Engineering, procurement, and construction

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Engineering, procurement, construction and commissioning (EPCC) contracts are the most common form of contract used to undertake construction works by the private sector on large-scale and complex infrastructure projects. Under an EPCC contract a contractor is obliged to deliver a complete facility to a developer who need only turn a key to start operating the facility, hence EPCC contracts are sometimes called turnkey construction contracts. In addition to delivering a complete facility, the contractor must deliver that facility for a guaranteed price by a guaranteed date and it must perform to the specified level. Failure to comply with any requirements will usually result in the contractor incurring monetary liabilities. The EPCM contractor coordinates all design, procurement and construction work and ensures that the whole project is completed as required and in time. The EPCM contractor may or may not undertake actual site work. Other abbreviations used for this type of contract are LSTK for Lump Sum Turn Key, EPIC for Engineering, Procurement, Installation & Commissioning and sometimes also EPCC which is short for Engineering, Procurement, Construction and Commissioning. Use of EPC is common e.g. by FIDIC and most Persian Gulf countries. Use of LSTK is common in Kingdom of Saudi Arabia. Use of EPCC is common in Qatar and some other countries e.g. by Qatar Petroleum.

The Engineering functions include;

  • Basic Engineering
  • Detailed Engineering
  • Planning
  • Construction Engineering

The Procurement functions include;

  • Logistics & Transport
  • Receiving
  • Procurement
  • Invoicing
  • Purchasing

The Construction fucnctions include;

  • Electrical Installation
  • Mechanical Erection
  • Civil Engineering

The Commissioning functions include;

  • After-sales-service
  • Testing & Commissioning
  • Modernization of plants

The initialism EPCM is also encountered frequently on international projects, but this is very different from EPC. EPCM is a services-only contract, under which the contractor performs engineering, procurement and construction management services. This form of contract is covered by the FIDIC Silver Book [1] containing the title words EPC/Turnkey.

Therefore, an EPC, LSTK or EPCC are all same types of contracts a typical well-known example of which is the Silver Book of FIDIC. Engineering, Procurement and Construction Management (EPCM) is a special form of contracting arrangement. In an EPCM arrangement, the client selects a contractor who provides management services for the whole project on behalf of the client.

See also[edit]

References[edit]

  1. ^ "FIDIC Silver Book" (PDF).

Notes[edit]