January 17, 2019

ConsensusDocs 305 – New Tool to Contract for Lean Projects

Joel W. Darrington
Contracting Counsel, DPR Construction

ConsensusDocs has provided a great resource to the construction industry with its recent publication of the CD305 Lean Construction Addendum. For the many projects that are not able or ready to utilize an IPD Agreement, now there is an industry standard form that can be added to a project’s design and construction contracts to provide for a wide range of Lean design and construction practices without triggering violation of the front-end contract’s provisions…Read More

As the awareness and embrace of Lean Construction continues to expand in the construction industry, ever-increasing numbers of projects grapple with the question of how to address Lean Construction principles and methods in their design and construction contracts. Project owners have taken primarily three approaches on this:

  • Seeking the highest level of Lean performance, owners have used Integrated Project Delivery (IPD) agreements, such as the ConsensusDocs 300, sometimes called integrated forms of agreement (IFOAs).
  • When they or their team are not willing or able to use an IPD agreement, other owners have used legal counsel to custom-draft design and construction contracts under more conventional project delivery models such as CM-at-Risk, to address Lean design and construction methodologies.
  • Other owners will seek to promote Lean behaviors among the project team independent of what is in the design and construction contracts.

Now, project teams have a new option for contracting for a Lean project when they cannot implement an IPD Agreement. In 2018, ConsensusDocs published the ConsensusDocs 305 Lean Construction Addendum (CD305). For the first time, we have a non-IPD contract document available to the whole industry that provides for a wide spectrum of Lean design and construction practices. With the CD305, an Owner can use either an industry standard form front-end contract or its own standard contract and add to it a Lean Construction Addendum that reflects the best thinking in the industry around Lean design and construction.

What is the CD305?

Let’s be clear right up front. The CD305 is not a complete contract. It has no compensation terms, no schedule, no project scope. Instead, the CD305 is a document you add to a project contract to provide for selected Lean project features.

In the graphic above, the bi-directional arrows show the contracts for the project. There are separate contracts between the owner and each of the design professional and general contractor and also separate lower-tier subcontracts or design contracts. The CD305 gets added to each of those contracts as an addendum. Note, however, that the CD305 is not intended for use on design-build projects (a future ConsensusDocs document on Lean Construction is under development for design-build projects).

The CD305 does not change the compensation or liability of the parties under the contracts it gets attached. Its exclusive focus is providing clear terms for the parties to agree on how they will incorporate Lean design and construction methods into their project.

Using the CD305

Because the CD305 is attached to both the design professional (architect or engineer) and constructor (general contractor or construction manager) agreements with the owner, it requires a joint negotiation between the owner, design professional and constructor and ideally their key design consultants and trades. Once the CD305 is finalized among the parties, then it gets separately attached and incorporated into each party’s contract, binding everyone to the same set of Lean Construction provisions. Also, the CD305 provides that it governs over any contrary provisions in the front-end agreement, so that project teams can be assured that their implementation of the Lean methods in the Addendum will not trigger a breach of their main contracts.

ConsensusDocs recommends finalizing the CD305 as early in the project as the owner can accommodate. Certain Lean project features are for the conceptualization and design phases, so a team loses the benefit of those features by waiting until later in the project. However, there is still value in implementing Lean only during the construction phase, so if that is your project’s situation, you can still use the CD305.

The CD305 was designed to be flexible so that it can be adapted to a variety of project contexts and Lean deployments. It uses a check-the-box approach to allow project teams to select the Lean features that will apply to their project. The CD305 allows teams to selectively address one or more of the following Lean practices during the design and pre-construction phases simply by checking the applicable boxes:

  • Joint Worksite Investigation: the project team evaluates what site information is needed, comes up with options for different levels of site investigations, aligns on the appropriate level of investigation and reports the investigation’s findings and recommendations.
  • Evaluation of the Owner’s Program
  • Validation Study: the project team validates whether the owner’s program for the project can be designed and constructed within the owner’s maximum budget. A conceptual (or schematic) level of design and cost estimating is done to give an early check on whether the owner’s business case for the project is viable.
  • Construction Team Cost Modeling
  • Target Value Design: Section 6.5 describes an integrated design process featuring Target Value Design (TVD). TVD is one of the key Lean design and construction methods for achieving greater project value. It requires intense collaboration of the designers and constructors and a disciplined approach to value determinations and decision-making.
  • Risk Identification & Management Planning: the project team conducts a risk workshop to identify and evaluate risks, then prepares a risk register to describe key risks and who is responsible for monitoring and leading team efforts at managing that risk. A risk management plan is developed to put in place contingency plans for addressing specific risks.

General Lean Principles & Methods

The CD305 also has standard provisions that apply to any Lean Construction project. Article 3 of the CD305 starts by laying out the major objectives of Lean Project Delivery:

  1. collaborating throughout the Project with all members of the design and construction team;
  2. planning and managing the Project as a network of commitments;
  3. optimizing the Project as a whole, rather than optimizing particular pieces; and
  4. tightly coupling learning with action, which promotes continuous improvement throughout the life of the Project.

Article 3 also describes the principle of making reliable commitments and keeping them, which is fundamental to reliable workflow and the process of planning and managing the Project as a network of commitments.

The CD305 provides for a collaborative leadership structure by forming a Core Group. Article 4 describes the Core Group’s role and operations. Each of the owner, design professional and constructor appoint a Core Group representative empowered to direct and coordinate its company’s work. The Core Group together manages the work using Lean methods for the best interest of the project. They are responsible for the project’s key decisions, and they make consensus decisions. They are also responsible for regular team performance evaluations to foster continuous improvement.

If the Core Group cannot come to a unanimous decision, the owner may issue directions it believes to be in the best interest of the project, but that will be subject to any further dispute resolution provisions of the contract to which the Addendum is attached.

Article 5 of the CD305 requires the Project team to use a pull scheduling approach to planning and scheduling the work. The CD305 describes features of the planning system that the team must incorporate, all of which would be satisfied by a full implementation of the Last Planner System® promulgated by the Lean Construction Institute (LCI).

Construction Phase Lean Methods

The last article of the Lean Construction Addendum provides for construction phase Lean methods.

Section 7.1 provides for a Lean approach to quality. To avoid addressing quality through re-work, it provides for the team to develop and implement a “Built-In Quality Plan” that addresses standardized work, agreed levels of quality, good hand-offs of work between trades, and continuous improvement.

Section 7.1 also provides for the construction team to develop an operations quality plan using the Lean principles of “5S”: sort, set in order, shine, standardize and sustain.

Under Section 7.2, the constructor develops a materials logistics plan that promotes just-in-time delivery of material to the worksite consistent with the current pull-planning work plans.

In Sections 7.3 and 7.4, the CD305 provides for a Lean approach to submittals and requests for information. The basic idea is that the team member needing information directly contacts the team member who can provide the information, figuring out the resolution together, and then documenting the resolution for the benefit of the entire project team.

Finally, Section 7.5 requires the team to develop a phase plan specific to closing out the project so that everyone is aligned as to what needs to be done to satisfy the project stakeholders without needing a long process of inspections and re-inspections for reaching substantial completion.


ConsensusDocs has provided a great resource to the construction industry with its recent publication of the CD305 Lean Construction Addendum. For the many projects that are not able or ready to utilize an IPD Agreement, now there is an industry standard form that can be added to a project’s design and construction contracts to provide for a wide range of Lean design and construction practices without triggering violation of the front-end contract’s provisions. For helpful resources visit: https://www.consensusdocs.org/lean_webinar and the ConsensusDocs Lean Addendum Guidebook.

About the AuthorJoel W. Darrington is the Contracting Counsel at DPR Construction and a member of the Lean Construction Institute. He has published and presented widely on Integrated Project Delivery, Lean Construction and contract incentives for improved project outcomes.