Amal Group Early Contractor Involvement Team
Early Contractor Involvement (ECI) allows the project sponsor to gain greater certainty on
price and risk outcomes for the project.
Long term and complex projects lend themselves well to relationship style contracting and
ECI is considered to be best practice in this area. ECI contracts have a strong emphasis on
establishing mutual trust, good-faith, fairness and cooperation.
ECI is of particular use in the current strong construction market where there is an
oversupply of projects leading to less competitive bid processes and adverse outcomes for
project sponsors.
The Amal Group has a team of Consultants with extensive worldwide ECI experience to help
a client appoint a construction contractor prior to commencing, or in the early stages of the
pre-feasibility study.
During the pre-feasibility stage of the project, capital costs and project outcomes are most
greatly impacted. In the current high inflation construction market, having the involvement
of a construction contractor at such an early stage will more likely lead to accurate pricing.
The project sponsor has strong input and involvement during the pre-feasibility and
feasibility stages, but does not need to maintain a large project team involvement during
the delivery stage of the project.
Contractors like the approach as it allows them to have a team of people involved all the
way through a project. This means that the team are contributing more, the contractor
retains more knowledge in-house in a competitive labour market and their staff retention is
higher as it allows greater involvement and challenges.
The contractor's design teams are freed up to work only on actual projects and are not
involved with tenders and bids which may not be won.
In many contracting strategies the contractor is asked to bear many risks, including
unquantifiable risks. In the current strong construction market this usually results in the
contractor building worst case contingencies into the cost estimate as they know their
competitors will likely do the same. ECI allows the risks to be allocated by negotiation to the
party best able to bear it, and should lead to better outcomes in terms of pricing.
The form of contract provides cost reimbursement for the services of design development
and price negotiation. For the delivery phase, the contract can range from fixed time/fixed
price to a schedule of rates dependent on desired risk allocation.
To provide incentives to the contractor, design and construction stage bonuses are payable
based on savings against both budget and the agreed price.