Question

Determine when to use either the engineering, procurement and construction (EPC) contract model or the engineering, procurement and construction management (EPCM) contract model. When is it appropriate to use EPC and when is it appropriate to use EPCM. Provide recommendations on how to decide for civil engineering projects.

Answer 1

There are two type of contracts used widely for the large scale projects: EPC and EPCM.

When to use EPC model:

When projects like multistorey buildings, high rise structures where the owner do a contract to complete the project within a stipulated time frame and a fixed cost agreed to the owner. And the owner is not ready to convene in the projects during the process until the finish time. The contractor does the entire material procurement and human resourcing. Contractor is responsible for the mistake done in the project and it is liable to the contractor.

When to use EPCM model:

This model is used for the projects like petrochemical, mining and power plants. In these type of projects, owner is responsible for construction cost, project time and he can do the outsourcing of the project, but the contractors only do the construction process under the owner's management.

Recommendations to select the model:

For civil engineering projects with operating facilities like water treatment industry, it is required to have highly skilled engineers with required design and blueprints. High voltage power stations require advanced construction strategies, high number of risks involved, the project is complex. For these types, EPC Model can be used. Project with less number of risks, simple projects, EPCM Model can be used