The concepts of EPC and EPCM that have come to the Russian engineering industry clearly regulate the obligations of the parties when concluding contracts. The definition of “turnkey” is closer to Russian builders. However, the functionality of EPC and EPCM contractors has its own distinctive features and goes beyond the usual construction contract.
EPC: functionality and obligations
The EPC contractor implements the following project functions:
- responsible for the implementation of all stages from the development of the project to the commissioning of the facility;
- independently selects suppliers and subcontractors, controls the work of all involved specialists;
- in addition to solving engineering tasks, he manages construction and all purchases;
- participates in negotiations as an agent of the customer;
- shares the warranty obligations for the implemented project with other participants.
The service of attracting an EPC contractor to the project is paid for in a fixed amount, and is included in the estimate in full.
It is beneficial for the customer to hire an EPC specialist for a number of reasons:
1) convenient format – one counterparty is responsible for the implementation of all project stages. At the same time, the cost structure for EPC engineering is as transparent as possible;
2) documentary support – timely and high-quality formation of interim reports; - 3) control of the activities of suppliers, contractors and other involved performers.
Differences between EPC and EPCM contracts
Any project includes a large number of stages:
- design;
- Construction works;
- commissioning;
- commissioning of the constructed facility.
The Western engineering model of EPCM involves the addition of a control function. In other words, the key task of the EPCM contractor is to assess the compliance of the initial parameters (presented in the form of a combination of professionalism, capabilities and labor resources) with the necessary requests for each supplier and contractor. Only a competent choice of performers determines the qualitative distribution of responsibilities and areas of responsibility.
The EPSM specialist solves the following tasks:
- coordinates the activities of all project participants;
- resolves controversial issues;
- plans a general implementation scheme;
- adjusts plans in case of force majeure;
- takes care of reducing downtime and minimizing all types of risks.
Important: the implementation of the EPSM engineering function involves the control and management of all key processes: design, procurement, construction.
The contractor does not just perform his duties efficiently and controls specific work, he manages the construction project with the assumption of responsibility. The EPSM contract includes the cost of the contractor’s services, which must complete the project by a certain date.
ECOTECH LLC and EPCM contract service
Our engineering company offers customers and investors transparent management of all project stages. The ECOTECH team has the necessary competencies to optimize the supply chain, competently select suppliers and performers, and organize work processes in strict compliance with the schedule.
Our engineers are ready to join the project at any stage, but with regard to the EPSM contract, it is preferable to involve specialists from the very beginning of the cycle (development of project documentation).
You can ask questions about ordering a service or discuss partnership details by phone (indicated on the main page of the website) or in person at the company’s office.