If your drawings are complete and you want one fixed price before work starts, hire a general contractor on a stipulated-price contract. If design is still changing and you want a builder's pricing and constructability input early, with the option to start some work before every drawing is done, construction management can fit better. This guide compares the two models for commercial owners, landlords and property managers in Metro Vancouver using the Canadian standard contracts most projects are built on: CCDC 2, CCDC 5A and CCDC 5B.

TL;DR

  • General contractor (CCDC 2, stipulated price): one contract, one fixed lump-sum price for the project. The contractor holds the subcontracts and carries the risk that trade costs come in higher than its price.
  • Construction manager for services (CCDC 5A): the construction manager acts as a limited agent of the owner. The owner signs the trade contracts directly (usually CCDC 17) and keeps the cost risk.
  • Construction manager for services and construction (CCDC 5B, "CM at risk"): the construction manager advises during design, then performs the work on actual cost plus a fee. A guaranteed maximum price (GMP) or conversion to a stipulated price can be added by change order.
  • Design needed to price: a stipulated price needs design that is substantially complete. Construction management can start with design still in progress.
  • Safety: on any site with more than one employer, name the prime contractor in writing. Without a written agreement, WorkSafeBC treats the owner as the prime contractor.

What is the difference between a general contractor and a construction manager?

The difference is who holds the trade contracts, how the builder is paid and who carries the cost risk.

A general contractor is hired once design is far enough along to price. Under CCDC 2, the Stipulated Price Contract, the owner and the contractor agree on "a single, pre-determined fixed price, or lump sum, for the project." The general contractor hires and manages the trades. If a trade costs more than the general contractor carried, that is the general contractor's problem, not yours. If it costs less, the general contractor normally keeps the difference. This is the familiar design-bid-build route: your architect or designer finishes the drawings, contractors bid, and you sign with one of them. Our guide to what a general contractor does covers the role in more detail.

A construction manager usually joins earlier, while the design is still being developed, to give estimating, scheduling and constructability advice. After that, the two CCDC forms split:

  • CCDC 5A (services only). The construction manager advises and administers the trade contracts, but the trades contract with you. CCDC 17 is the standard stipulated-price contract between the owner and each trade contractor on a CCDC 5A project.
  • CCDC 5B (services and construction). The construction manager also performs the work. CCDC describes it this way: at the outset the work is done "on an actual-cost basis, plus a percentage or fixed fee." The parties can later agree to a GMP, a GMP with shared savings, or conversion to a stipulated price.

This is a different question from hiring your own project manager to oversee a contractor; see contractor vs project manager.

How do the two models compare?

General contractor (CCDC 2)Construction manager, services (CCDC 5A)Construction manager, services and construction (CCDC 5B)
When engagedAfter design is substantially completeDuring designDuring design
Who holds trade contractsGeneral contractorOwner (CCDC 17)Construction manager
Basis of paymentFixed lump sumFee for services; trades paid their own contract pricesActual cost of the work plus a fee; GMP or stipulated price optional
Cost transparencyPrice only; contractor's costs are not openOwner sees every trade contractOpen book on cost of the work
Who keeps buyout savingsGeneral contractorOwnerOwner, or shared under a GMP savings option
Who carries trade-cost riskGeneral contractorOwnerOwner, unless capped by a GMP or converted to stipulated price
Design needed to priceSubstantially completeCan start early; trades priced package by packageCan start early; GMP set once design is far enough along
Owner's admin loadLowest: one contractHighest: many contractsModerate: one contract, open-book review
Schedule approachDesign, then bid, then buildPhased or fast-track possiblePhased or fast-track possible

When is a stipulated-price general contractor the better choice?

A stipulated price is usually the better fit when the scope is defined and the owner values budget certainty and a simple contract. Typical examples:

  • a tenant improvement with complete drawings and a fixed move-in date
  • a retail, restaurant or office buildout built to a landlord's and tenant's approved plans
  • repairs and renovations where the scope can be walked, photographed and written down before pricing
  • projects where the owner doesn't have staff to review cost reports every month.

The trade-off is that the price is only as good as the drawings. Anything missing or changed becomes a change order, so read our posts on construction change orders and how big a contingency to carry. For how a lump sum compares with paying costs plus a markup, see fixed price vs cost plus.

When does construction management make sense?

Construction management tends to suit projects where waiting for complete drawings would cost more than the uncertainty of starting early:

  • larger or more complex base-building upgrades, where builder input during design can save redesign later
  • phased work in occupied buildings, where packages are released floor by floor or area by area
  • fast-track schedules that need demolition or long-lead items ordered before design is final
  • owners who want to see the actual cost of every trade and are able to review it.

The trade-off is that you don't have a single fixed number on day one. Under CCDC 5A you also hold every trade contract yourself, which means more administration and more risk sitting with you. If you want one party to handle both design and construction for a fixed price, that is a third route, design-build (CCDC 14); see why choose design-build.

What is a guaranteed maximum price, and what should you check?

A guaranteed maximum price is a ceiling on what you pay for the work under a construction management contract. Costs below the ceiling are paid at actual cost plus the fee; costs above it are the construction manager's, subject to the contract terms and approved changes. In the 2025 edition of CCDC 5B, the GMP, GMP with shared savings and stipulated-price options each have their own appendix, and each is exercised by change order.

Before agreeing to a GMP, check:

  • What the GMP includes. Which drawings and specifications it is based on, and what counts as a change.
  • Contingencies. Whose contingency is inside the GMP, who can spend it, and what happens to what's left.
  • Savings. Whether savings below the GMP come back to you in full or are shared, and in what split.
  • Timing. When the GMP or the conversion to a stipulated price will be set, and how far along design must be.
  • Audit rights. How you can review the cost of the work.

These are contract points, not just pricing points. Have your lawyer review the supplementary conditions before you sign any CCDC form.

Who is the prime contractor for safety under each model?

On any site where workers of two or more employers work at the same time, WorkSafeBC says a written agreement should name the prime contractor. If there is no written agreement, the owner is considered to be the prime contractor. Under a stipulated-price contract, the general contractor commonly takes on that role. Under construction management, and especially when the owner holds the trade contracts, make sure the agreement says clearly who is prime contractor. See prime contractor responsibilities under WorkSafeBC.

How do you choose? A 5-question checklist

  1. Is the design substantially complete? Yes points to a stipulated-price general contractor. No points to construction management.
  2. Which matters more: a fixed price now, or seeing actual costs? Budget certainty points to a general contractor. Cost transparency points to construction management.
  3. Does the schedule require starting before design is done? If yes, construction management or phased packages.
  4. Does your team have time to manage contracts and review cost reports? If not, one stipulated-price contract keeps your administration lowest.
  5. Will the building stay occupied? Either model can work. Decide who is prime contractor and how phasing will run before you pick.

When you compare proposals under either model, our guide to reviewing contractor bids explains how to compare them line by line.

Our perspective

Multigroup Contracting works as both a fee-based construction manager and a commercial general contractor in Metro Vancouver since 2016. We are registered with WorkSafeBC and carry $5 million in liability insurance. We build commercial projects and tenant improvements for owners, landlords and property managers. On fixed-price general contracting work, our proposals include photos of current conditions, a written scope and a lump-sum price, with optional items on separate lines so you choose what's in. When design is still moving or you want open-book costing, we can work as a construction manager on an actual-cost-plus-fee basis.

Most projects at tenant improvement and commercial renovation scale don't need a complex delivery model. They need drawings or a scope that is clear enough to price, and one contractor accountable for the price, the trades and the site. When the project fits construction management better, we talk through that model the same way.

— MultigroupTeam

Talk through your project

Not sure which model fits? Call 778-819-5933, email info@multigroup.ca, or send your drawings or scope through our contact page. Include the address, what's being built, the drawings you have, and your target start date.

FAQ

Is construction management more expensive than hiring a general contractor?

Not necessarily. Under a stipulated price, the contractor's price includes an allowance for the trade-cost risk it carries. Under construction management, you pay the actual cost of the work plus a fee, and you carry more of that risk yourself unless a GMP caps it. Which costs less depends on the project, how complete the design is and how the contract is written.

Can a general contractor give input before the design is finished?

Yes. Owners can ask a general contractor to review drawings or a scope for budget and buildability before tender. The contract for the build is still a stipulated price once the design is complete enough to price.

Can a construction management contract convert to a fixed price?

Yes. CCDC 5B lets the parties agree to a guaranteed maximum price, a GMP with shared savings, or conversion to a stipulated price contract. In the 2025 edition, each option has its own appendix and is exercised by change order.

Which model is better for a tenant improvement?

For most tenant improvements with complete drawings and a fixed move-in date, a stipulated-price general contractor is the simpler choice: one contract, one price and one party responsible for the site. Construction management is more common on larger, phased or fast-track projects where design is still moving.

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