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Can ECI really work.

Collaboration is essentially based on integrity.
Collaboration is essentially based on integrity.

Are you really getting what you pay for when using design and construct ECI NEC4 contracts? 

Introduction: The ECI Quality Challenge

In the world of major infrastructure, the move towards Design and Construct (D&C) contracts incorporating Early Contractor Involvement (ECI) is a significant step forward. Appointing a contractor before the design is finalised allows clients to leverage the contractor's specialist expertise and supply chain knowledge, fostering innovation and de-risking the project. However, this collaborative approach presents a new challenge for the client: with the detailed design developed post-award, how do you lock in the quality that was promised during the tender stage? How do you ensure that the contractor who differentiated themselves on their robust methodology and commitment to "right first time" delivery actually follows through?

The answer lies not in heavy-handed oversight, but in a sophisticated, two-stage application of 'constraints' within the NEC4 Engineering and Construction Contract (ECC). By first constraining the contractor's design process and then leveraging the contract's power to turn the contractor's own design product into a set of self-imposed constraints, a client can create a powerful, self-enforcing quality assurance mechanism. This is all underpinned by the formidable commercial consequences of 'Disallowed Cost', ensuring that promises made are promises kept.

Stage One: Constraining the 'How' in the Client's Scope

Under an ECI procurement model, a contractor often wins the contract not on a complete design, but on the strength of their proposed methodology. They differentiate themselves by the quality of their design processes, their assurance controls, and their strategies for engaging with their supply chain to ensure a high-quality outcome. For the client, the first critical step is to capture these methodological promises and embed them as binding obligations within the initial Scope.

The 'Scope' is the single source of truth in an NEC4 contract; the contractor's primary duty is to "Provide the Works in accordance with the Scope" (Clause 20.1). Any part of the works not in accordance with the Scope is, by definition, a 'Defect' (Clause 11.2(6)). Therefore, the client's Scope must go beyond simple performance outcomes. It must state clear 'constraints' on how the contractor is to develop its design post-award.

These client-imposed constraints are not about stifling innovation. They are about formalising the very processes that the contractor promoted as their key differentiators. This could include mandating specific quality assurance procedures, requiring certain design review gateways, or stipulating the use of particular digital collaboration tools. By writing these procedural commitments into the Scope, the client ensures that a failure to follow the promised methodology is, in itself, a breach of contract. This provides the first layer of protection, ensuring the contractor adheres to the high-quality process that the client procured them to deliver.

The Pivotal Moment: Post-Award Design Acceptance

Once the contract is awarded, the contractor proceeds to develop the detailed design, guided by the client's requirements and the procedural constraints within the Scope. As required by Clause 21.2, the contractor submits the particulars of its design to the Project Manager for acceptance. This is a pivotal contractual moment.

Upon acceptance by the Project Manager, the contractor's detailed design—their drawings, material specifications, and workmanship standards—is formally incorporated into the contract. It becomes what the contract terms "the Scope provided by the Contractor for its design". It is now part of the single, binding source of truth against which the physical works will be judged.

It is absolutely critical to understand what this acceptance means. Clause 14.1 makes it explicit that the Project Manager's acceptance does not transfer or reduce the contractor's liability for its design. The contractor was appointed as the design expert and they remain wholly responsible for ensuring their design is fit for purpose and compliant with the client's overarching requirements. The Project Manager's acceptance is a procedural gateway; it confirms the design can be integrated into the contractual framework, it is not a validation of its technical correctness.

Stage Two: The Self-Imposed Constraint and the Disallowed Cost Hammer

Herein lies the genius of the NEC4 mechanism. Once the contractor's design is accepted into the Scope, all the specific details within it are transformed from proposals into binding contractual obligations. The specific grade of steel, the precise concrete mix, the mandated testing regime—these are no longer just elements of the contractor's design, they are now 'constraints' stated in the Scope. Crucially, the contractor has, through its own expert design process, imposed these constraints upon itself.

This creates the second, and more powerful, layer of quality assurance. The logical chain is now complete and unforgiving :

  1. The contractor's accepted design is part of the Scope.

  2. The specific details in that design are constraints.

  3. If the contractor deviates from its own design (e.g., by substituting a cheaper material), the resulting work is a Defect, as it is not in accordance with the Scope.

  4. This Defect was caused by the contractor "not complying with a constraint... stated in the Scope."

  5. Therefore, the entire cost of correcting that Defect is a Disallowed Cost under Clause 11.2(26).

The consequence is severe. Under target cost options (C and D), the cost of correcting a typical defect before Completion is a Defined Cost, with the financial pain shared between the client and contractor. A Disallowed Cost, however, sits entirely outside this mechanism. It is borne 100% by the contractor, providing a powerful commercial disincentive against any post-award degradation of quality to improve margins.

Conclusion: A Dual Strategy for Assured Quality

So the answer to the question "can ECI really work?" is yes, so long as the Scope is drafted correctly and the Client employs a competent Project Manager and Supervisor. For clients navigating the complexities of modern D&C procurement, the NEC4 contract offers a robust framework for locking in quality. The strategy is twofold. First, the client uses their initial Scope to impose constraints on the contractor's design process, ensuring the promised methodologies are followed. Second, the contract's own mechanics are used to transform the contractor's resulting design product into a set of self-imposed constraints, enforced by the full weight of Disallowed Cost. This intelligent, dual-constraint approach ensures that the collaborative promise of ECI does not come at the expense of quality, guaranteeing the project promised is the project delivered.


If you want to know how to write this efficiently and effectively within your Scope, or how to effectively change the behaviour of contract delivery teams to collaboratively achieve this, please contact me CLICK HERE.


Works cited

1. Structure of the NEC4 Engineering and Construction Contract - Daniel CMS, https://danielcms.co.uk/publications/news-blog/90-structure-of-the-nec4-engineering-and-construction-contract 

2. NEC4 Design & Build Contract, including initial/seperate NEC PSC contract...? : r/quantitysurveying - Reddit, https://www.reddit.com/r/quantitysurveying/comments/1htdtnt/nec4_design_build_contract_including/ 

3. NEC4 ECC High Level User Guide- CECA Bulletin 52 - GMH Planning, https://gmhplanning.co.uk/nec-downloads/nec4-ecc-high-level-user-guide-ceca-bulletin-51/ 

4. Dictionary | Resources - NEC Contracts, https://www.neccontract.com/resources/dictionary 5. How NEC4 ECC guarantees a good performance for clients | News - NEC Contracts, https://www.neccontract.com/news/how-nec4-ecc-guarantees-a-good-performance-for-clients 

6. Submission of 'deliverables' under the PSC - NEC Contracts, https://www.neccontract.com/news/submission-of-%E2%80%98deliverables%E2%80%99-under-the-psc 

7. Why and how original designers should stay involved in NEC4 ECC | News - NEC Contracts, https://www.neccontract.com/news/why-and-how-original-designers-should-stay-involved-in-nec4-ecc 

8. Importance of checking all parts of the contractor's scope for inconsistencies | News, https://www.neccontract.com/news/importance-of-checking-all-parts-of-the-contractor%E2%80%99s-scope-for-inconsistencies 

10. Role of the Project Manager - CECA Bulletin 39 - GMH Planning, https://gmhplanning.co.uk/nec-downloads/nec4-role-of-the-project-manager/ 

11. Acceptance of Contractors design by PM - General - ReachBack, https://reachback.builtintelligence.com/t/acceptance-of-contractors-design-by-pm/3141 

12. NEC 3 and Target Cost Contracts: Defined Costs, Disallowed Costs ..., https://www.fenwickelliott.com/research-insight/newsletters/insight/62 

13. The use and abuse of disallowed costs - NEC Contracts, https://www.neccontract.com/news/the-use-and-abuse-of-disallowed-costs 

14. How Can Disallowed Costs Impact Revenue? - CFBL Consulting, https://www.cfbusinesslinks.com/disallowed-costs-impact-revenue/

 
 
 

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