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.
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.
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.
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.
Partnering with H+M Modular
H+M Modular, a division of H+M Industrial EPC, specializes in custom fabricated equipment, modules, and skids for energy and chemical industries. The approach emphasizes the potential for decreased risk through more controlled fabrication, leading to enhanced quality and safety, reduced labor costs and construction times, improved labor availability, and solutions to geographic challenges. We are dedicated to providing trust, experience, and efficiency through all stages of traditional and modular construction projects using our proven EPFC approach, If you're considering modular fabrication, we invite you to connect with us to learn about how modular solutions can improve project outcomes.
