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
We're expanding our collaborative mission by launching DB Intelligence, an exclusive market research advisory panel. Built environment professionals can now get paid to share their expertise on industry trends, products and services.
Panel members receive direct financial incentives for participating in research projects like short surveys, 1-2-1 interviews and focus groups. Register today to shape the future of the construction sector.
Planning condition discharge in England and Wales
A brief exoplanation from a building compliance expert, with further links.
Overheating guidance and tools for building designers
Guidance for dealing with element of building fabric control that have increasing importance.
Shading for housing, a design guide
From the Good Homes Alliance and British Blind and Shutter Association.
UK Standard Skills Classification (SSC)
A shared framework for describing skills needs.
Social media ban consultation comes to close
CIOB urges UK Government to consider social media’s role in careers guidance in ban debate.
The latest of eight Skills England apprenticeship units
The addition of battery manufacturing welcomed by ECA with a warning about the risks of fast-tracked apprenticeship units.
Building Control Independent Panel final report
A precis of a key report led by Dame Hackitt with full recommendations and link to the government response.
Building Safety recap April, 2026
A short and longer run-through of the month, with links to further information and sources.
CIAT May 2026 briefing.
From medieval scribes to modern word art.
ECA welcomes crackdown on late payment and push for clean energy, whilst CIOB seek fixed cladding removal timeframes.
Cyber Security in the Built Environment
Protecting projects, data, and digital assets: A CIOB Academy TIS.
Managing competence in the built environment
ITFG publishes new industry guide on how to meet the ICC principles.
The UK's campaign to reduce noise pollution: Mythbusting, articles and topic guides.