Reducing Design Risk: Early Contract Involvement

The early stages of a development project are the riskiest.

A Developer is taking a calculated risk that the scheme they are designing and consenting can be built on time and on budget. A big issue developers run into is designing a project which is far too expensive to be built-out profitably. In this instance, the only option is go back to the drawing board which will require additional time, consultants fees, and new consent applications and/or amendments.

Early Contractor Involvement (ECI) is process of engaging a Builder during the design process to provide feedback on design, methodology, programme, specification, and cost.

This is a great way to de-risk a project, and is a tool we are using on bespoke projects currently. However, there are some key considerations when getting involved in an ECI process:

1. Strategic Contractor Selection:

The decision to engage a Contractor under the ECI process is a pivotal one. The chosen Contractor becomes a strategic partner for the entire project duration, emphasizing the need for a meticulous selection process.

2. Fail Safe Exit:

The intention of the ECI process is for this to translate into a Build Contract and deliver the project. However, its important to ensure that both parties can part-ways in the event that the final contract price doesn't reflect the early budgets provided. This should be allowed for in the ECI Agreement.

3. Clear ECI Agreement:

The establishment of a detailed ECI Agreement proves essential. Clear delineation of the level of Contractor input required, including the duration of design involvement and the number of budget iterations, sets the foundation for a well-structured collaboration.

4. Fair Compensation for Expertise:

The Contractor will be providing valuable insights into your project, taking over the role of a paid Quantity Surveyor. Acknowledge the Contractors value and pay for their time, especially in the instance where the ECI process does not translate into a Build Contract.

-

Stay tuned for further insights and detailed analysis as we navigate the complexities of our ongoing ECI project.