An Early Start Agreement (ESA) can refer to a number of different legal agreements, but in the context of construction projects, it typically refers to an agreement between the owner and contractor allowing the contractor to begin work on certain portions of the project before the entire project design is complete.
Why would an owner agree to an ESA?
There are a few reasons why an owner might agree to an ESA. One common reason is to accelerate the overall timeline of the project. By allowing the contractor to begin work on certain portions of the project before the design is complete, the owner can get a head start on construction and potentially shave weeks or months off the overall timeline.
Another reason an owner might agree to an ESA is to take advantage of favorable weather conditions. For example, if the project involves outdoor work that is only feasible during the summer months, the owner might agree to an ESA so that the contractor can begin that work as soon as possible.
What are the risks for the owner?
There are some risks associated with agreeing to an ESA. One risk is that the owner might end up paying for work that ultimately needs to be re-done because the design changes mid-project. For example, if the contractor builds a foundation before the design is complete and the design ultimately changes, the owner may have to pay to tear down the work that was already completed and start over. To mitigate this risk, the ESA should include clear provisions for change orders and cost adjustments.
Another risk of an ESA is that the owner might end up with a partially completed project that is unusable. For example, if the contractor completes the foundation but then runs into issues with the design that prevent the rest of the project from being completed, the owner might be left with a partially built structure that cannot be used. To mitigate this risk, the ESA should include clear milestones and termination provisions.
In conclusion, an Early Start Agreement can be a useful tool for accelerating construction projects, but it is important for owners to carefully consider the risks before agreeing to one. By including clear provisions for change orders, cost adjustments, milestones, and termination, owners can minimize their risk and ensure that the project is completed on time and within budget.