A recent case in the United Kingdom shows the risks of not understanding the effects of an early factory letter. In this case, Arcadis (formerly Hyder Consulting) was responsible for the design of a car park. The parties have never entered into a formal contract, although this is their original intention. Instead, the parties continued the work on the basis of correspondence. If the contractor intends to pay for work or services provided as part of the early construction letter, this should be specified. In addition, the letter should explain how the contractor`s compensation is calculated. This article refers to the mission of the prime contractor to build the construction work (and, for some contracts, to design, operate and finance the project). Depending on the terms of the contract, a contractor may assume responsibility for the preliminary work carried out as part of the preliminary work. Letters that describe themselves as “treaty-compliant” are equally problematic. If the parties intend to create directly binding obligations, even if they are limited to the early construction period, the letter should clearly reflect this. Early contractor participation (ECI) is a kind of construction contract that associates the prime contractor at an early stage of a project to make a contribution to the design phase.
It is in opposition to the design-Bid-Build model, where the contractor is only shipped at the end of the design phase. The model allows the contractor to have an entry into the design of the scheme and to propose value engineering modifications. Studies have shown that savings of about 10% on construction time and 7% on costs are achievable through the use of ICE. The ECI model has become increasingly popular in the UK since the early 2000s and is also used in Australia and New Zealand. When the parties say that they have reached an agreement, it means that one party has made an offer and the other party has accepted that offer. However, a simple agreement should not be reduced to a legally binding or enforceable agreement. The model was first studied in 1976, and studies in the 1990s showed that the introduction of such a model could result in 10% savings in project time and 7% in costs.  The broader adoption of ICE was a recommendation of the 1994 Latham Report on Systemic Deficiencies in the British Construction Industry; The practice became increasingly popular in the early 2000s.
   At first, ICE`s work tended to be unpaid, but this proved unsatisfactory for contractors who thought they were devaluing their contributions and, until 2005, most of the ICE`s work was done on a paid basis.  This has also helped to prevent losses to contractors in cases where projects have not progressed and, under unpaid ECI contracts, clients have been faced with claims from contractors.  Thanks for this article, but I would like to know what is the approach in case the funding closure does not occur, which part takes the risk of starting work and after leaving the project? One of Hyder`s defences was that their liability was limited. This is because, in Hyder`s case, she performed the works on the basis of a contract that stems from correspondence that explicitly refers to the limitation of Hyder`s liability. The problem for Hyder is that the contractor denied having reached an agreement on Hyder`s terms. Under a Contractor Early Participation System (IEF), a single contractor is selected at an earlier stage of the process and paid for his or her work on the plan.  This can be done based on client preference, either during the preliminary/conceptual phase or during the detailed design phase.  The contractor can then use their knowledge and experience to influence project design, increase construction capacity or value, and may be invited to discuss phase construction risks.  The contractor may choose to include its subcontractors in the supply chain in the process