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EPC vs. EPCM Projects: Understanding Execution Models

The main shared goal of both EPC – that is, engineering, procurement, and construction – and EPCM – engineering, procurement, construction, and management is to ensure that construction is enhanced. Each of these delivery methods, however, use different approaches when implementing methods to enhance construction. In this Pro Support Solutions article, we’ll go into detail about how EPCM and EPC delivery methods for products are different. We will also explain why each of these delivery methods offer advantages for your project and which disadvantages you should consider. EPC vs. EPCM Projects Understanding Execution Models

What is EPC?

EPC means engineering procurement construction. With EPC contracts, you can expect the engineer to take charge of your project from beginning to end. Since you hand all control of your project over to the engineers, you will not necessarily have control over the decisions made.

What is EPCM?

EPCM means engineering, procurement, construction, and management. Unlike EPC contracts, you can have an input and be involved in the decisions that are made for your engineering requirements. Consultants will handle each stage of the engineering process, which will involve the planning stage through to the coordination of contractors. EPCM gives you a single point of contact, which will oversee the main key elements of this delivery method

What are the key elements of EPCM that engineering consultants will handle?

The key elements of EPCM are: Providing engineering options, managing the procurement process, helping with construction management, and managing the process with your input.

Providing engineering options

From the moment you hand the project brief to the EPCM contractor, specific and specialist engineering options are set out and arranged before being executed as part of this key element of EPCM.  You can be directly involved with the decisions and the costs with this execution model and gain the guidance of your engineers when carrying out the engineering phase.

Managing the procurement phase

From process organization to providing answers in terms of technical quotation, to vendor pre-qualification and evaluation of technical aspects of the project, managing the procurement phase is done with the assistance of engineering consultants. One thing to remember is that you will be involved in all of these decisions and be a part of this execution model. Your contractors will provide you with recommendations and assist you in these choices.

Helping with construction management

Construction management involves an in-depth planning phase for all of the elements that will be used in construction as well as an acknowledgement of the costs and logistics required, and the management of contractors on site and the management of equipment. All of this, as well as assistance with the thorough supervision of the construction phase, is required.  All of these elements will be communicated from the contractors themselves to the project team, who will pass the information on to you as their client under the EPCM execution model.

Maintaining and managing the entire process with your input

Project management is at the heart of EPCM. The essence of EPCM is that you’ll receive a top service in terms of project management and be able to contribute to the project at the same time. EPC vs. EPCM Projects Understanding Execution Models

How is EPC different from EPCM in terms of engineering and procurement?

There are a few main differences between EPC and EPCM delivery methods, one of which is the way that contracting companies carry out front end engineering. For EPC delivery methods, all front end engineering is done by the contracting company. They also carry out the design process and the construction process. Turnkey contracts are common with EPC companies. With EPCM methods, the main difference is the construction service. Because although both engineering and procurement are the same, EPCM delivery methods and contractors can hire different contractors for construction. This means management can differ in terms of who oversees the construction part of the project. So, one of the main differences is management. Whereas EPC execution models will handle the project on a contract basis, EPCM will help you manage the project

EPC VS. EPCM: How are they different in terms of risks?

There is an advantage of using EPCM delivery models: a project owner can stay in control of their project and select the contractors they feel are suitable for particular project areas. On the other hand, EPC delivery models can integrate various departments for the project and ensure that in the engineering and construction processes, the accountability of the work is down to one source.

What to consider when choosing EPCM and EPC delivery methods

Although EPCM is beneficial because particular contractors can be selected for certain project areas, using several service providers requires distinct contracts to be distributed. Project delivery can be limited because of this, because the responsibilities of service providers are not wholly integrated. In terms of the EPC delivery method, if a project hasn’t been defined in terms of its scope, this is one risk to consider.

What are the advantages of EPC execution models?

There are a couple of advantages of EPC execution models, which are listed below

Less effort required during project execution 

The first advantage of EPC execution models is that you won’t have to expend much effort with the process, and that all risks are handled by the contractors. This means that there will be no need for you to make complex decisions that are difficult to make. You will also not have to commit many staff members to the process because the engineers will handle the process for you.

Handle less responsibility when projects are being carried out

It also means that, because the risks are handled by the contractors, you will not have to take responsibility for any delays that happen. You won’t need to worry if any costs are different or quoted incorrectly because the contractors will take responsibility for this.

What are the disadvantages of EPC execution models?

Three important disadvantages of EPC execution models are listed below.

Increased cost compared with EPCM

Generally, you can expect a higher cost when you choose an EPC execution approach because the contractors take responsibility for risks associated with delays and misquoted costs. 

Explicit planning required

You also have to bear in mind that all engineering plans must be precise and detailed when you submit them to an engineer contractor. They should specify materials and components and be very specific. The main reason for this is because contractors will not expect you to contribute to decisions when executing the project under an EPC execution model approach.

Lack of input in decisions from your perspective

Finally, financial decisions related to components will be handled entirely by the contractor team, so you will not be involved with these decisions. EPC vs. EPCM Projects Understanding Execution Models

What are the advantages of EPCM execution models?

Three critical advantages of the EPCM execution models are the following points.

Increased project flexibility

First, you get more flexibility over your project as a client. This will ensure the outcome is well-aligned with your plans and specifications for your project.

Changes and adjustments are possible

You will also have no problems if your project needs to be altered or adapted, or if your project is not entirely specific, because you can share your ideas with your engineers and make decisions together.

Support and recommendations from your engineers is useful

What’s more, you will be able to get the support and advice of your engineers and consultants during the process of getting the project underway.

What are the disadvantages of EPCM execution models?

There are a couple of disadvantages of EPCM execution models, which are listed below.

More effort required from your perspective

As a client, you will have to take more responsibility and get involved in many decisions which can take time and effort. You may possibly have to put together a project team to help with these decisions.

Miscommunication can happen when speaking with contractors

An increased amount of communication is required between contractors and clients as part of an EPCM execution model. This can lead to risks of miscommunication during the project execution.

Choose the right execution model for your project

Choosing between EPC and EPCM execution models for your project isn’t always easy, but knowing the differences and the advantages and disadvantages of each can go a long way to helping you make an informed decision. Take a look at Pro Support Solutions, and our partners DG-SKID and MEFA to learn more about execution models, cost savings you can make for modular process skids, and how Pro Support Solutions can support modular planning.  

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