Project Management

Engineer-Procure-Construct (EPC)

The Engineer-Procure-Construct (EPC) project delivery method has emerged as a preferred choice in construction.  With an EPC contract, the owner has a single point of contact for the project.  Under this model, the EPC firm handles the design, procurement of all equipment and construction materials, as well as construction services for turnkey delivery of the facility, either at a lump-sum price or on a cost plus basis.  EPC firms do not need to have all the required resources in-house, but do need to competently ensure efficient and effective communication throughout the project with all parties involved.  The EPC process starts with a preconstruction effort that involves some preliminary planning and engineering to define the scope, schedule, and ROM costs of the project.  The preconstruction effort can typically be completed for 1% to 3% of the total cost.  Validation is most often managed directly by the client or through a separate validation firm to ensure this critical activity is successfully delivered by the EPC.  

An EPC firm knowledgeable in construction should be able to work with the owners to develop a validation master plan at the onset of the project and incorporate the plan into the project estimate, schedule, and quality control.  The EPC firm has complete responsibility for the project from start to finish. Project scope and estimates are developed by the EPC firm.  The project schedule and project budget are known before the project enters detail design or construction phases.  All design and construction scope and budget risks are passed to the contractor.  EPC project delivery offers the tightest integration of activities during the construction process through a structured and disciplined approach.  In addition, communication among the design, procurement, and construction teams begins immediately.  The EPC model helps align team members for optimal project performance.  This often results in a collaborative, value-based construction process.  EPC delivery is typically used for process or equipment driven projects. The EPC model reduces project risks for the owner, delivers predictable results, and maximizes the effectiveness of capital planning.

Project owners often engage a third party company to provide oversight on their behalf to the EPC and overall project execution.

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