Last edited 14 Jun 2018

Early contractor involvement

On traditional construction contracts, the client first appoints consultants to design the project in detail, and then a contractor is appointed to construct the works.

However, this can be seen to be a somewhat fragmented and adversarial project structure which does not give the contractor the opportunity to contribute to the development of the design that they will be required to construct.

Civil Engineering Procedure 7th Edition, published by the Institution of Civil Engineers (ICE) suggests that early contractor involvement (ECI) denotes ‘…a non-traditional procurement route, where a contractor’s skills are introduced early into a project to bring design ‘buildability’ and cost efficiencies to the pre-construction phase’.

Typically, early contractor involvement might be enabled by a two-stage tender process, used in the first stage to procure contractor involvement in the design process, and in the second stage to procure construction of the works. Other procurement routes, such as design and build, construction management, or management contracting might also allow a contractor to become involved in the design stage.

Early contractor involvement can enable the contractor to:

Contribute to the design process.
Build a better team-working ethic.
Introduce innovations.
Advise on buildability, sequencing, and construction risk.
Advise on the packaging of the works.
Advise on the selection of specialist contractors.
Spend more time developing a construction strategy, recruiting staff, identifying partners and so on.
Help develop the cost plan and construction programme.
Help develop the method of construction.
Obtain prices for work packages from sub-contractors or suppliers on a open book basis.
Prepare a site layout plan for the construction stage.
Draft the preliminaries for specialist and trade contractor bid documents.
Assist with planning applications on matters concerning the build phase, such as; waste disposal, construction traffic movements, tree protection and so on.

It is particularly well-suited to large or complex projects, but can be adopted on any project.

The use of a Pre-Construction Services Agreement (PCSA, sometimes referred to as Pre-Contract Services Agreements) can enable the client to employ a contractors before the main construction contract has commenced.

The NEC3 Engineering and Construction Contract (ECC) Options C and E also include provisions for early contractor involvement. See NEC early contractor involvement for more information.

Early contractor involvement may require that the contractor undertakes the early design stages themselves, or that they simply contribute to the design development which is undertaken by others. There can sometimes be a degree of ambiguity about precisely what the contractor is expected to do in these stages, and this can cause confusion and dissatisfaction.

Another perceived disadvantage of early contractor involvement is that the contractor becomes involved in the project before it has been designed in detail, and so they are unable to give an accurate price for the construction works. Whilst contracts generally provide for some element of transparency and competition in the second state appointment, the reality is that other tenderers may have lost interest in the project, and the embedded contractor will have a significant competitive advantage.

The earlier the contractor is appointed, the greater the potential benefits they are able to bring to the project, but the less able they are to provide accurate pricing information for the second stage, and to the less competitive the second stage tender process is likely to be.