EPCM abbreviation question

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krnvs
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Thu 24 May 2012 7:53 pm

I know that EPCM stands for 'Engineering, Procurement, and Construction Management'.
But not sure if the word 'management' relates to letter C only or to all three letters EPC

So, the question is:
Should i think of it as 'The Management of Engineering, Procurement, Construction' ?
Or is it sequence of activities 1.engineering 2.procurement 3.construction management.

Reason why i asking: it seems to me that there's very special vision of 'EPCM' in Russia:
EPCM Contractor executes just the financial part of project (investments, risk management, local authorities coordination) and then dumps the rest of project to Soviet-Style Design-Bureaus (Engineering and Procurement) and then to Building Contractors (Construction) for 30-50 percent of real price of project's award.

...and YES, i'm from Russia
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dhaughey
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Wed 06 Jun 2012 7:56 pm

Hi Krnvs

Welcome to the board.

For me I'd read it as the word management relating to all three areas. As you say the Management of Engineering, Procurement and Construction.

Cheers,
Duncan
krnvs
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Thu 07 Jun 2012 3:50 pm

Thank you.

It's like, EPCM-company just signs a contract with EP-company and C-company (or EPC company) without having their own Engineering and construction employees, while EPC-companies do design and construct it by their own, am i right?

So, all that i've written on Russian EPCM seems familiar to western countries.
I guess there's some 'management' in EPCM that i just can't understand and evaluate due to lack of management skills and knowledge. I'm more into engineering
mikeoakley123
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Thu 19 Sep 2019 12:32 pm

Although the engineering, procurement and construction (EPC) agreement and the engineering, procurement and construction control (EPCM) contract had been present in the production sector for decades, there remains confusion as to the essential variations among these contracts, the function every party is needed to play, and when to apply one agreement over the alternative.

The fundamental distinction is the position of the EPC or EPCM contractor. In an EPC settlement, the EPC contractor develops the undertaking from graduation to final of completion. The owner or principal of the EPC assignment affords the EPC contractor with a detailed design such as technical and useful specs, so as for the EPC contractor to construct and supply the task to the "flip of the key", within a certain term. This is why EPC contracts are often called "turnkey" tasks. The scope of labor should be certainly described within the contract documents; therefore, amendments to the scope of labor must now not be a common function in EPC contracts. For this reason an EPC agreement is often a fixed fee contract or an all-encompassing lump sum contract. Any shortfall of charges is a danger that rests with the EPC contractor, making price manipulate their primary precedence.

A similarly figuring out function of the EPC agreement is that the EPC contractor enters into separate agreements with the contractors, providers, sub-contractors, sub-providers and so forth. This is advantageous to the proprietor or primary of the venture, as they will appearance to the EPC contractor to take complete obligation for the venture and, inside the event of a dispute among the EPC contractor and any birthday party to the sub-agreements, to solve the dispute with out the proprietor or important being required to be a celebration to the dispute. The EPC contractor will, in most cases, have a proper of recourse towards a celebration to a sub-settlement who was answerable for causing the loss or damage. The EPC contractor must make sure that its contracts mirror those who it has with the proprietor of fundamental.

In assessment to the EPC version, the EPCM contractor is not directly worried in the building and creation of the undertaking, however is as an alternative responsible for the unique design and ordinary control of the assignment, on behalf of the owner or essential. While an EPC settlement takes the form of a layout and production agreement, the EPCM model can be seemed as a professional offerings contract.

The EPCM contractor has a responsibility to make sure that the engineering and layout of the assignment is in compliance with the initiatives technical and practical specifications. Supervising, control and co-ordinating production interface in accordance with an in depth agenda is the key duty of the EPCM contractor.

The EPCM contractor is answerable for organising contractual arrangements on behalf of the owner or most important with other contractors, companies, sub-contractors and sub-vendors, through a tender procedure. The EPCM contractor is shrunk by way of the proprietor or foremost for the construction control position, whilst the owner or primary is bound to various contractual relationships for production associated works. From an owner or predominant's attitude, there lies a drawback in being bound to numerous contractual relationships within the occasion of a dispute. Unlike the EPC model, the proprietor or most important will greater often than no longer discover itself concerned in a dispute with one or more of the other parties regarding the construction of the challenge, to whom the EPCM contractor have to provide help.

In maximum instances, the EPCM model is based on the premise of a cost-reimbursable price shape or a unit price price shape. The former permits the EPCM contractor to be paid an in advance sum of money with extra constant monthly bills, at the same time as the latter permits for an upfront amount of money with in addition bills to be made on of entirety of distinctive levels in the production method.

Both the EPC and EPCM contracts may be rather beneficial to a project. Choosing the wrong form of agreement can have a main impact at the price and chance associated with the mission. The agreement you choose to utilise calls for a clear information of the goals, scope of labor, the position of each celebration and the agreement structure as an entire.
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