Early Contractor Involvement (ECI) & Early Contracting Mechanisms
- Ari Zingillioglu
- Nov 7, 2025
- 5 min read
Updated: Dec 8, 2025
Early Contractor Involvement: A Strategic Approach to Construction Management
The ECI model was coined in 1976, and research throughout the 1990s indicated that its use could reduce project durations by around 10% and lower costs by approximately 7%. The 1994 Latham Report, which examined structural issues within the UK construction industry, recommended broader adoption of ECI, and its use grew steadily in the early 2000s.
In its early years, ECI services were typically provided without payment, but this approach was unsatisfactory for contractors, who felt it undervalued their expertise. By 2005, most ECI arrangements had shifted to a paid basis. This change also reduced disputes, as contractors had previously sought compensation when unpaid ECI projects failed to advance to the construction phase.
An ECI option was incorporated into the widely used NEC Engineering and Construction Contract suite in December 2015. The model has also been adopted in New Zealand since the early 2000s and is in active use in Australia.
1. Introduction – Starting Work Before a Full Contract
In the construction industry, the need to commence work before finalizing a full contract is often driven by commercial pressures and tight schedules. While it is ideal to wait for all terms to be settled and a comprehensive contract executed, early commencement can provide significant advantages. However, it also introduces risks that must be managed effectively.
To mitigate these risks, various preliminary arrangements can be adopted. These include Conditions Precedent or Subsequent, Notices to Proceed, and Early Works Agreements. Understanding these mechanisms is crucial for successful project execution.
2. Contractual Mechanisms for Early Commencement
2.1 Conditions Precedent / Subsequent
Conditions Precedent are terms agreed upon but not yet effective. They must be met before obligations become binding. If these conditions are unmet, the contract does not take effect. Conversely, Conditions Subsequent apply to contracts that become binding upon execution. If specified conditions are not fulfilled later, the contract is terminated.
A common Condition Precedent in an Engineering, Procurement, and Construction (EPC) contract is financial close. Contractors typically prefer not to be bound to major obligations until project financing is secured. To address this, contracts may be structured so that only limited obligations take effect immediately, while full operation depends on satisfying the Conditions Precedent.
Clauses that take effect immediately upon execution are known as 'Day One Clauses.' These typically include terms related to insurance, compliance with laws, termination, and security. For effectiveness, these conditions must be clearly defined, specifying responsibilities, time limits, notification procedures, waiver options, and consequences of non-satisfaction.
2.2 Notices to Proceed
A Notice to Proceed (NTP) is a formal communication from the principal that authorizes the contractor to begin some or all works under the contract. In multi-stage contracts like EPCs, an NTP may be required before each stage begins. The issuance of an NTP is usually at the principal’s discretion.
An NTP typically specifies:
Work packages to be performed,
The time allowed for their completion, and
The associated payment value.
A limited NTP activates part of the work, while a final NTP authorizes full scope commencement—often conditional on specific requirements, such as delivering an advance payment guarantee. Parties should consider the implications of delayed or non-issued NTPs, as timing can directly affect the contract sum, schedule, and key milestone dates.
2.3 Early Works Agreements
An Early Works Agreement (EWA) is utilized when full contract terms are still under negotiation. It serves as an interim arrangement—often a letter of authorization—allowing early commencement of preliminary works such as demolition, site preparation, or design.
The EWA should define the terms governing the early works, covering payment, insurance, security, quality, safety, and timing. It may include an expiry date to prompt finalization of the full contract. Typically, it provides that early works will be incorporated into the main contract once executed and outlines both parties’ responsibilities if the full contract is never finalized (e.g., return of shared project data).
3. Delivery Models and Procurement Context
Once sufficient project data is collected, the project profile can be compared against available procurement options to determine the best fit. According to the Building and Construction Procurement Guide – Principles and Options (Austroads & APCC, 2014), a preliminary screening should first identify financing needs and shortlist suitable delivery models.
Common delivery models include:
Construct Only
Design & Construct (D&C)
Design, Construct & Maintain (DCM)
Alliance
Public–Private Partnership (PPP)
Early Contractor Involvement (ECI)
Each model offers varying levels of integration, collaboration, and risk allocation between client and contractor.
4. Definition and Process of Early Contractor Involvement (ECI)
Early Contractor Involvement (ECI) is a two-stage procurement model designed for large or complex projects where the design is not yet finalized. It enables clients to access the specialized expertise of contractors early in the project to improve cost, schedule, and buildability outcomes.
The process begins with an Expression of Interest (EOI) stage, where contractors are evaluated based on capability, experience, financial capacity, and proposed team—not price. Shortlisted bidders then progress to the Request for Proposal (RFP) phase, submitting detailed proposals, programs, and rates.
The selected contractor is engaged for a fee to collaborate with the client and design team. Together, they refine the project’s scope, design, methods, and cost estimates. This model allows design and documentation to overlap with early works, saving time and enabling the contractor’s expertise to influence constructability and value engineering.
5. Advantages, Suitability, and Applications of ECI
ECI is particularly suited to projects requiring fast-tracking or early mobilization. It is also beneficial for projects with complex technical or site conditions, situations demanding specialist contractor input, and cases where budget control and value management are critical. The model fosters collaboration, transparency, and innovation while improving safety and efficiency through informed design and early risk identification.
By integrating contractor insights early in the process, ECI enhances project outcomes. This collaborative approach allows for better risk management and design integration, ultimately leading to successful project delivery.
6. Case Study – Allianz Stadium, Sydney
In October 2018, Infrastructure NSW launched plans for a new stadium to replace the original Sydney Football Stadium, delivered in two phases: Stage One – Demolition and Stage Two – Construction. Lendlease was initially appointed under an ECI arrangement to deliver the 42,500-seat stadium. Construction was expected to start in 2019, targeting early 2022 completion.
However, the government terminated Lendlease’s construction contract in July 2019, retendered the project, and awarded John Holland the $735 million contract in December 2019. The stadium opened on 28 August 2022, with a final cost of A$828 million.
The ECI process enabled innovative modular techniques, minimizing material waste and reducing steel usage by 40% compared to traditional methods. The stadium achieved LEED Gold certification and featured a technically advanced, lightweight roof of 5,000 uniquely shaped steel elements.
To ensure design integrity, the project began with a well-defined design framework and early appointment of a qualified contractor chosen for cultural fit and technical capability. Cost management was secured through a Guaranteed Maximum Price (GMP) arrangement, complemented by incentive structures that aligned managerial goals. Oversight from the NSW Government Architect and a commitment to transparent, public-focused governance strengthened accountability. Shared risk distribution encouraged collaboration, while consistent involvement of design managers safeguarded project knowledge from start to finish.
7. Recommended Further Reading
PIANC Working Group 194 – Framework for Early Contractor Involvement in Infrastructure Projects
Victorian Government Architect (OVGA) – Procurement of Buildings and Infrastructure – ECI Section
Austroads (2014) – Guide to Project Delivery, Part 2: Planning and Control
8. Conclusion
In conclusion, Early Contractor Involvement (ECI) presents a strategic approach to managing construction projects. By leveraging contractor expertise early in the project lifecycle, stakeholders can enhance project outcomes, mitigate risks, and ensure efficient delivery. This method not only fosters collaboration but also integrates valuable insights that can lead to innovative solutions and successful project execution.
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