In order for this study to be carried out a literature reappraisal was developed to understand the construct of the subject Early Contractor Involvement ( ECI ) and besides to utilize the information to explicate how it relates to the writer ‘s study. This was done through seeking libraries, databases, newspaper articles, diaries and the usage of the cyberspace. Further to this reappraisal a peculiar instance survey was carried out on a undertaking which is utilizing the peculiar method discussed in the study. Through this instance analyze a structured interview was carried out with an organizational organic structure, who were involved with the undertaking, to recover farther in-depth information. The cardinal findings are expressed throughout each of the different subdivisions of the study and chiefly discourse the procedure of the subject itself, its advantages, disadvantages and how the procedure has provided a agency of ‘fitness for intent ‘ .
Introduction
As the building industry develops throughout the old ages, many different procurance paths have developed to successfully complete undertakings. Although non one of these has been clearly used for every undertaking carried out. The ground for this is that different procurance paths have different features which are suited for undertakings. One of the well known paths is the traditional “ Design, Bid, Build ” .
Through the yesteryear this path has successfully completed undertakings, nevertheless it has shown that the design phase and the build phase are split apart. Song et Al ( 2009 ) explains that the chief disadvantage of this consequence is that contractors have no input into the design phase. The procedure itself usually starts with a interior decorator interceding with a client in order to ease their demands in relation to the building of a installation. A command procedure so occurs where the procedure of riddance selects a contractor to transport out the physique phase. Further to this, Song et Al ( 2009 ) cited Arditi et Al ( 2002 ) in foregrounding the fact that the impact on design is limited as the interior decorator will hold a deficiency of cognition and apprehension of the existent building of the installation in comparing to the contractor.
The consequences of this have an consequence on the undertaking ‘s cost, quality and clip. For illustration, the agenda of the undertaking can be badly affected by the interior decorator thinking the length of clip it takes to finish a undertaking alternatively of inquiring the contractor, who will be transporting out the work, how long it will take them to make it. Quality can besides be affected likewise as the interior decorator may non cognize the best merchandises to utilize, or for the contractor to utilize, in order to finish the undertaking harmonizing to agenda. If one of these factors is affected so is the other.
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( hypertext transfer protocol: //www.the-self-build-guide.co.uk/images/Time-Cost-Quality-Triangle.jpg )
This kind of building cognition and understanding held by contractors, with respects to be, quality and clip, has been analysed by many research workers and administrations. One such administration is the Construction Industry Institute whereby they have categorised techniques of contractors and called them “ 14 best patterns ” and “ 44 value direction patterns ” The patterns can be found on the CII ‘s web site and the “ 14 best patterns ” can be seen in appendix A.
This construct of cognition and apprehension of contractors has been implemented into a new procurance path to seek to better past procurance paths. This has been called the Early Contractor Involvement ( ECI ) procurance path. The aim of this study is to explicate this new type of procurement path and how it provides betterments in ‘fitness for intent ‘ through its procedure. As this procedure is so alone and merely constructing its foundations in the building industry there is one undertaking which will be the first to utilize this method of procurance in Northern Ireland. The writer will utilize this undertaking as a instance survey to seek and accomplish the aims of this study. The information on this instance survey can be seen subsequently on in the study.
Early Contractor Involvement ( ECI )
As mentioned above different procurance paths suit different undertakings and besides client ‘s demands. One chief factor to see by the client when finding their critical demands is the clip spent in the design phase of a undertaking. This new procurance path uses the construct of implementing the contractor into the design phase to non merely rush up the procedure but besides to add a higher quality. Through this procedure the design squad and contractor must intercede with each other in order to guarantee the undertaking will be ‘fit for the intent ‘ whilst ‘best value for money ‘ is besides obtained.
Song et Al ( 2009 ) defines Early Contractor Involvement as:
“ A relationship between a contractor and an proprietor or a interior decorator that engages the contractor from the early design phase and allows the contractor to lend its building cognition and experience to plan ” .
As the path itself chiefly focuses on the design phases of the procedure it is besides similar to the Design and Build path, nevertheless the chief difference, is that the contractor is involved far earlier in the ECI path. Bishop ( 2007 ) explains the procedure of this ECI path, in that the contractors are selected by the appraisal of the company ‘s path record and from their ability to finish building undertakings. He besides states that the chief job with Design and Build path is that by the clip the contractor gets involved there is no room for input, from the contractor, into the design as it is already 80 % fixed, whereas with the ECI route the contractor joins the design squad right at the start of the design phase.
The contractor who is involved with this design phase is usually selected on a two-stage tendering procedure. However the contractor must first go through the pre-qualification phase. This is where the contractor is assessed on past contracts completed by the contractor.
“ ECI selects contractors non by lowest monetary value command, since there is non yet a design to offer for, but by an appraisal of the company ‘s path record via its Capability Assessment Toolkit. ” Bishop ( 2007 )
Once the contractor has passed this phase they are so given an invitation to tender through the two-stage tendering procedure. This is a quality ; cost based stamp procedure on a basic design which is made from information available at this clip. Harmonizing to Mosey ( 2009, p.72 ) the first phase establishes the undermentioned standard of the contractor:
“ Main Contractor ‘s Net income
Operating expenses
Preconstruction Phase Costss
Approach to Risk Pricing
Other Cost Components ( that can be accurately priced on the information available at that clip ) . ”
He besides states choice in this phase should besides be based on quality elements, such as those outlined in the CIRIA ( 1998 ) study “ Choosing Contractors by Value ” :
“ Technical cognition and accomplishments – experience in technology specializer elements ; appropriate design capacity.
A figure of direction accomplishments – managing clip, cost, value, quality, hazard, wellness & A ; safety, etc.
Effective internal administration – clear communications ; sound disposal and sceptered staff ;
Collaborative civilization – record of ‘partnering ‘ ; positive lead from the top ; client focal point ;
Appropriate human resources – qualified and enthusiastic forces available to make the occupation ;
Supply concatenation direction – sound covering with subcontractors/suppliers ; established relationships ;
Fiscal resources – sound balances and hard currency flow ; dependable mention ;
By and large – a sound, relevant and incontrovertible path record. ”
This will hold a major affect on whether or non the contractor will be ‘fit for the intent ‘ if selected for the contract. The 2nd phase of the tendering procedure involves the chief contractor interacting with the client ‘s advisers to competitively assess subcontractors and providers for choice. This phase takes advantage of the pricing of the contract to a more accurate figure due to more information from the input of the contractor. If this figure is so satisfactory this becomes the formal contract amount. The chief factors which will act upon this figure are the “ contractors input to plan, hazard direction and scheduling. ” ( Mosey, 2009, p.73 )
Once the client is satisfied with the choice of the chief contractor from the quality and fiscal appraisals the contractor so works with the client ‘s advisers to develop a mark monetary value. This is done on a pain/gain portion formula provinces Bishop ( 2007 ) :
“ The two sides so work together on an open-book footing to develop a mark monetary value. The contractor is incentivised to plan and build the strategy within this mark monetary value, based on a pain/gain portion expression. ”
A major result of the usage of this type of procurement path is the creative activity of long-run relationships between client and contractor. This is achieved through squad co-operation on all sides involved with a undertaking. Egan ( 1998 ) explains in his study, Rethinking Construction, how the building industry needs to better the public presentation of bringing for undertakings, as it has been seen in other industries that the creative activity of long term relationships has achieved this betterment.
“ An indispensable ingredient in the bringing of extremist public presentation betterments in other industries has been the creative activity of long term relationships or confederations throughout the supply concatenation on the footing of common involvement. Alliances offer the co-operation and continuity needed to enable the squad to larn and take a interest in bettering the merchandise. A squad that does non remain together has no acquisition capableness and no opportunity of doing the incremental betterments that improve efficiency over the long term. ”
Egan besides stated on legion occasions throughout his study that there is a demand for partnering and incorporate squad co-operation. This is the cardinal component of this new procurance path.
“ The challenge for the building industry is to develop their ain integrated squads to present the same benefits to occasional and inexperient clients. ” Egan ( 1998 )
Technically ECI derived from Egan ‘s study as it is a signifier of partnering, something that Egan has long pushed for to be implemented into the building industry.
Advantages of ECI
The two chief benefits of the ECI procurance path is the decrease of clip and the addition in quality. These apply to the overall undertaking ‘s public presentation. Bishop ( 2007 ) relates to the decrease in clip by mentioning Nichols ( 2006 ) in saying that the cardinal benefit of this freshly developed path is that it “ potentially reduces readying clip for undertakings by 30 % to 40 % , by transporting out some parts of the development procedure at the same time instead than consecutively. ”
Other benefits besides apply, such as the decrease of hazards. For illustration when the contractor is taken on board during the design phases of the contract, due to the building cognition and understanding held by the contractors, they will detect any certain hazards which will originate or be embedded with respects to the build-ability of the design. This is a major advantage as it will do the building phase non merely easier to transport out but besides safer.
A decrease in cost is besides another advantage due to the ‘Target Costing ‘ facet which is by and large associated with ECI as a procurement path. It is usually stated during dialogues whether or non it applies to the contract. In most instances of ECI it will use. It means if any money is saved due to ‘Value Engineering ‘ ( which is explained subsequently on in this study ) from the contractors input the salvaging made on the formal contract amount is normally split between the chief contractor, client and advisers to an agreed ratio. This encourages the contractor to bring forth better quality work moralss in order to accomplish this economy of cost, therefore ensuing in better ‘value for money ‘ and in some instances bettering the undertakings ‘fitness for intent ‘ depending on the impact of the alteration.
Disadvantages of ECI
Through research, one of the chief disadvantages with the usage of ECI is the clip taken up of higher direction employees by the audience of the chief contractor. However this should alter throughout the hereafter if preparation programmes are implemented so that sub-ordinates can replace this function.
Another disadvantage is that that contract advisers need to set to the new procurance method. The writer has noticed through old undertakings that outgo has over-run budget and in most instances even before the building stage has begun. Bishop ( 2007 ) relates to this in saying that “ Mike Nichols, president and main executive of the Nichols Group, was commissioned by the secretary of province for conveyance in July 2006 to reexamine the HA ‘s Major Roads Programme following additions of up to 300 % in the estimated cost for single route strategies. ”
An even bigger subject which can be seen as a disadvantage or an obstruction is that this new procurement path must be put together with a signifier of contract for legality footings. Stowe ( 2005 ) believes that this can be achieved by amending a standard signifier of contract such as the NEC signifier to integrate ECI constructs like mark costing. “ The terminal consequence would be a more robust papers whose commissariats would be more familiar to contractors in this market ” .
Measuring ‘Fit for the intent ‘ of ECI
The HM Government stresses for the demand to hold good procurance pattern. They explain how achieving ‘fitness for intent ‘ is strongly linked to procuring whole life value of a undertaking.
“ Good procurance pattern is crucially of import to cut down the overall cost of undertakings, to better the economic efficiency of the building industry and to guarantee that undertakings, when complete, are fit for intent, thereby procuring whole life value ”
HM Government ( 2008 )
Further to this the HM Government found, through a NAO ( National Audit Office ) study in 2005 “ Improving populace services through better building ” , that through the usage of good procurance pattern benefits of 2.6 billion lbs were saved of the populace ‘s pocket. They further province that “ this represents a powerful concern instance to establish procurance on whole life costs ( instead than cheapest option ) and to prosecute at an early phase with the supply concatenation ” .
One construct which is normally applied with ECI, to accomplish fittingness for intent, is value technology. Song et Al ( 2009 ) , explains how value technology is used in the design phase of the procurance path and is used as an audit process:
“ Value technology identifies indispensable maps and develops methods to accomplish these maps with last life rhythm cost. To accomplish this end, cognition from a multidisciplinary squad, including building expertness, is required to execute the map analysis, identify high costs countries, and formulate options. ”
Stowe ( 2005 ) concurs with this statement by saying that the thought of ECI is “ that the contractor will convey to bear its expertness in value technology from a really early point in the strategies development stage. ”
Another method which ECI will hold integrated in its procedure in order to accomplish ‘fitness for intent ‘ on a undertaking is the usage of Constructing Excellence ‘s Key Performance Indicators ( KPI ) information. The HM Government hope that this information will be used for undertakings like those procured by ECI by 2012. The Government province in the study ‘Strategy For Sustainable Construction ‘ ( 2008, p.10 & A ; 11 ) that the usage of incorporate squads within the building industry should present a more sustainable finished merchandise and that this will be reviewed through the usage of the Construction Excellence ‘s KPI informations yearly.
Case Study: A5 ( Aughnacloy – Derry ) Western Transport Corridor
This undertaking is the first undertaking in Northern Ireland to utilize this new procurement path of ECI. In researching this undertaking through the cyberspace, contacts of administrations were found that are involved with the A5 strategy. This besides led into an probe of the A8 strategy. The client, who was Roads Service on both strategies, was one of the chief organic structures involved, so they were interviewed in order to recover more information. The interviewee from Roads Service, was more than obliged to assist obtain information.
The A5 strategy itself is called split up into three different subdivisions:
Section 1: New Buildings to Sion Mills ( 23Km )
Section 2: Zion Mills to South of Omagh ( 31Km )
Section 3: South of Omagh to Aughnacloy ( 32Km )
Each of these subdivisions amounts up to 86km in entire. The chief aim of this strategy is to better connexions between Dublin and the North West. This includes sub-objectives:
“ To better route safety
To better the route web in the West of the Province and North/South links
To cut down journey travel times along the A5 Western Transport Corridor
To supply increased passing chances for automobilists along the A5.
To develop the concluding proposals in visible radiation of safety, economic sciences, environment, integrating and handiness considerations ”
Under Roads Service guidelines when suggesting any main road undertaking a three phase assessment procedure must be carried out in order to reexamine options available, place range and effects of the undertaking.
Phase 1 – consists of the choice of preferable corridor. This is completed by analyzing four chief facets of Environment, Engineering, Economics and Traffic. By analyzing these facets major factors are identified which influence the path choice. These major factors include:
Existing geographics across the survey country,
The presence of planning policy countries,
Areas of particular ecological or historical significance
Phase 2 – consists of a elaborate analyses of the lands incorporated with the preferable corridor selected. This analysis is based on cardinal standards used to make designs for the development of the path ; such designs would include for illustration technology design of earthworks involved. The cardinal standard chiefly revolves around five chief facets:
Safety
Economicss
Environment
Integration
Handiness
Phase 3 – consists of a more elaborate development of the ‘Preferred Route ‘ as to transport out a elaborate appraisal of the path and its effects on the environment. The elaborate appraisal will set up extenuation plants required to cut down these effects if necessary and besides find the sum of land required for the undertaking.
These phases can be seen in Roads Service ‘s Programme Flowchart in appendices B where the timeline in relation to the A5 undertaking can be seen against these phases. It besides shows where precisely they are at this present clip.
Roads Service ‘s representative explains that one of the chief grounds for the ‘go in front ‘ for this undertaking was the input of finance from the Irish Government. Approximately ?400 million was the input from the Government he farther explains and stated that without this it might hold been a PPP undertaking but said that this would be improbable to go on.
The interviewee explained that the three major factors which revolve around the new ECI procurance method, these consist of:
Timing
Supply Chain
Input signal to Plan
The timing facet was critical in this undertaking as he described that the Irish Government wanted any undertaking which they are funding to get down before 2013 to bind into their national development program. He elaborates on this by replying inquiry 3 during the interview and provinces that any other procurance method would non hold been effectual run intoing the clip programme due to procurement get downing after public questions.
Steve Rowsell, who introduced ECI into the HA and is procurement manager of the HA, relates to this in Bishop ‘s ( 2007 ) study. He states that timing is one if the cardinal benefits of ECI: “ The biggest salvaging comes from holding the contractor ready to get down without holding to travel through the procurance procedure after public enquiry. That saves about two old ages. ”
With respects to the supply concatenation, the interviewee coincides with many of the above statements made earlier in this study, sing the contractor ‘s input and stated that “ It is better to hold the contractor in earlier as they can act upon the design of the route and besides fencing before verification. ” What he intend by this is that contractors would cognize how much infinite they will necessitate to work with so so the interior decorators will cognize how much land they will necessitate to obtain.
Contractors input to plan is besides major factor, as the interviewee describes by replying inquiry 2 it ‘s in the involvement of the contractors to increase quality to accomplish mark bing. This construct is negotiated on rates which were submitted in the pre-qualification phase. So there is a sharing of the fillips if bringing is under mark to an equal split of 25 % to each party involved.
While replying this inquiry he besides explained some of the procedure of the ECI path. He stated that 8 stamps started out in the pre-qualification phase nevertheless merely 6 passed the pre-qualification. He besides stated that this phase is chiefly based on old undertakings completed by the contractors, i.e. path record. The contractor is so selected based on quality – 80 % , monetary value – 20 % entry.
With this peculiar undertaking the client asked the industry what would be the best solution to finish this undertaking. The reply they received was chiefly to divide the undertaking up into 3 different subdivisions as it was such a long route. The client took this on solution on board made basic designs split up into 3 different subdivisions, nevertheless when it came to tender for the undertakings some contractors said they could make the whole batch for ?600 million and some said they could make it for ?100 -200 million. The client assessed this and thought it best to give some contractors the pick to tender for 2 subdivisions if they wanted to. Therefore there would be a lower limit of 2 contractors on board.
Due to the present phase of this undertaking, the writer found it difficult to mensurate whether or non the usage of ECI is good to accomplish ‘fitness for intent ‘ as a procurance procedure. However Roads Service ‘s representative did edify us on how they will guarantee this on this undertaking. The interviewee describes that there is a demand for consistence of design. What is meant by this is that integrating is a necessity in order to look at the strategy as one strategy. This is done by incorporating certain factors such as Health & A ; Safety, Design, i.e. have one integrated Health & A ; Safety squad, and the same for a Design squad. Roads Service ‘s advisers will be in charge and they will utilize the contractor ‘s advisers to bind into the design. Further to this the interviewee provinces that this will besides be measured against 5 chief factors:
Cost
Health & A ; Safety
Sustainability
Quality
Undertaking Management ( how advisers will negociate with one another )
Once these mensurating factors are in topographic point farther KPI informations will be developed to attach to these. To assist with the development of this undertaking in such cardinal countries like mensurating such factors mentioned above Mouchel, who are the client ‘s advisers, have appointed Russell Wright as the clients advisers. Russell Wright a company who is experiences with working with ECI contracts in the U.K.
Further information on this instance survey can be seen in Appendix C and E
Decisions
From the writer ‘s research and probe of the instance survey, findings have helped him to to the full understand non merely the procedure of this new procurance method but besides the pros and cons of the construct itself. The writer believes that there is a true hereafter for this method in the building industry if the controlling of certain facets is perfected. It can clearly be seen from old undertakings which have used this method that the pros outweigh the cons and when integrating is at its best public presentation excellence will follow.
With respects to ECI as a agency for supplying ‘Fitness for intent ‘ Matt Cunningham, Head of Roads, WYG Ireland Engineering believes from his experience ‘s in working with this freshly developed procurance path that an ECI undertaking will run every bit swimmingly as any other undertaking:
“ ECI seems to promote people to raise their outlooks. It is NOT a Panacea for all jobs normally experienced on major substructure undertakings. What does go on is that by working together to seek and work out jobs as they occur and commanding outlooks, the undertaking WILL run every bit swimmingly as any other undertaking. ”
However the writer believes from his probe on the instance survey that it is excessively early to state whether the usage of ECI has provided ‘fitness for intent ‘ with this peculiar undertaking as the procurance procedure is still traveling through its phases. Lone clip will state if this major facet can been achieved.
