New ‘early contractor involvement’ clauses for ECC
Early contractor involvement (ECI), where a contractor takes part in the design development and construction planning stage of a project, is now widely recognised as beneficial.
Adherents in the UK include High Speed Two, which says ECI, ‘supports improved team working, innovation and planning to deliver value for money.’
Two-stage ECC contract
However, until now the design development and construction planning stage on NEC projects has often been contracted separately from the main detailed design and construction stage. NEC has published a standard additional clause to enable a single NEC3 Engineering and Construction Contract (ECC) to be used for both stages.
According to Peter Higgins, NEC consultant and leader of the drafting team for the clauses, ‘This will allow the Contractor to be appointed under a two-stage ECC contract before details of what is to be constructed have been fully developed and priced.’
Two ECI approaches
He says two approaches to ECI are covered by the new clauses.
‘The Employer can engage the Contractor to assist the Employer’s consultant in designing the project, as well as to design specific elements. Following agreement of prices for the construction stage, the Employer then instructs the Contractor to deliver the works, including any outstanding design, under standard ECC Option C (target contract with activity schedule) terms.
‘Alternatively, the Employer can appoint the Contractor to carry out the design with assistance from the Employer's consultant. The Employer then instructs the Contractor to deliver the works under standard ECC Option C or E (cost reimbursable contract) terms. If using Option E, the Contractor can also be incentivised to provide a cost-effective design by sharing in the savings on the Employer's budget, which includes other relevant costs incurred by the Employer.’
January 2016 update on the ECI Clause: The clause and guidance have been revised to correspond with the "How to" guide being published shortly. This includes a change to the way the incentive mechanism is operated and a number of textual corrections.
ECI TRAINING COURSE
NEC has developed a training course intended for clients and their supply chains to understand the provisions of the additional ECI clauses to enhance their relationships and benefit their businesses.
This course will explore the two approaches to ECI covered by the new clause.