Fixed-price contracts work well when an owner knows exactly what it wants and the market can price it. On complex projects, neither is true at the start. Design isn't finished, the risks aren't understood, and a contractor asked for a firm price will either load it heavily or plan to recover the difference through claims. Collaborative models try to fix that by bringing the builder in early and agreeing the price later, once the project is better understood.
Three of these models now have a real foothold in Canada: progressive design-build, integrated project delivery (IPD) and alliancing. This guide explains how each works, how they differ, what the Canadian standard forms provide, and when they make sense for owners.
Progressive design-build
Progressive design-build is a two-phase version of design-build. The owner selects a design-builder mainly on qualifications rather than price, then works with that team to develop the design, cost estimate and schedule. Only when the design is advanced enough does the design-builder propose a price for construction. If the parties can't agree commercial terms, the owner can walk away and re-procure, often called the off-ramp.
The CCDC published its first standard progressive design-build contract this year. According to summaries by WeirFoulds and Fasken, CCDC 32-2026 works like this:
- Project Development Phase. The design-builder provides design and preconstruction services, including pricing, scheduling and risk assessment, through a series of customizable project gates. At each gate, the owner can proceed, ask for revisions or terminate.
- Payment during development. The design-builder can be paid a stipulated fee, time-based rates, another agreed arrangement or a combination. WeirFoulds suggests owners consider upset limits on time-based rates.
- Early work. Site preparation, demolition and long-lead purchases can be authorized before the final price is set.
- Final Project Proposal. Once the owner accepts it, scope, price and schedule are fixed, and the design-builder completes the design and builds on a stipulated-price basis.
- Exit before the price is agreed. Either party can terminate before the Final Project Proposal is accepted. The design-builder is paid for services, work performed and reimbursable expenses, and on owner termination may also recover certain other costs and damages.
A companion form, CCDC 33, covers the design-builder's contract with its consultant. Infrastructure Ontario has used a progressive design-build model with a target price on hospital work: in 2025 it signed a development phase agreement for a Brampton hospital redevelopment, after which the parties can choose whether to sign a construction agreement.
Integrated project delivery
IPD goes further. Instead of the owner holding separate contracts with the designer and the builder, the owner, the consultant, the contractor and often key trades all sign one multi-party contract. The Canadian standard form is CCDC 30, first published as the 2018 edition and released in early 2019, according to BLG. An updated edition followed in 2025.
The core features, as described by Miller Thomson and BLG:
- Validation phase. Before committing to design and construction, the team studies the site, the technical data and the owner's requirements and prepares a validation report setting the target cost, the risk pool and the milestone schedule. The owner must approve it, and parties can withdraw until then.
- Costs reimbursed, profit at risk. The owner reimburses each party's actual costs. Each party's expected profit goes into a shared risk pool. If costs exceed the target, the pool absorbs the overrun. If costs come in below target, savings are shared under the agreed terms.
- Mutual waiver of claims. The parties generally waive claims against each other, with listed exceptions such as wilful default.
- Shared decision-making. Joint management teams make decisions, generally by consensus.
BLG's summary of the 2025 update notes new provisions for an IPD advisor, a "Big Room" for co-located work, lean tools and key personnel, plus an expanded validation phase and new termination and cure provisions.
Canada's best-known public example is Defence Construction Canada's first IPD contract, for new Royal Canadian Dragoons facilities at Petawawa, Ontario. DCC signed the CCDC 30 contract in October 2018 and described IPD as suited to large, complex projects.
View the data
| Outcome | Actual cost | Team profit | Owner pays |
|---|---|---|---|
| Under target | $47.0M | $4.5M | $51.5M |
| Modest overrun | $51.0M | $2.0M | $53.0M |
| Pool exhausted | $55.0M | $0.0M | $55.0M |
The illustration shows the owner's real exposure. When costs come in under target, the team earns its full profit plus a share of savings, and the owner still pays less than the target plus the pool. When costs run over, the team's profit shrinks. But once the pool is gone, the owner pays every additional dollar. BLG makes the same point: after the pool is depleted, parties earn no profit, but the owner still pays all reimbursable costs. IPD caps the team's downside at its profit. It doesn't cap the owner's.
Alliancing
Alliancing is the older cousin of IPD, developed on large infrastructure programs. Gowling WLG describes it as a single contract between the owner and the non-owner participants, typically the designer, contractor and key suppliers, with costs reimbursed on an open-book basis against a jointly developed target. Savings and overruns are shared through gain-share and pain-share, with the non-owner participants' pain-share generally capped at their profit, so the owner carries the residual cost risk. An alliance board decides unanimously, and most claims between participants are waived.
There is no Canadian standard-form alliance contract. Alliances are usually drafted from scratch or adapted from international forms, which makes them expensive to set up and better suited to large public programs than to a single building.
How they differ
All three models bring the builder in early and defer the final commercial position. The differences are in how far they go.
View the data
| Factor | Progressive DB | IPD | Alliancing |
|---|---|---|---|
| Contract | Owner and design-builder | One multi-party contract | One multi-party contract |
| Canadian form | CCDC 32-2026 | CCDC 30 | None standard |
| Price basis | Stipulated price after development | Cost reimbursed, profit at risk | Open book, target with gain/pain share |
| Owner's exit | Before final price is accepted | Before validation is approved | Set in each alliance contract |
| Claims | Normal remedies after price set | Mostly waived | Mostly waived |
| Typical use | Healthcare, transit | Large, complex buildings | Large public infrastructure |
The models also differ in who sits at the table. In progressive design-build, the owner still has one counterparty, and trades are the design-builder's subcontractors. In IPD, key trades can be full parties to the contract, sharing in the risk pool alongside the architect and contractor. That deeper integration is the point of IPD, but it also means more parties have to agree before decisions are made.
Progressive design-build is the least radical. Once the price is set, it becomes a conventional stipulated-price design-build contract, with the usual claims and remedies. IPD and alliancing change the relationship for the whole project: costs stay open-book, profit stays at risk, and most rights to sue each other are given up.
When collaborative models make sense
These models are not better contracts in general. They're better suited to a particular kind of project. Blakes notes that co-development works best on complex or uncertain-risk projects and is less suited to simple, well-defined ones. Miller Thomson makes the same point about IPD, suggesting a stipulated-price contract may be the better fit for simple projects with limited technical complexity. In our experience they make sense when:
- The scope or the risks can't be defined well enough to get a sensible fixed price at the outset.
- Early contractor and trade input could materially change the design, cost or schedule.
- The owner has the capacity to participate actively: attending joint meetings, making decisions quickly and reviewing open-book costs.
- The project is large enough to justify the setup cost and the governance effort.
They make less sense for a standard fit-out, a repeat retail prototype or any project where the drawings can be finished and competitively tendered. For those, stipulated price or conventional design-build usually gives better value with less effort.
Risks owners should weigh
- Price competition happens late or not at all. In progressive design-build, the construction price is negotiated with one team. Independent estimates at each gate are the owner's main protection. Our guide to preconstruction services covers how to keep that leverage.
- The off-ramp has a cost. Walking away means paying for services to date, losing time and re-procuring. An off-ramp is only useful if the owner is prepared to use it.
- Fewer remedies. IPD's waiver of claims limits what the owner can recover from team members for poor performance. BLG also flags deadlock risk and gaps around change orders, health and safety, liens and design review that may need supplementary conditions.
- Culture is a contract term. Collaborative models depend on people behaving collaboratively. A team that reverts to adversarial habits under pressure gets the costs of both approaches and the benefits of neither.
What owners should do
- Test the fit with care. If the project can be defined and tendered, a conventional contract is usually cheaper to run.
- Select on people, not just firms. Interview the actual team members who will be in the room, and make key personnel commitments contractual.
- Get an independent estimate at every gate. Benchmark the target cost or proposed price against your own cost consultant's estimate before accepting it.
- Plan the off-ramp before you need it. Know what you'd pay, what you'd own and how you'd re-procure if negotiations fail.
- Staff the owner's side properly. Budget for an owner's rep or project controls team that can review open-book costs and keep pace with decisions.
The bottom line
Progressive design-build, IPD and alliancing give owners early builder input and a price based on a better-understood project. In exchange, they ask owners to give up early price competition, accept more open-book cost risk and commit real management time. With CCDC 32 and the updated CCDC 30, Canadian owners now have standard forms for two of these models. The forms make the approach easier to adopt. They don't make it right for every project.
Wondering whether a collaborative model fits your next project? Book a 30-minute call with Benjamin R. Consulting.
Sources: WeirFoulds via Mondaq, Introducing the new CCDC 32-2026 progressive design-build contract (July 2026); Fasken, Redefining design-build: key updates in CCDC (June 2026); ReNew Canada, Development phase agreement begins for Peel Memorial Hospital redevelopment (October 2025); Miller Thomson, Collaborative contracts and the CCDC 30 (May 2026); BLG, Keep your friends close: CCDC 30 and integrated project delivery (2019); BLG, 2025 CCDC construction contract updates; Defence Construction Canada, Dragoons facilities progressing well under first federal IPD contract (2020); Gowling WLG, What are the collaborative delivery models?; Blakes, Progressive design-build model and co-development agreements in Canada (January 2025). The risk pool example is illustrative. This article is general information, not legal advice. Get legal advice on your contract and specific circumstances.