EPC vs. EPCM Projects: Understanding Execution Models

September 23, 2021
Front-end Planning
Detail Engineering & Design
Procurement
Fabrication & Construction
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Capital project delivery systems aim to leverage the expertise and capabilities of stakeholders to minimize schedule risk, cost, or liability. The Engineering, Procurement, and Construction (EPC) and Engineering, Procurement, and Construction Management (EPCM) project delivery methods apply the integration and experience of engineering and procurement team members to enhance constructability. However, the implementation methods of these two models slightly differ. 

Let's examine the differences between EPC vs. EPCM project delivery methods by exploring the potential benefits and risks associated with each method and how both methods can help ensure capital project success. The comparison table below outlines the fundamentals of both EPC and EPCM models at each stage of the project lifecycle. 

EPC vs. EPCM Project Fundamentals Comparison
Project Fundamentals EPC Model EPCM Model
Engineering All engineering is completed by a single contractor All engineering is completed by a single contractor
Procurement All procurement is performed by a single contractor All procurement is performed by a single contractor
Construction All construction is done by a single contractor The owner has greater control over construction arrangements, and multiple contractors may be involved
Risk The contractor assumes more risk as the single point of accountability  The owner assumes more risk due to the added layer of complexity of having multiple providers
Control The contractor has greater control over project execution through department integration The owner has greater control over project execution by minimizing single-point failures

Differences Between EPC vs. EPCM Projects

When deciding between EPC vs. EPCM projects, consider who will be in charge of executing each project stage. In EPC delivery, the contracting company handles all front-end engineering (which may occur before the EPC contract is signed), detail design, procurement, and construction services. The EPC contractor also selects its own vendors and subcontractors for different project stages. This is often referred to as a turnkey contract.

In an EPCM delivery, the contractor is responsible for providing engineering and procurement services, but various arrangements are possible for the construction phase. The project owner has the flexibility to hire another contractor to perform the construction and assign their EPCM contractor to manage them. Alternatively, the EPCM contractor can hire and manage an outside construction contractor on their own. The EPCM delivery has the potential to give the owner more control over the project's construction while allowing the project to benefit from the EPCM contractor's expertise and experience in engineering and procurement.

Below, we’ve detailed some of the key aspects of both delivery methods.

Key Aspects of EPC and EPCM in Capital Projects

One of the most significant advantages of utilizing an EPCM delivery method is that the project owner retains more control of the project and minimizes single-point failures that can occur when hiring only one company. This delivery methods allow the owner to choose which contractors and subcontractors will execute different project requirements. Conversely, utilizing the EPC delivery method in a capital project can enhance integration across project departments while providing a single source of accountability from engineering to construction. 

We’ve crafted the following table to illustrate how several key aspects of EPC and EPCM delivery methods differ and how each approach contains advantages as well as risks.

Key Aspect EPC Delivery Method EPCM Delivery Method
Project Control The owner hands control over the project to the EPC contractor The owner retains control over the project, can choose contractors and subcontractors
Integration and Accountability A single source of accountability from engineering to construction Multiple service providers and separate contracts add complexity and responsibility
Scope Risk can emerge from undefined scope Undefined scope can cause issues throughout project execution

EPC vs. EPCM vs. Design-Bid-Build

When considering different project delivery methods, the Design-Bid-Build (DBB) contract is often the most common point of comparison between EPC and EPCM. While DBB often places the engineering and procurement responsibility on one party, its gated system can lead to weaker integration between the engineering and procurement contractor and the construction team. This, in turn, can increase the potential for change orders and schedule inflation—ultimately impacting the project's cost and timeline.

Despite this, DBB remains popular because it can provide pricing at each stage of the project, a feature that is often desired, especially for smaller projects. Additionally, the more segmented nature of DBB can lead to increased transparency in contracts, allowing for a clearer understanding of project requirements and expectations. 

Selecting an EPC/EPCM Contractor for Your Needs

The main advantage of EPC and EPCM project delivery methods is their ability to deliver the desired outcomes within tight timelines. EPC contractors with in-house construction teams are particularly adept at quickly creating a realistic schedule and cost forecast based on previous experience. Even when the EPC contractor is hired for a construction management role, their understanding of process density can help minimize schedule overruns, and they can identify potential safety risks for any external contractors.

Even capital project owners who have already been through a myriad of DBB project deliveries can benefit from working with an EPC contractor. The increased capability is especially important in projects where long lead times for critical components are expected and schedule delays are not an option. 

It's important to understand the benefits and risks associated with both EPC and EPCM project deliveries. It's important to work with an experienced and reputable EPC/EPCM contractor with a proven track record of successfully delivering projects on time and within budget.

H+M Industrial EPC specializes in providing exceptional capital project execution from concept to start-up. For more than 35 years, we have provided end-to-end solutions for a wide range of project sizes within the energy, chemical, and terminals and logistics industries.

Our comprehensive services, including front-end planning, detail engineering and design, procurement, fabrication, and construction, allow us to take your project from conception to completion, tailoring engineering and design solutions to meet your unique needs.

About the Author

Want to Learn More About Project Management?

For more information about EPC vs. EPCM project delivery methods and how H+M Industrial EPC can deliver your project on schedule and within budget, contact us today.

To find out more about the advantages and disadvantages of turnkey projects and how H+M Industrial EPC can meet your capital project needs, contact us through our website today.

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For over three decades, we have provided best-in-class capital project management services to Energy and Chemical industries through our proven EPC approach. We are dedicated to providing trust, experience, and efficiency through all stages of engineering, procurement, and construction--on budget and on time.

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