From an owner or principal's perspective, there lies a disadvantage in being bound to various contractual relationships in the event of a dispute. The EPCM contractor is contracted by the owner or principal for the construction management role, while the owner or principal is bound to various contractual relationships for construction related works. The EPCM contractor is responsible for establishing contractual arrangements on behalf of the owner or principal with other contractors, vendors, sub-contractors and sub-vendors, through a tender process. Supervising, management and co-ordinating construction interface in accordance with a detailed schedule is the key responsibility of the EPCM contractor. The EPCM contractor has a duty to ensure that the engineering and design of the project is in compliance with the projects technical and functional specifications.
#TENDER MANAGER SIGNIFICATO PROFESSIONAL#
While an EPC contract takes the form of a design and construction contract, the EPCM model can be regarded as a professional services contract. In contrast to the EPC model, the EPCM contractor is not directly involved in the building and construction of the project, but is rather responsible for the detailed design and overall management of the project, on behalf of the owner or principal. The EPC contractor must ensure that its contracts mirror those that it has with the owner of principal. The EPC contractor will, in most cases, have a right of recourse against a party to a sub-agreement who was responsible for causing the loss or damage.
#TENDER MANAGER SIGNIFICATO FULL#
This is advantageous to the owner or principal of the project, as they will look to the EPC contractor to take full responsibility for the project and, in the event of a dispute between the EPC contractor and any party to the sub-agreements, to resolve the dispute without the owner or principal being required to be a party to the dispute.
Any shortfall of costs is a risk that rests with the EPC contractor, making cost control their number one priority.Ī further identifying feature of the EPC contract is that the EPC contractor enters into separate agreements with the contractors, vendors, sub-contractors, sub-vendors and so on. For this reason an EPC contract is often a fixed price contract or an all-encompassing lump sum contract.
The scope of work should be clearly defined in the contract documents therefore, amendments to the scope of work should not be a common feature in EPC contracts. This is why EPC contracts are often referred to as "turnkey" projects. The owner or principal of the EPC project provides the EPC contractor with a detailed design including technical and functional specifications, in order for the EPC contractor to build and deliver the project to the "turn of the key", within a specified time period. In an EPC contract, the EPC contractor develops the project from commencement to final completion. The fundamental difference is the role of the EPC or EPCM contractor. Hogan Lovells Publications | January 2016 EPC or EPCM contracts?Īlthough the engineering, procurement and construction (EPC) contract and the engineering, procurement and construction management (EPCM) contract have been present in the construction sector for many years, there remains confusion as to the fundamental differences between these contracts, the role each party is required to play, and when to use one contract over the other.
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