Which one is best for your project?

There are many different methods of procuring and engaging with a builder or head contractor for a project, but let’s look at two ends of the scale –

There are key risk issues with each that dictate which method is the best for your project -

ECI

Firstly ECI is NOT a Design and Construct contract, there is a big difference
Reputation and relationship is critical. The builder will become part of your design team and needs to bring solutions, not problems, to the table
Experience of the builder is a key factor. The main reason for an ECI Tender is to access the knowledge of the builder in terms of constructability that can be incorporated within your designs
ECI should be based on an open book basis meaning the builder works with the client on the subcontractor scopes and is able to view all competitive subcontract trade quotes.
If you as the client are not experienced in construction, or you don’t have a trusted Project Manager representing you, or your relationship with the contractor is not resolute, then ECI is likely not the right approach for you.

Open Tender

Theoretically will achieve the best price in the market-place
Is less reliant on relationship to achieve the best price
Your consultants must be of the highest calibre to ensure your documentation is of highest standard to minimise variations
Risk must be reduced through a Guaranteed Maximum Price contract arrangement

Neither option is right or wrong but depends on your knowledge of the process and your relationships, but a couple of quick reminders –

No matter how good your relationship, always have strong contractual documentation…mates’ rates is NOT a form of contract!
ECI works when there is strong trust in the contractor/client relationship, and the client is confident on their knowledge of the process
Open Tender works best to get the lowest price ONLY IF you have strong consultant design documentation

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