EPC Contractors- Understanding Their Work and Responsibilities


EPC contractors are traditionally those people who handle a single or multiple EPC contracts. Efficient project handling along with organized arrangement of control measures is some of the key responsibilities of an EPC contractor. Maximizing production output while minimizing defects in production and quality are the two main goals of an EPC contractor. As a part of the EPC contractor, EPC contractors confirm to deliver EPC. EPC is a popular method of handling contracting projects in the vast construction industry. As an EPC contractor, he has to design the installation procedure, obtain the required raw materials to build the project in hand. EPC contractors accomplish this task either by handling it all by themselves or outsourcing some part of the work to an outside contracting firm. EPC contractors may also subject the contract to a risk of budget and schedule in exchange of a pre-determined price. This is termed as a lump sum or even LSTK based on the mutually agreed amount of work.

EPC contracts are generally those where EPC contractors have to be in charge of almost every process associated with the contractual work. If there is a price variation at any phase of the contractual project, both parties involved in the contract face major risks, however, EPC contractors are at a bigger risk of incurring losses. Any EPC contract is a highly complicated process since it involves too many players like consultants, M & E technicians, designers as well as sub-contractors. Due to the global nature of some EPC contracts, they are subjected to several cost variations due to the volatile global economy. An efficient EPC contractor should be well-skilled to handle price fluctuations that arise at any stage of the contract work execution and also look after changes in labor and material costs owing to the corresponding change in the project location.

After signing an EPC contract, the EPC contractor automatically becomes responsible for ensuring the contract project is completed on time and all tender conditions are adhered to during its executions. EPC contractors often hire the services of sub-vendors of sub-contractors who accomplish different tasks associated with the project execution. However, while hiring a new sub-contractor, the EPC contractor needs to ensure that the costs do not escalate beyond the stipulated budget. Many EPC contractors have now acquired Six Sigma training to enhance their performance in the construction industry.

Engineering, Procurement and Construction is abbreviated for EPC and today the term has evolved to EPCM which stands for Engineering, Procurement and Construction Management. As the competition among different companies heats up globally, engineering firms become even more aggressive seeing the increasing for superior quality at lower rates. Engineering firms have to constantly improvise so as to make optimum utilization of available resources and efficient handling of projects.


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