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Engineering, Procurement, and Construction (EPC) Contracts Are The Most Common Form of

Engineering, procurement, and construction (EPC) contracts are commonly used for large infrastructure projects and require the contractor to deliver a complete and operational facility by a guaranteed date and price. The EPC contractor coordinates all design, procurement, and construction work. EPC, LSTK, and EPCC contracts are essentially the same type of contract where the contractor is responsible for engineering, procurement, construction, and commissioning of the entire project on a fixed-price lump sum basis.

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93 views

Engineering, Procurement, and Construction (EPC) Contracts Are The Most Common Form of

Engineering, procurement, and construction (EPC) contracts are commonly used for large infrastructure projects and require the contractor to deliver a complete and operational facility by a guaranteed date and price. The EPC contractor coordinates all design, procurement, and construction work. EPC, LSTK, and EPCC contracts are essentially the same type of contract where the contractor is responsible for engineering, procurement, construction, and commissioning of the entire project on a fixed-price lump sum basis.

Uploaded by

Ayman Riyadh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Engineering, procurement, and construction (EPC) contracts are the most common form of

contract used to undertake construction works by the private sector on large-scale and complex
infrastructure projects. Under an EPCC contract a contractor is obliged to deliver a complete facility
to a developer who need only turn a key to start operating the facility, hence EPCC contracts are
sometimes called turnkey construction contracts. In addition to delivering a complete facility, the
contractor must deliver that facility for a guaranteed price by a guaranteed date and it must perform
to the specified level. Failure to comply with any requirements will usually result in the contractor
incurring monetary liabilities. The EPCC contractor coordinates all design, procurement and
construction work and ensures that the whole project is completed as required and in time. He also
may or may not undertake actual site work. Various abbreviations used for this type of contract
are LSTK for lump sum turn key, EPIC for engineering, procurement, installation &
commissioning and EPCC for engineering, procurement, construction and commissioning. Use of
EPIC is common e.g. by FIDIC and most Persian Gulf countries. Use of LSTK is common in
Kingdom of Saudi Arabia. Use of EPCC is common in Qatar and some other countries.
The engineering functions include;

 Basic engineering
 Detailed engineering
 Planning
 Construction engineering
The procurement functions include;

 Logistics & transport


 Receiving
 Procurement
 Invoicing
 Purchasing
The construction functions include;

 Electrical installation
 Mechanical erection
 Civil engineering
The commissioning functions include;

 After-sales-service
 Testing & commissioning
 Modernization of plants
An EPC, LSTK, or EPCC are all same types of contract. This form of contract is covered by the
FIDIC Silver Book [1] containing the title words EPC/turnkey. The initialism EPCM is also encountered
frequently on international projects, but this is very different from EPC. EPCM is a services-only
contract, under which the contractor performs engineering, procurement and construction
management services. In an EPCM arrangement, the client selects a contractor who provides
management services for the whole project on behalf of the client.

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