What is an EPC contract?
Contents |
[edit] Introduction
An engineering, procurement and construction (EPC) contract is sometimes referred to as a turnkey contract, although there are some differences between the two.
- In an EPC contract, the project company will do some basic engineering before handing over the project to the contractor. In a turnkey contract, the owner would specify certain technical aspects of the project, and then the turnkey contractor will have all the project controls until the contract is complete.
- A turnkey contractor is responsible for the design, procurement and construction of the project. The contractor is also responsible for commissioning and handing over the ready-to-use project to the owner or the client. In EPC, the commissioning is not a part of the contract as in a turnkey contract.
[edit] Engineering or designing aspects of an EPC contract
The design duties of EPC contractors are:
- Basic engineering.
- Detailed engineering.
- Detailed design.
- Planning.
- Construction engineering.
- Civil engineering.
[edit] Procurement aspects of an EPC contract
The responsibilities in procurement are:
- Logistics.
- Transportation.
- Purchasing.
- Invoicing.
- Receiving the materials.
[edit] Construction aspects of an EPC contract
The functions involved in the construction of a project are:
- An EPC contractor handles the design and construction management.
- Electrical installation.
- Water supply.
- Sanitation and drainage work.
- Carving cupboards and showcases.
[edit] Advantages of an EPC contract
By choosing an EPC contractor, the project owner may have several advantages, including:
- Single point of responsibility.
- Fixed contract price
- Fixed completion date
- Set performance specification.
- Performance guarantees.
- Security.
- Caps on liability.
- Rights to suspend the project.
- Flexibility in ordering variations.
- Force majeure
[edit] Limitations of an EPC contract
Like any other contract, an EPC contract also has some limitations. These include:
[edit] Difference between EPC and EPCM contracts
The definition of EPCM is engineering, procurement, construction and management. Although it sounds similar to an EPC project, an EPCM contract is very different from the former. An EPC contractor handles design, procurement, construction and hands over the project to the end-user. By comparison, the EPCM contractor is mainly concerned with the supervision of the project, although an EPCM contractor is also responsible for the detailed design and the overall project management.
See also: Engineering procurement and construction contract.
[edit] Related articles on Designing Buildings
Featured articles and news
Design and construction industry podcasts
Professional development, practice, the pandemic, platforms and podcasts. Have we missed anything?
C20 Society; Buildings at Risk List 2025
10 more buildings published with updates on the past decade of buildings featured.
Boiler Upgrade Scheme and certifications consultation
Summary of government consultation, closing 11 June 2025.
Deputy editor of AT, Tim Fraser, discusses the newly formed society with its current chair, Chris Halligan MCIAT.
Barratt Lo-E passivhaus standard homes planned enmasse
With an initial 728 Lo-E homes across two sites and many more planned for the future.
Government urged to uphold Warm Homes commitment
ECA and industry bodies write to Government concerning its 13.2 billion Warm Homes manifesto commitment.
From project managers to rising stars, sustainability pioneers and more.
Places of Worship in Britain and Ireland, 1929-1990. Book review.
The emancipation of women in art.
Call for independent National Grenfell oversight mechanism
MHCLG share findings of Building Safety Inquiry in letter to Secretary of State and Minister for Building Safety.
The Architectural Technology Awards
AT Awards now open for this the sixth decade of CIAT.
50th Golden anniversary ECA Edmundson awards
Deadline for submissions Friday 30 May 2025.
The benefits of precast, off-site foundation systems
Top ten benefits of this notable innovation.
Encouraging individuals to take action saving water at home, work, and in their communities.
Takes a community to support mental health and wellbeing
The why of becoming a Mental Health Instructor explained.
Mental health awareness week 13-18 May
The theme is communities, they can provide a sense of belonging, safety, support in hard times, and a sense purpose.
Mental health support on the rise but workers still struggling
CIOB Understanding Mental Health in the Built Environment 2025 shows.
Design and construction material libraries
Material, sample, product or detail libraries a key component of any architectural design practice.