However, the project was completed on time and within the timescale. Advantages and disadvantages of contracting +1. The employer relied on a weak feasibility study at the tender stage. Consideration may need to be given, however, to the impact of the EPCM’s presence on site on the policies to be maintained by the other project participants. The engineer should be involved even where the Silver Book has been used (via an amendment in particular conditions). These performance and functional criteria may also be simply defined as ‘categories’ with particular values to be filled out by the contractor in its bid. Under an EPCM contract, the owner maintains more control of the project. But these issues need to be thought through at conception of the contract strategy taking into account the contractors’ appetite for risk gauged according to the expected market conditions at the time of execution. This is especially so in construction projects for power plants, steel mills, factories and manufacturing plants in the petrochemical and mining industry and in the field of environmental and water treatment projects. This can create problems for the Owner where the plant, for whatever reason, fails to produce to the levels the Owner required. This might be described as being primarily a professional services contract. The administrative burden of the owner directly negotiating and contracting with each of the contractors or suppliers is far greater than under EPC and significant demands are placed on the owner’s skills and resources (although the EPCM contractor may be able to ease this burden). These contracts will be direct agreements between the Owner and the trade contractors. The EPCM contractor arranges the tender process and selects (in conjunction with the Owner) the trade contractors. However, as the EPCM contractor performs a largely professional role it will usually have an overriding obligation to exercise reasonable skill and care in carrying out its services. How to increase brand awareness through consistency; Dec. 11, 2020. Two of these drawbacks are key to understanding EPCM contracting: No single point of responsibility For more information on EPC and EPCM contract advantages and disadvantages, contact: Ron Douglas or connect with Ron on LinkedIn. The significance attributed to plant delivery and uniqueness of product will no doubt affect the contractor’s negotiating position. Copyright © 2013. See Loots and Henchie (2013) for more details. On large scale projects, the Owner may be well advised to take out “all embracing” project wide. A typical overriding obligation, It is important to recognise that with this typical type of obligation, the EPCM contractor will. The CM at risk is a delivery approach where a construction management firm acts as an owner's consultant during the pre-development phase of the project. They manage the project as the owner’s agent and oversees the project. Eur Ing Stephanus ROUX C Eng , IntPE(uk) , FIET (uk) , FInstMC(uk), Do We Want Our History Built Upon Lies? In short, an EPC contract is a design and construct contract where a single contractor takes responsibility for all elements of design (engineering). Dec. 15, 2020. A significant disadvantage to the Owner of the EPCM route is that if the project goes awry, the Owner can find itself faced with a number of battlefronts. It lists certain advantages, disadvantages and their need in contract. 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