Select The Best Contractor By Understanding The EPC Project Phase

January 6, 2023
Front-end Planning
Detail Engineering & Design
Fabrication & Construction
Safety & Quality

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When selecting an EPC contractor, it is important to understand the fundamentals that go into each of the EPC project phases. This information can help you determine whether or not a contractor is well-suited for the full scope of your needs. The best way to understand the EPC project phases is by breaking down each section.

EPC Project Phases: What Is EPC?

EPC stands for engineering, procurement, and construction. EPC is a delivery method in which a single EPC company works under a single contract with a project owner, providing all design and construction services. The early and frequent collaboration between estimating, engineering, procurement, and construction teams is a key defining factor of this method. 

Front End Planning for EPC Projects 

Front-end loading (FEL), also known as front-end planning (FEP), is an important process that needs to take place prior to the EPC project phases as it helps establish a robust scope definition, budget, and timeline while identifying risks.

The FEL process consists of three distinct phases (FEL 1, FEL 2, FEL 3/FEED) and is used to develop engineering packages, evaluate design options, improve safety outcomes, support internal funding approval processes, and provide a framework to be referenced against each project phase.

It is important to dedicate time to the FEL stage as a way to assess and evaluate the overall constructability of a capital project. With the goal of utilizing as much knowledge up front as possible, the planning of EPC projects should be construction-driven so that is is design effecitvely front the get go. 

EPC Project Phases: Engineering

In an EPC project, engineering is the first step within the E, P, and C phases. In the project phases, engineering is often referred to as the detail (detailed) engineering and design phase. 

Before the EPC contractor starts the detail engineering and design phase, it is important that all parameters of scope are as clearly defined as possible. This includes a schedule and budget that is agreed upon by all the involved parties. During the engineering phase, all departments and disciplines work together to determine and produce the optimal design for overall project success. They should work to develop a design that balances budget and efficiency. 

Having project controls in place early in the engineering and design stage to identify and track quantities for design will decrease the potential for future construction cost overruns. 3D laser scanning is another important service that can be utilized during the engineering stage to determine the level of accuracy and detail of a plant's design.

After they have flushed the design out, the contractor’s engineering team provides a set of discipline drawings that the construction phase will use. Disciplines often include civil/structural, piping, mechanical, instrumentation/electrical/controls (IEC), and any other specialty services required for the scope. These engineering disciplines will provide a clear understanding of what engineering can deliver regarding the project schedule and the procurement management plan. 

The Best Detail Engineering and Design Practices:

  • Incorporate a well-established change management work process as part of the execution plan
  • Utilize a baseline project scope that includes: 
  • Piping and Instrumentation Diagrams (P&IDs)
  • Equipment Selection and Quantity
  • Equipment Layout
  • Identify potential changes as soon as possible
  • Ensure proper communication and alignment surrounding the change credibility and project impact with robust identification and capture culture

When selecting a contractor for your EPC capital project, it’s crucial to identify the contractors with a strong engineering department. Flushing out the designs by utilizing important disciplines can prevent possible rework later, therefore preventing possible budget stretches and timeline pushback. At H+M Industrial EPC, we provide in-house technical advisory services as part of the overall front-end engineering and design package. Our experts review and provide oversight of all design aspects, collecting and prioritizing project needs and challenges while developing and optimizing concepts to meet your needs and drive your capital project to successful execution.

EPC Project Phases: Procurement

Procurement is the second part of EPC and one that has the potential to be overlooked. Procurement is a complicated and highly detailed process that involves all sourcing, purchasing, and inspecting of products, materials, services, and equipment required for construction. The EPC contractor’s procurement team should be involved from the beginning of the project to develop a detailed and strategic procurement management plan. This plan creates the framework and timeline for a strategic procurement schedule that ensures on-time deliveries to help maintain construction timelines.

When selecting a contractor, it’s important to understand that contractors can streamline procurement with automation technology. Contractors can incorporate Barcoding and Radio Frequency Identification (RFID) to streamline inventory management and control. Intermodal Warehouse Systems (IWS), can help material shipments from global sources by simplifying the procedures for loading, transporting, and unloading materials and equipment. Utilizing these technologies can improve costs and simplify the procurement processes for reaching deadlines faster.

The Best Procurement Practices:

  • Create timelines for item purchases and deliveries that include the providers' location
  • Identify critical procurement milestones and implement into timeline as soon as possible
  • Organize and prioritize procurement activities at a commodity level 
  • Give full transparency to all the involved parties

Oftentimes, procurement takes place within a fabrication shop, but unfortunately, not every contractor has a fabrication shop they can utilize during capital projects. Therefore, working with an EPC contractor who can perform procurement and fabrication in-house is beneficial. This helps with maintaining the cohesive workflow and communication stream, as well as provides greater schedule certainty. It’s also important for resolving issues in-house rather than trying to fix a large issue in the field. H+M Industrial has the experience and in-house capabilities necessary to provide the best equipment and procurement services possible for your capital projects.

EPC Project Phases: Construction

Construction is the last phase of the EPC project phases and a necessary step for overall project success. This is where the construction team comes together to fulfill the predetermined deadlines and goals per the scope of the project for building. With strategic planning and cross-department communication, the construction team may complete construction of various project components while work packages are still in the engineering and design or fabrication phases of the project. 

During this phase constructability will be of vital importance and where you can spot if it was incorporated early on. Constructability refers to the idea of optimally and strategically utilizing construction knowledge and experience in the earlier phases of a capital project, including during front-end planning, detail engineering and design, and procurement, to achieve project requirements and objectives. These are some constructability practices that will need to be taken into consideration pertaining to the project characteristics.

Mechanical Constructability:

  • Review the mechanical equipment and how they are to be installed in the final design

Piping Constructability

  • Review how the new pipe will be installed in new or existing pipe racks.

Electrical Constructability

  • Review the listing and installation of the transformers, substation, and moto control center to ensure they can be lifted safely and placed into their final position.

Civil Constructability

  • Review the Cut and Fill design to minimize overall project costs for construction by reducing required construction hours.

Structural Constructability

  • Review the structural buildings and pipe rack layouts to provide crane access for equipment installation in the structural building and pipe installation in the pipe racks.

Instrumentation Constructability

  • Modify the structural steel and pipe racks to allow for the extraction/installation of large instrumentation. 

Fire Protection Constructability

  • Locate fire monitors and fire and gas detectors to ensure crane access is not blocked but safety and functionality are still maintained.

While deliverables in construction will depend on the unique components of the project, System-Based Execution and Completion is a common deliverable seen within constructability. System-based execution refers to completing the work by system as opposed to by area. All projects start with area execution, and at approximately 75-80% construction completion, the approach shifts to a system-based completion (e.g. completing the nitrogen system, the fuel gas system, etc.). 

The Best Construction Practices:

  • Ensure that there is an alignment between the contractor and project owner.
  • Communicate consistently and regularly.
  • Maintain detailed documentation of the change.
  • Incorporate appropriate change criteria while assessing both cost and schedule impacts.

When selecting a contractor for an EPC project, ensure that they utilize constructability. This will help mitigate risks like rework during the construction phase. As a leading Texas-based industrial construction company, H+M Industrial EPC works to ensure the specifications and characteristics of your capital project stay on track with our detailed planning and constructability practices.

H+M Industrial: The Best EPC Contractor For Your Project

Understanding the breakdown of the EPC project phases and best practices within each phase can help you determine the best fit for your project by searching out contractors that follow these procedures and techniques. Between strong engineering departments, in-house procurement, and constructability procedures, H+M Industrial EPC has the experience necessary to maintain your project's deadlines and meet its unique requirements. H+M also holds the award for ‘Best in Class’ from the 35th Annual Houston Safety Excellence Awards.

About the Author

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The H+M Industrial Team

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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