Putting the supply contracts into force launches the execution of the project.
The scope of these supply contracts depends on the approach for project execution selected during concept design and basic design.
Two important approaches for project execution are the EPC approach and the EPCM approach.
Engineering, procurement and construction (EPC) means that the Owner sings one contract with one Contractor who is responsible for, as the name suggests, engineering, procurement and construction. The Contractor takes full responsibility for delivery of a plant as per the specification and will hand over the functioning factory. Therefore, the synonym “turn-key contract” or “lump-sum-turn-key contract”.
Such contracts are often based on the FIDIC standard contract terms. Read more about these terms and the services an engineering consultant provides for a EPC project.
This approach has advantages, mainly because one Contractor is responsible for all the works. But it has also disadvantages, one very important one being the premium the Owner needs to pay to the Contractor to take the overall responsibility. Another disadvantage might be that the Owner has reduced rights during contract execution, for example when selecting sub-suppliers.
These disadvantages are overcome with an engineering, procurement and construction management approach (EPCM) or “project management approach” for project execution.
With this approach, the Owner hires an EPCM contractor (“project manager”) who manages the design, procurement, and construction on behalf of the Owner, rather than executing all tasks directly.
For execution itself, the Owner concludes supply contracts with suppliers, design contractors, erection contractors, etc.
The EPCM contractor acts as a Consultant, overseeing multiple subcontractors and suppliers. This model offers flexibility, allowing the Owner to retain control over decisions and contracts while benefiting from expert project management.
Read more about the works of an engineering consultant as EPCM contractor here.
Apart from serving as Engineer as per FIDIC contract terms for an EPC project or as EPCM contractor in an EPCM project, IBBL provides other services during project execution: