Early Contractor Involvement (ECI) provides an efficient means to design and plan infrastructure projects in a cost-effective, more efficient operation. Providing for Early Contractor Involvement within a contract helps to create a relationship in which all participants in a project can think together to find the best solutions – making use of and respecting each other’s expertise.
Early Contractor Involvement will also create a team, which emphasises shared responsibilities amongst its members. It thereby increases transparency and reduces risks. In this way, all stakeholders, clients, consultants and contractors can avoid an adversarial relationship, improve solution-oriented thinking and limit the reasons for disputes.
Unlike maintenance dredging projects, which occur on a regular basis and are relatively routine, large capital infrastructure projects are unique and require an extraordinary amount of time for planning, significant financial investments and human resources. As a first step, clients and consultants are asked to make design decisions. This often occurs with insufficient information and expertise regarding available technologies, equipment and potential innovative solutions. This is not particularly cost-effective.
Traditional procurement methods for these large capital infrastructure projects are inefficient because:
- they bring contractors into the process after many key decisions have already been made;
- they are based on the lowest price rather than the most optimal or ‘best value’ solution.
In the traditional system, project designers, who have limited knowledge about how to scope and cost, are consulted first. Then contractors, who are the experts, are called in. This forces contractors to be reactive instead of proactive. The clients and consultants tell the contractors what they want, not considering what is possible with the newest technologies. They then take the lowest price and negotiate it downwards.
In the long run, this increases prices and decreases performance. It discourages innovative approaches to sometimes very challenging circumstances.
Early Contractor Involvement advantages
Dredging experts should be engaged from the beginning. This offers many advantages to the client as well as to the dredging contractor. The implementation of Early Contractor Involvement can:
- improve profitability by reducing operating costs and ensuring more efficient delivery;
- make sure that the budget is spent on the construction works and not on distracting legal complications such as disclaimers of liability;
- create the possibility for forecasting project results with more certainty;
- prepare all parties to understand the risks and shared responsibilities;
- implement Best Value Procurement to achieve long-term, high quality results.
Early Contractor Involvement is predicated on the premise that all parties are accountable, to jointly solve problems, to address unknowns in difficult environments, to resolve or avoid conflicts more effectively and to deliver a project that satisfies all stakeholders.
Best Value Procurement
Early Contractor Involvement can be instrumental in achieving “Best Value Procurement” (BVP). In traditional procurement, price is frequently the determining factor. Best Value Procurement allows a client to select the contractor whose proposal offers not simply the lowest bid, but the greatest economic value.
A Best Value Procurement proposal supports performance outcomes, realised by using the most efficient and effective methods and equipment.
To make this kind of proposal and make reasonable decisions about a project requires information which can often only be supplied by the dredging contractors. They are the ones who are involved in the operational work.
Rather than considering price alone, if the client brings the contractor in from the beginning, the contractor’s expertise becomes more quickly evident in the design and building of the project. In this way, Best Value Procurement factors such as quality, options and incentives, ongoing maintenance and/or a longer project lifespan can be better evaluated.
Early Contractor Involvement is thus an integral part of Best Value Procurement.
Selecting a contractor
A contractor should be selected based on a cost/benefit analysis. In this way a contract can be awarded based on whether higher prices are justified because of a cost/knowledge ratio. The client may pay more but get more expertise.
The choice is thus made not solely on the lowest bid that is technically feasible. The contract is based on the most value to achieve the best results.
For recurring maintenance dredging and smaller projects this may be less urgent. But when constructing a mega-project costing millions and meant to last for decades, the contractor’s state-of-the-art knowledge can make all the difference.
Legal limitations and responsibilities
Early Contractor Involvement should not and will not violate legal requirements for competition, be they national or supranational. Competition in the European Union, the United States and other countries may not be precluded in any form. That said, regulations allow for a client to seek professional advice at an early stage of a project’s development as long as transparency and equal treatment are respected.
Government agencies recognise that finding technical solutions and/or financial/ legal solutions when planning enormous infrastructure projects require sufficient expert information and knowledge – which they may not have within their agencies.
To maintain competition between all potential economic participants, all aspects of a contract must be discussed with each contractor. This ensures a transparent procurement method in which tenders remain competitive and favouritism is avoided.
Yet it also guarantees that the client or owner of a project can benefit from the early input of the dredging contractors in a fair and competitive environment.