Early Contractor Involvement (ECI)

Jonathan Hill
Traditionally in construction contracts, the client would appoint a consultant to design a project that would be later built by a contractor. This approach could be fragmented, adversarial and lacking continuity of responsibility through the various project stages. The traditional approach often bypasses or ignores the benefits that the contractor brings to the team; as such, success or failure could be determined before a contractor is on board.

Early Contractor Involvement (ECI), as the name suggests, has the Contractor being an integrated member of the team in the early stages of a project. This can be from as early as the feasibility stage if required, rather than after the main details of the project are already established, by which time many opportunities for improvement may have been missed.

ECI is being used on High Speed Two (HS2) where it encourages ‘improved team working, innovation and planning to deliver value for money...involving an integrated contractor and design team, appointed under an incentivised, two-stage contract’. This aids development of robust construction programmes and improved management of risk and health and safety.

The sooner a Contractor is involved in any project, the higher the potential benefits of ECI. The Contractor will contribute during the design process, advising on the buildability and sequencing of the project with potential for greater innovation.

ECI within NEC

NEC (New Engineering Contract) announced the introduction of ECI clauses for use within the third edition of the Engineering Construction Contract (ECC) in 2015. Using NEC4, ECI can be incorporated by inclusion of secondary option clause X22, which is a new addition in the fourth edition.

The ECI clauses cover two main options for design. Using design option one, the Employer engages a Contractor to assist the Employer’s consultant in designing the project, or specified elements of the works. The price for the construction phase is developed and if agreement is reached the Project Manager issues the notice to proceed to Stage Two for delivery, including any outstanding design, under a standard NEC ECC Option C (target cost) contract.

Alternatively, using design option two, the Employer appoints the Contractor to undertake the design, with assistance from the Employer’s consultant if required. When proposals and prices are agreed, the Project Manager issues the notice to proceed to Stage Two and deliver the works under a standard NEC ECC Option C or E (cost reimbursable) contract.

The total of the Prices for Stage Two is assessed using the Pricing Information included in the Contract Data, however it may be difficult to understand the scoping requirements for Stage Two before the contract and work in Stage One has commenced.

Option C incentivises the Contractor to be cost-effective via the pain/gain mechanism, but ECI also introduces an incentive payment which covers both Option C & E where the Contractor shares savings made against the Budget, as stated in the Contract Data.

The ECI clauses introduce two distinct stages to the project:

Stage One would typically include design and construction development, Stage Two covers the construction/delivery phase. During Stage One the Contractor submits design proposals, updated programmes and forecasts to the Project Manager for acceptance in accordance with the requirements of the Works Information. The Project Manager will issue a notice to proceed to Stage Two when the works outlined in Stage One are complete, changes to the Budget and the Prices are agreed and the Employer has confirmed the works are to proceed.

If the Project Manager withholds the notice to proceed to Stage Two, he issues an instruction removing the Stage Two works from the Works Information; this is not a compensation event. If the Prices cannot be agreed or the Contractor does not meet the requirements of the Works Information, the Employer may appoint another Contractor to complete the works in Stage Two. The Employer will retain the right to use the design provided by the Contractor during Stage One.

ECI enables appointment of a Contractor before details of the project have been fully developed, allowing the Contractor to contribute to design development and planning of the construction phase. Through use of ECI the importance of the Contractor, who is an expert in delivery of construction projects, is recognised. There is an undoubted increase in potential for innovation and promotion of a collaborative approach within the project team, which can only improve the quality and buildability of projects through the design phase and on to successful delivery.

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