Early contractor involvement: a review of pre-construction service agreements

Abstract

Early contractor involvement involves engaging contractors to work with the client’s design team during the pre-construction stage before agreeing on a construction stage contract. Despite the growing use of two-stage contracting, there is a lack of research into the forms of pre-construction service agreements and their effectiveness. This study aims to evaluate the optimal contract ingredients for a pre-construction stage agreement that can be used with a range of standard-form construction contracts based on industry preferences. Four agreements are critically evaluated: those of the Joint Contracts Tribunal and NEC3 and two bespoke agreements. Key ingredients were found to include scope of services, time obligations, design obligations, key personnel, price formation, confidentiality of material and communication and co-operation. Industry preferences were obtained through semi-structured interviews with 21 construction participants across New Zealand.

Repertory Grid Methodology to Research Tacit Knowledge in Construction

“…Early Contractor Involvement (ECI) which is an increasingly popular approach aims to benefit the design process from the expertise and knowledge of contractors in terms of buildability, construction methods, materials, local practice and cost [20]. However, it has been shown to be problematic as often contractors commit staff time to contribute to the ECI workshops but end up not securing the contract [21]. Thus: "…the uncertainty of the contractors in being selected to the implementation phase their engagement in the early stage was not as beneficial as it could have been.…”

Subcontractor Engagement in the Two-Stage Early Contractor Involvement Paradigm for Commercial Construction

“…It also means the contractor can review the quality of drawings before agreeing to the lump-sum construction contract. Indeed, the pre-construction services agreement (PCSA) authored by Finnie et al [14] stipulates that the main contractor cannot claim contract variations during construction after agreeing with the construction contract. This acknowledges that the contractor likely has considerably more time to analyze the drawings through 2S-ECI than the mere weeks when bidding through traditional tender.…”

“…Early contractor involvement (ECI) across project planning and design phases can reduce conflicts and improve cost and time certainty [15], significantly reducing the number of requests for information (RFIs) and subsequent contract instructions [16], and improve team integration [17]. Usually, the same contractor is awarded the construction contract, utilizing the more extensive early planning for a better-executed project [14]. Two-stage early contractor involvement (2S-ECI) refers to the combined pre-construction and constructionstage contracts as a procurement pathway, and the inter-disciplinary nature of the project leadership team aligns with alliance-oriented contractual arrangements [18] with integrated relationships [19] as a foundation, but 2S-ECI commonly features a traditional lump-sum construction contract, rather than more complicated gain share/pain share pricing [11].…”

“…Common stakeholders involved in 2S-ECI include clients, consultants, and contractors [22]. However, 'subcontractors' also play a vital role in the success of this procurement strategy [14]. Subcontractors establish the supply chain from one sub-supply chain or the whole supply chain, depending on the services provided.…”

“…Interestingly, the literature on subcontractor involvement through 2S-ECI is limited with no research conducted globally [31] and within the NZ context [14]. Nevertheless, almost 80% of most work done on CCPs is by subcontractors [32].…”