What Is EPC in Construction?

February 26, 2024

A growing number of companies are pursuing EPC projects, also known as turnkey construction. An EPC contract, which stands for Engineering, Procurement and Construction, entails one contractor taking responsibility for the design, procurement, and construction of a plant or facility. This approach streamlines project delivery by eliminating the need for separate contracts with specialized contractors for each of these phases.

The EPC contractor begins with a detailed scope of work, which includes all technical and functional specifications that must be met by the machinery or facility being built. The contractor’s engineering team then works to develop a highly disciplined design that strikes a balance between efficiency and budget requirements. This detailed design will help reduce the need for change orders during the construction phase, which can increase overall project costs and lead to delays.

Following the completion of the design, the EPC contractor moves on to the procurement phase. This involves sourcing and purchasing all essential materials, equipment, and components based on critical factors like quality, reliability, cost, and delivery timelines. This portion of the process often includes the EPC contractor establishing and managing relationships with suppliers, manufacturers, and vendors, as well as conducting a bidding process to select subcontractors responsible for specialty scopes.

After the completion of the construction phase, the EPC contractor will conduct detailed inspections and testing to ensure that the facility or machinery operates as intended by the specification. The final step is commissioning, which involves the contractor ensuring that all systems and components operate as designed, prior to handover.

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