alongside our guides to prompt payment and holdback.
Default and termination
The same Clark Wilson commentary criticizes the standard form's threshold for owner remedies, which requires the contractor to have failed to a substantial degree. Owners often amend default provisions so they can act earlier, for example by requiring a recovery plan when the contractor falls behind.
Changes and valuation
Clark Wilson's commentary on the changes part of CCDC 2 notes that the standard form doesn't set a valuation method for change orders and suggests agreeing one in the supplementary conditions. Fixed markups, labour rates and record requirements are common additions, and they save a lot of argument. Our guide to change directives and change orders covers how those rules work in practice.
Gaps the 2020 form leaves open
BLG's review flags several items that need attention whatever the owner's risk appetite. The 2020 form doesn't assign the "prime contractor" or "constructor" role under occupational health and safety law, and if nobody takes it on, it may fall to the owner. That alone is a reason never to tender CCDC 2 without supplementary conditions.
BLG also points to cash allowances, which the consultant can now pool, and to clauses that some owners moved into Division 01 of the specifications, which have to be listed expressly to form part of the contract. The indemnity provisions exclude indirect, consequential, punitive and exemplary damages without defining those terms, and BLG suggests project-specific clarification. For an owner whose main exposure to a late finish is lost rent, how "indirect" is read can matter a great deal.
View the data
| Area | What owners often add | Watch for |
|---|---|---|
| Schedule and reporting | Baseline, monthly updates, narratives, look-aheads | Low price effect; usually worth it |
| Delay, notice, claims | Notice timelines, claim content, liquidated damages | Blanket no-relief clauses deter bidders |
| Insurance | Extra coverages, insureds, deductibles, lender terms | Review with your insurance advisor |
| Warranties, takeover | Phased occupancy, extended warranty scope | Say if labour and making good are covered |
| Payment and liens | Lien removal, declarations, subcontractor definition | Must fit prompt payment and holdback rules |
| Changes and valuation | Fixed markups, labour rates, record rules | Clarity saves more than it costs |
Balance versus bid price
Every amendment that moves risk to the contractor gets priced, either as a premium in the bid or as a reason not to bid. The Canadian Construction Association's 2024 guideline on risk management in construction contracts was written for contractors bidding and negotiating, and it notes that non-standard agreements and lengthy supplementary conditions often push more risk onto contractors and their trades. In effect, it's a checklist for finding these clauses and pricing them.
The cost can be significant. A BC Construction Association piece on onerous bidding conditions cites an Ontario industry study estimating that taxpayers pay at least 5% more than necessary because of procurement and contract practices, potentially up to 20%. That's one study of public procurement, not a rule for every project, but the direction is clear.
The useful test for each amendment is simple: who can best manage this risk, and what does it cost to move it? If the contractor can control the risk, moving it there is reasonable and the price will be modest. If the contractor can't control it, such as unknown site conditions or owner design changes, moving it just buys an expensive contingency the owner pays for whether the risk happens or not.
View the data
| Type | Example | Price effect | Bidders |
|---|---|---|---|
| Clarify | Fill gaps and set clear procedures | Little or no premium | Bidders welcome the certainty |
| Reallocate with reason | Move risks the contractor controls | Modest, visible premium | Priced and accepted |
| Shift what no one controls | Site conditions, owner design, delay relief | Large hidden contingency | Fewer bids, more disputes |
Who should draft them
Supplementary conditions are often prepared by the design consultant as part of the tender package. That can be a problem. A Canadian Consulting Engineer article describes an engineer's supplementary condition that limited both parties' ability to bring claims against the engineer, an amendment that did nothing for the owner the engineer was working for. The author recommends owners object to such clauses and suggests consultants use a procurement lawyer or a lawyer-developed template.
The owner should own the supplementary conditions. On programs we've supported, the best sets were short, project-specific and reviewed by a construction lawyer, the owner's representative and the owner's insurer before tender. Inherited sets copied from the last project, sometimes still written for the 2008 form, were the worst. MLT Aikins and McInnes Cooper both note that supplementary conditions written for CCDC 2 2008 may no longer fit the 2020 form.
What owners should do
- Start from the 2020 form and a clean set. Don't carry forward supplementary conditions from older projects without a full review.
- Justify every risk transfer. For each amendment, write down the risk it addresses and why the contractor is the right party to carry it.
- Prioritize clarity over severity. Clear notice rules, valuation methods and schedule requirements prevent more disputes than punitive clauses.
- Finish them before tender. No "TBD" values, draft notes or conflicts with the tender documents.
- Test them with the market. On larger projects, ask a few contractors during prequalification which clauses would change their price.
- Get legal and insurance advice. A construction lawyer should draft the wording and your insurance advisor should review the insurance terms.
The bottom line
Supplementary conditions are where an owner shapes CCDC 2 to its project. Used well, they fill gaps and set clear rules that prevent disputes. Used as a risk dump, they shrink the bidder pool and raise prices for risks the contractor can't control. The best sets are short, specific and justified line by line.
Reviewing your supplementary conditions before your next tender? Book a 30-minute call with Benjamin R. Consulting.
Sources: BLG, CCDC 2: Updates to the Stipulated Price Contract; Thompson Dorfman Sweatman LLP (via Mondaq), 10 Key Changes in the CCDC 2 2020; MLT Aikins, The new CCDC 2 2020 contract: changes you need to know; McInnes Cooper, CCDC 2 (2020): 8 Key Changes; Clark Wilson LLP, CCDC 2 2020: Déjà vu; Clark Wilson LLP, Changes in the Contract Work: CCDC 2's General Condition 6; Ontario Association of Architects, Practice Tip PT.23.1: CCDC 2 overview of changes; WeirFoulds LLP, Drawbacks of using nonnegotiable supplementary conditions in RFPs; OAA, CCA publishes guideline on risk management in construction contracts; BC Construction Association, The cost of onerous bidding conditions; Canadian Consulting Engineer, Drafting supplementary conditions. This article is general information, not legal advice. Get legal advice on your contract and specific circumstances.