Dear Team members, some assistance / your thoughts please, regarding the ECI (NEC3) and a proposed main works contract of NEC3 (Option A).
I’ve got a preferred contractor that’s signed up to the NEC3 and Client’s T&C’s from a framework. The Client’s FBC (and therefore full funding) won’t be approved for another 2 months at least, possibly 3months)
We’re looking to progress some early design works in the interim to mitigate delays to the final delivery / Completion. Rather than enter into a separate contract (PSC) for the Early works, I thought we might try using the ECI, but am aware that it is really for Opt C or E.
Can the ECI be used with a minimum of bother (proposed Contractor is happy with PSC / ECI / PCSA) either way, but client would prefer one contract - i.e. (ECI as Stage 1) and progress to Stage 2 (Main Works) if funding / approval all goes ahead as anticipated? (Obviously with the option not to proceed if the FBC is rejected - albeit a very remote chance / possibility? )
Can anyone assist with some direction / if it’s been done before please?
We could go ahead with a “run of the mill” PCSA, but I was sort of hoping to use the ECI?
Assistance much appreciated.
#ECI #PCSA #EarlyDesign
NEC’s ECI clauses are primarily designed to be used where there is: uncertainty about the scope; a requirement for significant collaboration amongst stakeholders; a need for joint ownership of risk and decision making; and where risks are difficult to quantify. It is only intended to be used with main Options C and E as it works on the basis shared risk and reward, and joint incentives to deliver the project within budget. Option A is essentially the least collaborative main Option as it pushes the most risk onto the Contractor and hence could work against the main objectives for using ECI.
This said, with careful thought there is no reason why ECI cannot work with Option A however the published ECI clauses would need amending to achieve this. You really need to think about what behaviours this approach could drive. For example is the Employer willing to incentivise the Contractor against performance against the Budget? If not then this won’t encourage the Contractor to design or construction within Budget which could delay / compromise proceeding to Stage 2 and drive a behaviour where the Stage 2 price is driven down by the Employer during Stage 1 to fit budget which then increases the likelihood of compensation events driving it back up again in Stage 2. Sound familiar? Oh yes, that’s how traditional procurements often played out which makes you question why you would do it in the first place? Is the Employer’s main driver based on procurement constraints which mean if it was two contracts then they would both need to be subject to competition? If you did follow ECI with Option A using amended clauses, then it would delay getting started on the design until you’d negotiated the contract for Stage 1 and Stage 2, and potentially delay proceeding to Stage 2 as I’ve already mentioned. Fundamentally the Employer needs to define their objectives prior to the right contract strategy being developed.