EPC vs. EPCM:两种合同模式的异同(一)

EPC vs. EPCM: Part 1 – Examining the Similarities and Differences Between the Two Contract Models

It is surprising that despite the number of teachings, seminars and conferences organized around the two contracting models (EPC and EPCM), many people inside and outside of the industry are still confused about what each model really entails and what the expectations/outcomes of each are. It is important to point out from the onset that though the two may look similar on first glance, they are entirely two different creatures. Let me explain.

EPC: Engineering, Procurement and Construction 

Under an EPC delivery model, an EPC contractor will generally be responsible for the Engineering design, Construction and Commissioning of a facility. An EPC contract will typically function as a 'turnkey' contract, meaning upon completion the owner will (ideally) only need to 'turn the key' to commence operation of the facility (a “Cradle to Grave “kind of thing). 

A typical EPC Delivery Model looks like this:

EPCM: Engineering, Procurement and Construction Management

An EPCM contract is, at its core, a Professional Services Contract. Broadly speaking, an EPCM contractor is not contractually obliged to provide the owner with a completed project “on time and on budget” nor does the contract take responsibility for the construction or quality of the facility.

 Instead, an EPCM contractor:

• Takes responsibility for the provision of the Engineering and Design (the E)

• Procures Equipment and Contracts as agent to the owner (the P)

• Manages the Construction Phase of the Project as the Owners Representative (the CM)

 A Typical EPCM Delivery Model looks like this.

EPC vs EPCM: which model to choose? 

Many factors play a part when thinking about which model to select, however, the most important factors must include: 

1. Level of risk the Contractor and Owner are prepared to take

2. Budget Constraints

3. Owner’s core competence

 In addition to those factors, in the drafting of these two Contract Models, the following factors are assessed and that is what makes the Contract either EPC or EPCM.

 Both types of Contracting Models work for different types of Projects, but the onus is on the Owners to make the right decision and stick to it in order to reap the benefits. Any deviation in strategy can make the difference between a failed project or a successful one.

 Does your organization use primarily EPC or EPCM models? Why