EPC stands for Engineering, Procurement and Construction. Although the EPC (Engineering, Procurement and Construction) contract and the EPCM (Engineering, Procurement and Construction Management) contract have been present in the construction industry for many years, there is still confusion about the fundamental differences between these contracts, the role that each party must play and when to use one contract compared to the other. EPC contracts are one of the most popular types of contracts in the construction industry. The engineer and contractor perform the detailed technical design of the project, procure all the necessary equipment and materials, and then build to deliver a work facility or asset to its customers. Companies that carry out EPC projects are commonly referred to as EPC contractors. Another distinguishing feature of the EPC contract is that the EPC contractor enters into separate agreements with contractors, suppliers, subcontractors, subcontractors, etc. This is advantageous for the owner or client of the project as they will contact the EPC Contractor to assume full responsibility for the project and, in the event of a dispute between the EPC Contractor and any party to the sub-agreements, resolve the dispute without the owner or client being involved in the dispute. In most cases, the EPC Contractor has a right of recourse against a party to a subcontract that was liable for the loss or damage. The EPC contractor must ensure that its contracts reflect those it has with the client`s owner. What is EPC? and what are the turnkey projects? Here you will find everything you want to know about an EPC and turnkey projects.
Below, we`ve also explained the difference between an EPC and a turnkey project. The interest in getting EPC and turnkey contract plans off the ground comes from the fact that they both work to carry out different types of procedures at different costs. The EPCM contractor has a duty to ensure that the engineering and design of the project conform to the technical and functional specifications of the project. The monitoring, management and coordination of the construction interface according to a detailed schedule is the primary responsibility of the EPCM contractor. The fundamental difference is the role of the EPC or EPCM contractor. In an EPC contract, the EPC contractor develops the project from start to final completion. The owner or client of the EPC project provides the EPC contractor with a detailed design, including technical and functional specifications, so that the EPC contractor can build the project within a certain time frame and deliver it to the “key rotation”. For this reason, EPC contracts are often referred to as “turnkey” projects. The scope of work should be clearly defined in the terms of reference; Therefore, changes in the scope of services in the EPC Treaties should not be customary. For this reason, an EPC contract is often a fixed-price contract or a global lump sum contract.
Any cost outage is a risk that falls on the EPC contractor, so cost control is a top priority. “Engineering, Procurement and Construction” EPC is a special form of contractual agreement used in certain industries where the EPC Contractor is held responsible for all activities, from design, procurement, construction to commissioning and delivery of the project to the end user or owner. Here are some points that will be addressed to show what an EPC contract covers: Turnkey projects: preferred when several activities are involved. The single part reduces the effort of coordination with many contractors who are otherwise needed. An EPC contract includes the E (Engineering/Design), the P (Procurement) and the C (Construction), which represents the entire project, from design to commissioning (turnkey). In addition to the delivery of the complete system, the EPC contractor must deliver it within a guaranteed time and price. Choosing the right contract EPC and EPCM contracts offer both of these benefits to owners. EPCM can bring cost savings, but this is offset by the fact that the owner must allocate significant resources to an EPCM project. Owners need to consider whether their resources can be better invested elsewhere in the business. In fact, the customer should be able to “just turn the key.” The supplier of a turnkey project is called the general contractor (or primary supplier, direct supplier or prime contractor). Synonyms for the term turnkey project are a turnkey solution, a turnkey delivery or a ready-to-use solution.
3- Turnkey, the contractor is responsible for the construction and commissioning, commissioning and transfer of the installation to an employer, but in EPC it may be the responsibility of another third party to carry out commissioning and commissioning. No matter how you decide to structure your project, you want to work with a contractor you trust. Matrix has the reputation and experience to carry out your project with integrity. The EPCM Contractor is responsible for entering into contractual agreements on behalf of the owner or client with other contractors, vendors, subcontractors and subcontractors as part of a tendering process. The EPCM contractor is engaged by the owner or client for the construction management role, while the owner or client is bound by various contractual relationships for construction-related work. From the point of view of an owner or customer, a disadvantage lies in being bound by various contractual relationships in the event of a dispute. Unlike the EPC model, in most cases, the owner or customer will be involved in a dispute with one or more of the other parties related to the construction of the project to which the EPCM contractor must offer assistance. Unlike the EPC model, the EPC contractor is not directly involved in the construction of the project, but is responsible for the detailed planning and overall management of the project on behalf of the owner or client. While an EPC contract takes the form of a design and construction contract, the EPCM model can be considered a professional service contract.
The next difference is who is responsible for finalizing a design for EPC and a turnkey contract. An EPC plan requires the contractor to prepare a complete design of a system where it is more efficient and easier to read. An EPC contract is a turnkey solution, which means that the construction company offers the complete set of services. Under an EPC contract, the owner hires the EPC contractor, who then provides their own engineers, consultants, suppliers and other contractors. In an EPC contract, the contractor assumes full responsibility for the project and takes care of the design, procurement, construction and commissioning. The plant must achieve a certain level of efficiency, which is indicated in the contract as the “Specifications” section. Matrix Service Company offers both types of services to its customers…