Part of the Ontario construction contracts guide for owners.
"Construction management" sounds like one delivery method. In Ontario it's at least two, and they put the owner in very different positions. Under construction management for fee, the construction manager is your adviser and you hold the trade contracts. Under construction management at risk, the construction manager holds the trade contracts and becomes your builder. Same title, same early involvement in design, different allocation of risk and control.
This guide goes deeper into the two CM models than our CCDC 2 vs CCDC 5B comparison. It covers what changes when the owner holds the trade contracts, what changed in the 2025 CCDC forms, and how to decide which model suits your organization.
Two models, two CCDC forms
CM for fee (also called CM as agent or CM for services) uses CCDC 5A. The CCDC describes the construction manager as a limited agent of the owner that provides advisory services and administers the owner's contracts with trade contractors. The trades sign directly with the owner, usually on CCDC 17, a stipulated price contract designed for 5A projects. The construction manager is paid a fee for its services and generally doesn't build anything itself, apart from limited temporary work such as site facilities, security and cleanup.
CM at risk uses CCDC 5B. Here the construction manager provides advisory services during preconstruction and then performs the work during construction. The trades are its subcontractors, not the owner's. The CCDC describes 5B as starting on a cost-plus basis, with options to move to a guaranteed maximum price (GMP), a GMP with shared savings, or a stipulated price. Our guide to stipulated price vs cost-plus vs GMP explains those pricing options.
The diagram shows the difference that matters most. Under 5A, there's a contract line from the owner to every trade. Under 5B, there's one construction contract, with the construction manager.
What changes when the owner holds the trade contracts
Holding the trade contracts under CM for fee gives the owner control and transparency. You see every trade price, every award and every change. The construction manager's fee isn't tied to trade markups, so there's less incentive to inflate them. And each trade package is competitively bid as a stipulated price contract.
That control comes with exposure. The owner is now the party with a contract with each trade. Practical consequences include:
- Trade default and coordination risk sits with you. If the drywall contractor is late and the ceiling trades lose a week, the claims are between parties who each have a contract with the owner. The construction manager coordinates and advises, but it isn't guaranteeing the outcome.
- Gaps and overlaps between packages are your problem. Scope that falls between two trade packages has to be bought separately, often late and without competition.
- Health and safety responsibilities shift. The OAA's practice tip on CM contracts notes that under 5A, the owner will likely be the "constructor" under Ontario's Occupational Health and Safety Act unless that role is delegated to the construction manager. That needs to be settled before mobilization, with legal advice.
- More contracts to administer. Payment applications, holdback, lien exposure and closeout multiply with every trade contract. Ontario's prompt payment rules apply to each one.
Under CM at risk, most of that sits with the construction manager. The owner has one contract, one party responsible for the trades, and one payment stream to manage. In return, the owner sees less and controls less, particularly if the contract stays on a cost-plus basis without strong audit rights.
What changed in the 2025 CCDC forms
The CCDC released updated editions of 5A, 5B and 17 in June 2025, the first updates to the construction management suite since 2010. Law firm summaries from BLG and Gowling WLG highlight several changes owners should know about:
- Separate preconstruction fees. Both forms now separate preconstruction fees from construction-phase fees. CCDC 5A also allows separate pricing for post-construction services. CCDC 5B defines preconstruction services separately from construction services, with a separate fee model.
- Termination without cause. Both forms add an express right for the owner to terminate or suspend without the construction manager being in default. Under 5B, a break fee applies during preconstruction.
- Pricing options moved to appendices. In 5B, the GMP and stipulated price options now sit in standalone appendices, exercised by change order. BLG notes the owner's right to audit Cost of the Work records under the GMP option now runs up to one year, up from 60 days.
- Ready-for-Takeover. A new handover milestone, separate from substantial performance, which still governs lien periods and holdback release.
- Payment timing. Payment is due within 28 days of a proper monthly application, in line with prompt payment legislation.
Owners with supplementary conditions written for the 2010 forms should have them reviewed before reusing them. Several common amendments, such as termination for convenience, are now in the base documents, and others may conflict with the new structure.
Risk and control trade-offs
Choosing between the two models is mostly a choice about where you want the risk to sit and how much capacity you have to manage it.
View the data
| Factor | CM for fee (CCDC 5A) | CM at risk (CCDC 5B) |
|---|---|---|
| Trade contracts | Owner, usually on CCDC 17 | Construction manager, as subcontracts |
| Trade price visibility | Every bid and award seen by owner | Depends on audit and open book terms |
| Trade default risk | Owner | Construction manager |
| OHSA constructor | Likely owner unless delegated | Generally the CM; confirm in contract |
| Cost certainty | Builds as each package is awarded | When a GMP or stipulated price is agreed |
| Owner admin load | High: many contracts | Lower: one contract |
CM for fee suits owners with strong in-house or owner's rep capacity. If you have people who can manage multiple trade contracts, track cost daily and make quick decisions, 5A gives you competitive trade pricing and full visibility. Large institutional owners and developers with repeat programs often prefer it for that reason.
CM at risk suits owners who want a single point of responsibility. If your team is lean, or the project is a one-off, carrying a dozen trade contracts is a real burden. 5B puts that burden on the construction manager. The trade-off is that you need to watch the commercial terms closely: the definition of cost, the fee, what adjusts a GMP, and how the construction manager buys out its subcontracts.
There is a middle ground. Many owners use CM at risk but keep some of the visibility that CM for fee offers. The construction manager tenders each trade package competitively, the owner or its rep attends the bid openings and approves the awards, and trade prices are carried into the cost reports without markup beyond the agreed fee. When the GMP or stipulated price is set, it's built from those tendered packages rather than from the construction manager's own estimate. This keeps a single point of responsibility for the trades while giving the owner evidence that the price reflects the market. It only works if the contract says so. Open-book tendering, owner approval of awards and audit rights all need to be written into the agreement or the supplementary conditions, not assumed.
Neither model works well if the roles aren't clear. The OAA's practice tip warns that under construction management, the roles of the architect and the construction manager can overlap and blur, and that advice from the two can conflict. It also notes that tendering trade packages in sequence can require earlier drawings to be reworked, and that compressed drawing schedules leave less time for coordination and checking. On programs we've supported, the projects that ran smoothly had a written responsibility matrix covering design, cost, schedule, approvals and closeout before the first package went to tender.
Questions to settle before choosing
- Who will manage the trade contracts? If the honest answer under 5A is "the construction manager, mostly," you're carrying the legal risk without the control you'd expect in return.
- When do you need price certainty? Under 5A, cost certainty builds as each trade package is awarded. Under 5B, it depends on when, and whether, the parties agree a GMP or stipulated price.
- How will the construction manager be selected? On qualifications and fee, on a fee plus general conditions, or on a preliminary price? Ontario has no regulatory requirements for construction managers, according to the OAA, so prequalification falls to the owner. Our guide to prequalifying contractors in Ontario applies here too.
- Who certifies payment? Under 5A, the owner designates the payment certifier, which may be the construction manager or the consultant. Decide early and write it down.
What owners should do
- Be honest about capacity. Choose CM for fee only if your team, or your owner's rep, can manage the trade contracts. Otherwise CM at risk is usually the safer choice.
- Use the 2025 forms. They reflect prompt payment, separate preconstruction fees and termination rights that most owners were adding by amendment anyway.
- Write a responsibility matrix. Define who does what among owner, consultant and construction manager for design, cost, schedule, permits, commissioning and closeout.
- Under 5B, plan the pricing conversion. Agree in advance when the GMP or stipulated price will be set, what level of design it needs, and how it will be independently checked.
- Under 5A, settle the constructor role. Get legal advice on health and safety responsibilities and insurance before any trade mobilizes.
The bottom line
CM for fee and CM at risk both bring construction expertise into design early. The difference is who holds the trade contracts, and that decides who carries trade risk, who controls cost and how much the owner has to manage. Choose the model that matches your organization's capacity, not just the one your preferred construction manager proposes.
Deciding between CM for fee and CM at risk on your next project? Book a 30-minute call with Benjamin R. Consulting.
Sources: CCDC Standard Construction Documents (descriptions of CCDC 5A, 5B and 17); Ontario Association of Architects, Practice Tip PT.23.2: CCDC Construction Management Contracts; Ontario Association of Architects, Practice Tip PT.23.13: CCDC 5A-2010; Ontario Association of Architects, Practice Tip PT.23.4: CCDC 5B-2010; BLG, 2025 CCDC construction contract updates (July 2025); Gowling WLG, Updates to the 2025 CCDC construction management contracts (July 2025); Ontario Bar Association, Construction management contracts updated, refined and reflective of modern practice. This article is general information, not legal advice. Get legal advice on your contract and specific circumstances.