Two bids for the same commercial building can be six figures apart, and both can be honest. One priced the drawings exactly as issued. The other priced what it will actually take to finish the building.
Most owners pick the lower number. It’s the most common way to overpay, because the gap resurfaces later as change orders, and by then there’s no competition left to keep the price honest.
Design-build exists to close that gap. Here’s how to tell whether it’s right for your project, and how to choose a commercial design-build contractor in Winnipeg once it is.
What a commercial design-build contractor actually does
In a design-build project, one firm is responsible for both the design and the construction. Instead of an architect finishing drawings and handing them to contractors to price, the builder is at the table while the building is designed.
That changes three things for an owner:
- Cost is checked as the design develops, not discovered at tender
- One point of responsibility. When something doesn’t work, there’s no argument between designer and builder about whose problem it is
- Faster starts. Site work can begin while later packages are still being drawn
The mistake happens before you call anyone
Most owners start by collecting contractor names. The better first question is how you want the project delivered, because that decides what kind of contractor you need, what contract you sign and who carries which risk.
There are three common delivery models in Canadian commercial construction, each with a standard CCDC contract behind it.
1. Design-bid-build with a general contractor
You hire an architect, finish the drawings, then tender them to general contractors for a fixed price.
- Contract: CCDC 2, Stipulated Price Contract
- Works well when: the design is complete and unlikely to change
- Watch for: the contractor has no input into the design, so constructability and cost problems surface after tender, as change orders
2. Construction management
A construction manager joins during design, advises on cost and sequencing, then manages the trades during construction.
- Contracts: CCDC 5A (services only) or CCDC 5B (services and construction)
- Works well when: the project is complex, phased or needs to start before every drawing is done
- Watch for: costs are open-book, so it suits an owner who wants to see the numbers. Under CCDC 5B the parties can agree a guaranteed maximum price once the design is far enough along
3. Design-build
One firm carries design and construction together.
- Contracts: CCDC 14 (Design-Build Stipulated Price) is the standard form, but many design-build firms deliver the same integrated approach under a construction management contract such as CCDC 5B
- Works well when: you want one team accountable for both cost and design
- Watch for: agree your requirements clearly up front, because you give up some direct control over the design team
Which model fits which commercial project
- Office and retail fit-up in an existing building: the scope is contained and the base building exists, so a stipulated price or design-build both work well. See commercial tenant fit-up in Winnipeg.
- New retail or professional office buildings: design-build or construction management. Early builder input on structure, envelope and mechanical systems is where most of the savings are.
- Mid-rise mixed-use: construction management or design-build. There are too many unknowns on day one to fix a price responsibly. See large multi-family construction in Winnipeg.
- Anything near the Part 9 / Part 3 code line: involve a builder before the drawings are final. The 3-storey code line can move a budget more than any finish selection.
Choosing the delivery model is the first conversation on every commercial construction management project we take on, before anyone prices anything.
What to look for in a commercial design-build contractor
“Who leads in design-build?” is the wrong question. Ask which firm has done your kind of building and can show you how they manage cost during design:
- Comparable projects. Mid-rise, office, retail or fit-up: ask for buildings like yours, in Winnipeg, and what stage they’re at
- In-house design coordination. Who runs the architects and engineers, and how often is the design priced as it develops?
- An open-book cost process. Will you see trade pricing, or only a final number?
- Their contract of choice. A firm that can explain why it would use CCDC 2, 5A or 5B on your project understands where the risk sits
- Who’s on site. Meet the project manager and superintendent, not just the sales lead
What to check before you sign, in Manitoba specifically
WCB Manitoba clearance
Ask for a clearance from the Workers Compensation Board of Manitoba. It confirms the contractor’s account is in good standing. If a contractor you hire isn’t, you can end up liable. Owners commonly get a fresh clearance before releasing the final payment, not just at the start. WCB Manitoba explains clearances here.
The 7.5% lien holdback is your obligation
Under Manitoba’s Builders’ Liens Act, the owner must hold back 7.5% of each payment and keep it for at least 40 days after substantial performance, completion or abandonment. It protects subcontractors and suppliers. A contractor who suggests skipping it is asking you to carry their risk.
Insurance and bonding
Confirm commercial general liability limits, who carries builder’s risk coverage, and whether performance and labour-and-material bonds are included or priced separately.
Permits
Agree in writing who applies for the City of Winnipeg building permit and who owns delays if the application comes back. It’s one of the most common gaps between two otherwise similar bids.
How to compare commercial construction bids in Winnipeg
Two bids are only comparable if they carry the same assumptions. Line them up on:
- Exclusions. What’s specifically not included? Most of the gap between bids lives here.
- Allowances. Placeholder amounts for items not yet designed. Low allowances make a bid look cheap.
- General conditions. Site supervision, temporary facilities, cleanup and winter protection. Winnipeg winters make this line matter.
- Contingency. Whose is it, how much is it, and what happens to what’s left over?
- Schedule. A bid without a realistic schedule isn’t a price.
- The design’s completeness. Are both contractors pricing the same drawing set, or has one assumed the gaps will be filled at your cost?
If one bid is dramatically lower, ask that contractor to walk you through their exclusions. The answer usually explains the number.
Case study: mid-rise mixed-use at Railside
Summit is construction manager on Site 11 and Site 13 at Railside at The Forks, two of the mid-rise buildings in one of the largest residential developments underway in Winnipeg.
It shows why the delivery model matters on commercial and mixed-use work:
- Two uses, one structure. Every Railside building has ground-floor commercial with residential above: two occupancies, two sets of code requirements
- Many parties. Several ownership groups, architects and builders each run their own building inside a shared master plan
- Part 3 construction. At four to six storeys, every building is on the more demanding code track
A single fixed price tendered on incomplete drawings would have loaded all of that uncertainty into a contingency the owner can’t see. Construction management keeps the cost open-book: the owner sees trade pricing as it comes in, and decisions get made while they’re still cheap.
Planning a commercial or mixed-use project in Winnipeg? We’ll tell you which delivery model fits and what it means for your budget before you commit. Talk to the Summit team.
“Won’t design-build or construction management cost more than a fixed bid?”
Not necessarily, and it’s the right question to ask.
A stipulated-price contractor carries the risk of the unknowns, so that risk is priced into the number, and you never see how much of it there is. Under construction management the contractor’s fee is visible and trade costs are open-book. If the project runs well, you keep the difference.
A fixed price genuinely wins on a fully designed, straightforward building with little left to discover. For those, tender it. For everything else, the question isn’t “which is cheaper?” It’s “who is carrying the risk, and am I paying for it twice?”
Your next six steps
- Decide the delivery model before shortlisting contractors
- Confirm your project’s code track, Part 9 or Part 3
- Shortlist three firms that have built your building type in Winnipeg
- Ask each for a WCB Manitoba clearance and insurance details
- Compare bids on exclusions, allowances and schedule, not the bottom line
- Set up the 7.5% holdback before the first payment goes out
Where Summit fits
Summit Design Build is a Winnipeg design-build firm for commercial, mixed-use and multi-family projects. Depending on the project, we contract under CCDC 5A, CCDC 5B or CCDC 2, and we’ll explain which fits yours and why. The same team covers architectural design, construction and, if you want it, management of the finished building.
Keep reading
- Railside at The Forks: what Summit is building: construction management on a mixed-use, multi-developer site
- Multi-family construction in Winnipeg: the 3-storey code line: the threshold that changes a project’s budget
- Winnipeg Malls and Corridors zoning: what a small commercial lot can hold now