Easy on the eye: Inside the ECI Model

Easy on the eye: Inside the ECI Model

What is Early Contractor Involvement (ECI) and why should we look to consider it as part of our construction delivery model tool kit, post-COVID?

If you haven’t heard of ECI yet, you’re about to. It’s much more than an emerging acronym or buzz word. 

It’s a delivery model that the Europeans regularly use and have done for the last decade, and one that the construction sector, Infrastructure NZ and Government have been talking about in recent weeks. 

T+T Sector Director of Transport and Delivery Partners, Chris Perks, has had first-hand experience working in large infrastructure ECI delivery teams in the UK and believes adopting the model here could bring significant benefits to the right projects. We did a quick Q+A with Chris about ECI. 

What is ECI?

ECI is a delivery model that falls somewhere between an alliance, which is a relationship-style arrangement that brings together the client and one or more parties to deliver the project, and a Design and Construct (D+C) model, in which the main contractor takes responsibility for both design and construction.  

In my experience of the ECI model, the design and construction teams are a combined party usually working together. Both teams are involved in the process from the get-go: the model enables the client to proceed even if they have yet to finalise the design or have the necessary consents in place, i.e. working from a preferred route stage.  This allows the design and construction team to work together to develop and optimise the best option and delivery approach for the project in conjunction with the client, working to budget but creating a feasible project that the construction team can build. Having the design and construction team working together allows for fewer design iterations – the design team can check feasibility with the construction team as they go.

The design team will also have the opportunity to design solutions that fit with the contractor's construction methodology and available plant and material from an early stage. This model also can be employed after consents have been achieved and still present many of the same benefits as a smaller alliance. 

How is it different to what we currently do?

The ECI model, as mentioned above, provides a more collaborative and less confrontational style of delivery model compared to a ‘hard dollar’ D+C model, while still bringing a significant proportion of the collaborative practices and behaviours that have provided successful outcomes under the alliance delivery model. If a target cost approach is applied, it encourages early warnings as does the alliance model, but on a smaller scale. It also gives the client’s representatives oversight of the risks and can engage with them early to collaborate on solutions where appropriate but, importantly, the client’s representatives have a much better understanding of the risks and the mitigations that could be put in place. There is also the opportunity for the client to keep challenging the delivery team for innovation and value engineering if incentives are offered in the differing phases of the project, particularly the preliminary and detailed design phases.   

What are the benefits of the ECI model and why should NZ consider adopting it?

When used well, ECIs can be very effective. The design work can be consented with the teams knowing exactly what consents are required, limiting the number of variations required to the design and with the construction methodology reflected in the design from the get-go. There are fewer iterations of the design, as the construction team can work with the design team to create a design that’s feasible and buildable. The design can also be tailored to reflect the constructor’s available plant in order to reduce plant costs. 

It’s a whole-of-life model, with a target cost set at the start and an open-book approach that allows stakeholders to be involved in all parts of the project. It gives full transparency of fees and costs for the clients and allows the delivery team to provide the client with early warnings, which means they have a much earlier understanding of variations. This also encourages delivery and project management best practice. The ECI model is also a good model for a pain-gain approach, offering a monetary incentive for all parties to do well. It’s a more open and collaborative delivery model.  

However, the ECI model won’t work for everything. It has to be used in the right circumstance. It’s not the best solution for all projects but it is ideal for medium/large, complex, challenging projects but only in a balance with the existing alliance model. Also, as with all projects, you still need the right people involved who will live, breathe and embody the right behaviours to provide the right outcomes.  

What challenges are there to implementing the ECI model?

It’s still very new to New Zealand. Most ECIs that have been trialled in New Zealand haven’t been applied in the same way as they have been overseas, making them less successful.  

One of the biggest challenges arising from the initial applications, from my understanding, is the lack of innovation and value engineering savings delivered to the client by the ECI team. In my experience this can be overcome by the appropriate application of incentives that reward the efforts of the private sector but also deliver tangible benefits and savings to the client. 

When applied properly, through appropriate incentives, the model works well. Although it’s a risky time to be trying new things, we should be challenging ourselves a bit more as an industry, bringing in models from other countries to keep up with the overseas industry.  

The ECI model hasn’t been widely adopted in New Zealand, and perhaps we’re all a bit hesitant to change in this COVID-19 world but it is another option, another tool in the tool box. It can save the client a significant amount of time and money when used effectively. However, one thing to remember is that the ECI model requires an open mind by all parties involved – the end goal might be predetermined, but the path to getting there should be developed along the way.  

If you are interested in talking more about the ECI model with Chris, you’re welcome to get in touch by emailing him cperks@tonkintaylor.co.nz or call him directly on +64 9 355 6011