De-risking ground conditions as part of Early Contractor Involvement (ECI)

De-risking ground conditions as part of Early Contractor Involvement (ECI)

In March 2022 the Australian Government published Government Procurement: A sovereign security imperativeit was the House of Representatives Standing Committee on Infrastructure, Transport and Cities and looked in part at Early market engagementanother phrase for Early Contractor Involvement (ECI).

It explained that: Early engagement with contractors can assist with better design and procurement models,driving a more efficient and cost-effective process. Regardless of the method selected,sufficient upfront planning and preparatory work will assist with improving relationships between proponent and contractor, balance risk allocation, manage and appropriately price risk.

I am often confronted with marine infrastructure projects going out to tender where the geotechnical information is deemed by tenderers to be incomplete, insufficient or otherwise lacking in specific detail of the likely ground conditions. At such a late stage in the tendering process it is usually impossible to do any form of additional site investigation. Tenderers are then stuck with preparing a firm cost estimate based on poor or insufficent data.

If a Client is looking to de-risk the ground conditions of a project (they always should!) I often ask myself why do they carry out the site investigation as a separate exercise with no input whatsoever from the tenderers?

Surely, it is best practice to approach the likely tenderers, perhaps best as part of an ECI exercise to get them to advise on, oversee & witness the site investigation campaign. Early on in my career this was the case as if tenderers felt the site information was poor they would collectively fund further site investigation and jointly share the costs of such a campaign between them.

The key question to ask all potential tenderers directly is - what amount and locations of geophysical and geotechnical data they would like to see in order that the Client can move towards possibly buying off the likely claims for differing ground conditions?

It is clearly accepted that a Client does not have an unlimited budget for site investigation but if the market is telling you that your proposed site investigation is substandard/lacking and you need more 'targetted' site information it would be a foolish Client who ignores it and does not take on such recommendations. In any adjudication or arbitration of the dispute the decision is likely to fall in favour of the Contractor who had no choice but to rely on the information provided.

If you get the tenderers, as part of an ECI process, to 'buy-in' to the type and amount of site investigation required surely the site data and differing soils condition will be seen in a far more balanced view given the Contractor has made its own assessment of the site investigation.

So the Contractor as an 'experienced contractor' is satisfied with the amount and quality of the site information as it has had an active role in compiling it and therefore has made a proper assessment of the risk of differing site conditions between site investigation locations. This will effectively raise the bar to any possible claim in the future as it is now case law that the inference of likely conditions between site investigation locations is firmly part of the Contractor's risk allocation. If the Contractor does have concerns as to the variability of conditions between locations then a Geotechnical Baseline Report could be the answer to set boundaries as to just what conditions the Contract Price has been based on.

I have previously discussed the use of Geotechnical Baseline Reports (GBR) see here & here. There is a forthcoming CIRIA guidance C807 which is due for publication in early 2023 which it is hoped will promote the use of GBR's more generally within the marine infrastructure industry. I would still however, rather see tenderers fully involved in the selection of the amount and quality of site investigation than the Client doing insufficient site investigation and then setting up a GBR. Such a GBR is likely to be too conservative and could potentially drive up the final Contract Price. Far better to spend some more money on better site investigation and have the Contractor involved in the process from the start.

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David Kinlan