Which contract type allows for construction to begin before the complete design is finalized?

The contract type that allows for construction to begin before the complete design is finalized is the Cost Plus contract. This arrangement is especially useful in projects where there may be uncertainties in the design process or where design elements may evolve during the construction phase.

In a Cost Plus contract, the owner agrees to pay for the actual construction costs incurred, plus an additional fee for the contractor's overhead and profit. This flexibility encourages a collaborative approach, where construction can commence based on preliminary designs and be adjusted as more information becomes available or as design details are finalized. This method can also facilitate quicker project delivery, as it allows for overlapping the design and construction phases.

In contrast, stipulated price contracts, such as CCDC 2, typically require the completion of design work before construction begins, as this type of agreement is based on a fixed contract price determined after the design is fully defined. Design-Build contracts integrate both design and construction under one contract but also aim to have a complete design prior to construction’s substantial commencement, to ensure single-point accountability. Lastly, while Construction Management contracts like CCDC 5A involve a contractor managing the project on behalf of the owner, they still rely on finalized designs for accurate cost assessments and scheduling.