Engineering Procurement Construction Management
As an experienced and most often as a client side pharmaceutical consultant, I’m often asked if an Engineering, Procurement, Construction Management (EPCM) is the best out of the following 3 project delivery methods,
- Engineering, Procurement, Construction (EPC) / Engineering, Procurement, Construction Management (EPCM),
- Design and Construct (D&C), or lastly
- Project and Construction Management (PCM).
The answer is, well it depends. In this 3 series of blogs, I will expand on the different contract types, list pro and cons and highlight some specific considerations for more complex projects such as medical device, pharmaceutical or veterinary facilities and then let you decide.
Engineering Procurement Construction
Overview
The Engineering, Procurement, Construction (EPC) method or turn key method is a variation of the design and construct method, however they are more complex and detailed.
A contractor is engaged by a principal to design, build and deliver the asset in an operational state, e.g. in the Pharmaceutical Industry this will include qualification, validation and a GMP license, so could include the manufacture of 3 validation batches.
A general “requirements specification” is provided to the contractor which focuses on the functionality and performance (user) requirements of the facility upon completion, enables the principal to step in, at completion, and ‘turn a key’ to operate the asset.
Where projects require significant engineering expertise, EPC contracts could provide the most suitable framework, the design is determined by functionality (rather than aesthetics), there is greater focus on performance requirements and therefore the principal has no need to shape the design.
Engineering Procurement Construction Management
Overview
This method is a variation of the project management model, the key feature is unlike a Project Manager, the EPCM contractor carries out the detailed engineering and design functions for the project and takes responsibility for procurement of major equipment, the main benefit of this is that it provides seamless and continuous responsibility for engineering and design.
This model differs from the EPC model because an EPCM contractor does not:
- provide construction work (only manages it), or
- deliver the completed project by an overall completion date (only manages it), or
- responsibility for the overall cost of the project.
The EPCM approach tends to suit principals who have the expertise and experience to manage the progress of the project and the size of the balance sheets, and to retain the cost and time risk of the project.
Contractual Relationships
An EPCM contractor:
- produces the design for the project,
- is typically responsible for breaking down the construction work into packages,
- administers and manages the project as the principal’s agent or representative,
- by managing tender, shortlisting vendors, NDA agreements, scoring systems,
- overseeing the principal’s commercial contracts.
Advantages/Disadvantages
See the discussion regarding project and construction management contracts.
More information on the other project management blogs –
Engineering Procurement Construction and Management (EPCM) (this blog)
Project and Construction Management (PCM)
