What is a fix price construction contract (CCDC2)? Can the price really be fixed?
- Feb 20
- 2 min read
A CCDC 2 contract is a **stipulated (fixed) price** prime contract between an owner and a contractor, where the contractor agrees to perform a clearly defined scope of work for one lump‑sum contract price, regardless of the contractor’s actual costs, subject only to specific adjustments allowed by the contract (e.g., approved changes in the work, taxes, and certain delay events).
What “fixed price” means in CCDC 2?
In CCDC 2, the contract price is set out in Article A‑4 as a single dollar amount and is the basis for progress payments over the job. The price is “fixed” in the sense that:
- The owner’s obligation is to pay that stipulated amount for the defined scope, not whatever the contractor’s costs turn out to be.
- The contractor takes the risk of cost overruns on that scope (labour, materials, subcontractors, productivity) and keeps the benefit of any efficiencies or savings.
- The price can only change through the mechanisms in the contract: change orders/change directives, adjustments to cash allowances, specified tax changes, and certain delay/force majeure events, all processed under the “Changes in the Work” and related general conditions.
Can the price “really” be fixed?
Yes and no:
- **Fixed for the agreed scope:** If the scope, site conditions, and assumptions in the contract documents turn out as expected and there are no owner‑driven changes, the owner should pay exactly the stipulated price, no more, no less.
- **Not fixed against changes in scope or risk events:** The contract expressly contemplates adjustments when the owner adds or deletes work, when defined allowances are reconciled, or when contract‑defined delay or regulatory changes occur; these are legitimate changes to the contract price, not “breaking” the fixed price.
- **Fixed relative to contractor’s internal costs:** Even if the contractor’s costs spike (material inflation, subcontractor bids, mistakes in estimating), the owner is generally not required to pay more unless it fits a defined adjustment clause; the contractor bears that risk under a stipulated price model.[
## Practical takeaway
In practice, a CCDC 2 “fixed price” is as fixed as:
- The **clarity and completeness of the drawings/specs** and geotechnical/conditions information.
- The **discipline around change management** on both sides (documenting changes, pricing them formally, and issuing change orders/change directives).
- The **supplementary conditions** your lawyer or consultant has added, which can shift risk and affect when price changes are allowed.
If you want a price that is as close to truly fixed as possible as an owner, focus on tightening scope definition, minimizing provisional sums/allowances, and being strict on change control. If you’re a contractor, assume the stipulated price is firm and price in contingencies for the risks you are taking on.
References:
CCDC 2 – 2020 Stipulated Price Contract
