EPC vs. EPCM:两种合同模式的异同(二)

EPC Vs EPCM: Part 2 - Assessing the Risk of Both Models

As already mentioned in Part 1 these two types of Contracting Models work in different circumstances.  In Part 2, I’m going to talk about the advantages of each type of Contracting Model bearing in mind—once again--the three main factors that play a part in determining which model to adopt:

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

2. Budget Constraints

3. Owner’s core competence

 EPC: The Advantages

1. One stop shop - one point of contact as the Contractor is 100% responsible

2. “Hands off” approach to project - the detailed design is the EPC contractor’s prerogative. Therefore, the owners need to properly define the design parameters as well as deliverables. What you specify from the onset is what you will get at the end including consumption of utilities and emissions.

3. Minimal staffing requirements

4. Minimal legal risk

5. Well suited for well-defined projects with detailed engineering complete before EPC contractor selected (minimal unknowns)

EPC: The Disadvantages

1. Cost – the EPC contract on the most part comes in 10 – 20% more expensive compared to other models. This is largely due to the fact that the project risk is more evenly distributed between the Owner, the suppliers and the contractors

2. Transparency – there is little transparency to the way cost is incurred

EPCM: The Advantages

1. Lower overall cost and no mark-up due to contract risk - competitive pricing advantage remain with the owner

2. Owners staff sense of ownership

3. More control over process

4. More transparency on project costs

5. Well suited for less defined projects with anticipated changes to scope of the contract/supply

6. Less Legal Litigation – teams can identify issues early and remedy situation before larger problems arise

7. Owner’s financing flexibility

 EPCM: The Disadvantages

1. Owners carry most of the risks

2. Increased effort of the owners is required because of the heavy involvement in day to day operations

3. There is the potential for gap in scope coverage between the contractor and vendors/suppliers

 From your experience, what advantages and disadvantages have you seen in each of the models?