Early Contractor Involvement (ECI) Concept

I will keep sharing and discussing advanced topics in the construction management field, hoping for a significant tangible positive impacts and improvement in the overall construction industry, and its performance.

?I will also call it “Early Contractor Engagement” or “Early Contractor Integration”.

“The model was first studied in 1976 and studies through the 1990s showed that adopting such a model could generate 10% savings on project time and 7% on cost. The wider adoption of ECI was a recommendation of the 1994?Latham Report?into systemic failings in the British construction industry; the practice became increasing popular during the early 2000s” – Wikipedia.

“Early Contractor Involvement (ECI) has frequently been shown to add value to the project delivery process, as both owner and contractor gain a better understanding of project risks, and this allows the design to be optimized regarding buildability and supply. Also, an enhanced focus at the award stage on supply chains and resilience of delivery models can help ensure on-time delivery.” – CRUX 2021, HKA.

This concept was founded on the principle of engaging, partially integrating, and in some delivery models the full integration of, the Contractor or Construction Experts at early stages in the delivery process of complex construction/Engineering projects.

This process can be achieved on different degrees of integration/involvement; starting from the CM advisory/agency or the PM models, all the way through CMAR, the bridging models, DB, EPC/Turnkey, up to IPD, lean IPD, Alliancing, considering that even the alliancing delivery system has so many other systems branching from the baseline core model. In addition to many other exceptional models and delivery systems.

The selection of the degree of involvement/integration would be depending on the delivery strategy, which must align with the strategic business objectives and constraints, and derived from higher levels governance and strategic management/leadership and control on the program/portfolio levels, which would be best suited for the project specific circumstances and the Owner/Developer needs, expectations, risk appetite and tolerance, among others.

ECI can technically occur by procuring the contractor’s services throughout specific contracts, with defined scopes and services, and under specific project delivery models/systems; the alternative PDS, while the DBB/Design-Bid-Build model isn’t one of options.

It is well known for construction experts that, the more the project advances in its lifecycle and the delivery process, specially after the completion of bid process, and later throughout the construction phase, changes would became more limited, with stricter constraints and ability to implement due to the associated impacts; in terms of costs and/or EOTs (and other impacts depending on the nature, complexity, and scope of the change), and in some cases those changes would have detrimental significant impacts on the overall success of the project, adding to that the associated communication complexities, negative delays, and substantial costs increase, which in some cases would lead to several years of delays, and inflating ?the initial project’s budget up to 400% on some projects, or could be even more.

In addition, it is also well known for construction experts that changes can be tactics and strategies to maximize the contractor profits margins, specially under the DBB model, and can be deployed as an overall strategy to recover from the initial (apparent) under-bid to win the project, hoping for the award of significant changes to the baseline scope, with profit margins on changes that can reach up to 25%, and in some cases up to 40% depending on the marketplace, baselined to the same contractual scope price, as if it was included in the baseline scope. ?

Or changes can be a tactic/strategy to recover from the tight construction schedules due to owners’ pressure on contractors to award projects, as a condition/evaluation basis for their proposal’s approval, or can be deployed to attain EOTs, to mitigate the risk of delays and the risk of LDs, or in some complex circumstances to establish concurrency when the contractor in delay.

ECI is allowing for the Contractor/Construction Experts inputs and collaboration throughout the early stages/phases, and considered one of the strategies to achieve successful projects.

In addition, ECI would definitely add significant positive value and would accelerate the benefits realization process, through accelerating the delivery process, and bringing so many advantages to the delivery process and the decision-making table as early as possible, before it is too late to do so.

ECI is cost-saving strategy on the long-run, and would help with mitigating many risks including cost and schedule overruns, changes, disputes, costly ADR processes, among others.

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