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BEST PRACTICES

the same situations: The list below is not a complete dustry as well. Under certain situations, it makes bet-
list of differences between EPC and EPCM contracts ter sense to use this type of construction contracting
but it does address many of the major contractual dif- than other methods.
ferences. The way each of these issues is handled
can be modifi ed during contract negotiations to suit
the situation and overall goals of the project. EPC Advantages
EPC and EPCM contracting are both very prevalent - One Stop Shopping “One point of Contact”
types of contracts within the construction industry. - “Hands off” approach to project
Dependent on the level of risk the Owner of a project - Minimal Staffi ng Requirements
is willing to accept, budget constraints, and the Ow- - Minimal Legal Risk
ner’s organization core competencies, will determine - Best for well-defi ned projects with Detailed Engine-
which method is best for their project. ering Complete before EPC Contractor selected (Mi-
EPC contracting tends to be more expensive, to the nimal Unknowns).
Owner, due to the shift of project risk away from the
Owner and to the EPC Contractor. On average, a These contract methods can
project’s cost 10% - 20% more using EPC style of
contracting than a project using the EPCM style of be tailored to the individual
contracting. This is due in large part to the project’s “projects / owner’s needs.
risk being more evenly distributed between the Owner Each company must decide for
and contracts / suppliers.
Construction contracting trends have been leaning themselves as to which method
towards the EPCM style of contracting and away of construction contracting is
from EPC contracting for several reasons but both best for their particular project
methods have their place in business today.
and situation
EPCM Advantages As stated before, these construction contract me-
- Lower Overall Cost thods can be tailored to the individual projects /
- Staff’s Sense of Ownership owner’s needs. Some companies can go as far as
- More Control over Process breaking up each portion of the EPC / EPCM (En-
- Better for less defi ned projects with anticipated gineering, Procurement, Construction / Construction
changes to scope of supply Management) to separate companies. One company
- Less Legal Litigation (Identify issues early and reme- can do the engineering; another can do the procu-
dy situation before larger problems arise) rement, while still another can do the construction /
- Owner’s Financing Flexibility project management).
These are just a few of the advantages of EPCM style Each company must decide for themselves, with the
of construction contracting. advice of legal and fi nancial counsels, as to which
method of construction contracting is best for their
EPC contracting has it place in the construction in- particular project and situation.

Massimo Rebecchi

Massimo Rebecchi is graduated in Civil Geotechnical Engineering. He he has achieved PhD in Minerals and Petro-
leum Engineering in the United States. For years he was freelance professional as Mud Logger and Drilling Project
Manager. He attended important construction projects under CCC-Sicon Oil group.
As a GE consultant in Nuovo Pignone since 2010, he attended several strategic Projects. During this experience he
established Xylem srl in Milan. As President and Managing Director he satisfi ed the Opertions, Project and Quality
requirements of several Main Contractors.
Today Xylem is a Lead Business Consultant Company in Industrial Construction (Oil, Gas, Process, Mills, Rail) for
Operations, Project Management and Sourcing Quality Management located in Italy, Emirates, France and Algeria.

Le basi per creare una società di costruzione di impianti complessi

Xylem presenta una serie di articoli che descrivono i principali elementi del processo di costruzione di impianti
complessi. Sono indicazioni ricavate da esperienze dirette, da avere vissuto le esperienze di tutti i dipartimenti e aver
partecipato alla loro armonizzazione.
Dalla scelta del modo con cui proporsi ai progetti, al modo con cui affrontare i tender, le negoziazioni dei bond, la
gestione del procurement, gli standard di contracting, fi no alla ricerca e gestione delle HR trasversale a tutte le attività,
le attività di ingegneria di base e di dettaglio, il feed, la qualità, le attività di commissioning e il claim: sono discipline
che hanno ciascuna le proprie particolarità, che spesso sono sconosciuti a chi non è inserito in questi meccanismi.
Non ultimo è importante affrontare i temi di sicurezza di area, delle posizioni di dominio dei contractors e le pressioni
esercitate sui governi.
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