Definition:
A comprehensive project execution model where a single contractor manages engineering services, procurement of materials, and construction activities, delivering a complete facility to the owner.
Key Components:
- Engineering: Designing the project’s technical aspects.
- Procurement: Sourcing and purchasing necessary materials and equipment.
- Construction: Building the facility as per the engineered designs.
Use Cases/Industries:
- Oil and Gas: Refineries, pipelines.
- Power Generation: Thermal power plants, hydroelectric dams.
Advantages:
- Single Point of Responsibility: Simplifies communication and accountability.
- Fixed Completion Date and Cost: Provides financial and scheduling certainty.
Challenges:
- Higher Initial Costs: Contractors may include risk premiums.
- Limited Flexibility: Changes after project commencement can be costly.
Related Terms:
Lump Sum Turnkey (LSTK), Design-Build
Example:
An energy company contracts an EPC firm to develop a new natural gas processing plant, entrusting them with the design, procurement of equipment, and construction, ensuring the plant is operational by a specified date and within the agreed budget.
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Synonyms:
Turnkey Delivery, Full-Service Contracting
