There are two types of construction contracts that are common in today’s high-voltage substation construction marketplace: EPC and EPCM. When deciding which one is right for you, there are several factors to take into account. Let’s take a look at the two types of contracts and their major differences.
EPC (Engineering, Procurement, Construction)
An EPC contract is a turnkey solution, which means that the construction company provides the complete package of services. Under an EPC contract, the owner hires the EPC contractor, who then supplies its own engineers, consultants, suppliers and other contractors. With an EPC contract, the contractor takes full responsibility of the project, handling the design, procurement, construction, and commissioning.
EPCM (Engineering, Procurement, Construction Management)
This contract is common among the mining, petrochemical and power plant industries. Under an EPCM contract, the owner maintains more control of the project. The contractor manages the construction project, but only under the direction of the owner. With an EPCM contract, the owner is responsible for hiring suppliers, construction workers and other contractors.
Benefits of the EPCM contract
- • The owner is in control of the project.
- • The owner is free to choose and hire his own additional contractors.
Benefits of the EPC contract
- • A fixed price contract is established at the beginning of the job. There are no hidden fees that spring up during the construction project.
- • If any mistakes occur during the building process, the contractor is liable to fix them. With an EPCM contract, the owner is responsible for rectifying
anything that went wrong.
- • The contractor is fully responsible for the quality of the construction job. Alternatively, under an EPCM contract, the owner is fully responsible
and must ensure that high quality work is done.
- • Under an EPC contract, there is a fixed date for completion.
- • The contractor handles procurement for the owner.
Which is right for you?
First to consider is your industry. If you’re looking to build an operating facility, an EPC contract is likely the most beneficial choice. Your EPC contractor will provide high quality engineers who will supply a design blueprint and a cost estimate for each separate area or phase of construction.
The EPC contractor can follow a strict schedule and will hire the correct contractors for your project without any effort on your part. An EPC contract is best for those looking to build high voltage power stations, as the nature of the project is complex and construction can introduce a number of risks.
Beta Engineering offers high quality EPC services for high voltage power systems. Our friendly staff and top rate engineers will handle your entire project from start to finish. Contact us today to learn more.