Under an Early Contractor Participation (ECI) system, an individual entrepreneur is selected at an earlier stage of the process and remunerated for their work on the system. [1] This can be done either in the pre-/concept phase or in the detailed design phase, depending on the customer`s requirements. [2] The contractor may then use their knowledge and experience to influence the design of the project to increase constructability or value, and may be asked to provide input on risks at the construction stage. [2] The contractor may choose to involve its supply chain subcontractors in the process to provide additional expertise. [3] The contractor may price the work during the process in consultation with the client and the designer. [1] NEC4 is the latest form of NEC contracts, published in June 2017. “NEC4 contracts can be used for a wide range of works, services, supplies and large projects to small projects. There is no standard form of contract for contractor management, and different people use the term “managing contractor” to mean different things. Customers often use a modified form of AS 4000 or AS 2124 to document a subcontract (or AS 4902 or AS 4300 if the contractor is to be responsible for the design). The ECI clauses cover two main design options. When using the first design option, the employer hires a contractor to help plan the project or certain elements of the work. The price of the construction phase is established and if an agreement is reached, the project manager issues notice to proceed to the second phase of delivery, including all pending designs, under a standard NEC ECC Option C (Target Cost) contract. It is essentially a form of collaborative contract design.

Similar to alliancing, ECI envisions early contractor involvement and adoption of “better for the project” hires by all parties. The contract is often accompanied by a formal bespoke instrument or ECI agreement explaining how the agreement will work. There is only one “% charge” in NEC4, and it is now also in PSC4. Events in defined costs: The effort to prepare for compensation events has been expressly excluded from the costs defined in NEC3 contracts. This has been criticized as being too harsh for suppliers. However, in most cases, a GMP contract is simply an administrative arrangement under which the contractor must do its best to ensure that the total price of the contract does not exceed a designated dollar value. If a business partner is in default, it is at the customer`s own risk. A typical form of construction management contract is AS 4916, which you can read about here. If you want to know more about construction management contracts in general, click here. Not sure if the ECI is right for you? Click here to learn more about the different types of construction contracts. This supports the development of robust construction programs and improved risk management and health and safety. As with any construction contract, the key to understanding the agreement is not to dwell too much on the title of the document.

Instead, you should focus on the content terms of the document and, in particular, what the contractor will ultimately be paid for. In addition, when using the second design option, the employer hires the contractor to carry out the design, if necessary with the assistance of the employer`s advisor. Once the proposals and prices have been agreed, the project manager issues a request to proceed to the second phase and deliver the work under a standard NEC ECC Option C or E contract (eligible for reimbursement). Early Contractor Participation (ECI) is a type of construction contract in which the prime contractor intervenes at an early stage of a project to contribute to the design phase.