Definition:
A project delivery method where the owner contracts an EPCM firm to manage and oversee the engineering, procurement, and construction phases, rather than executing them directly.
Key Components:
- Project Management Oversight: EPCM firm provides supervision and coordination.
- Owner Control: Owner retains decision-making authority on key aspects.
- Flexible Contractor Selection: Different contractors can be chosen for each phase.
Use Cases/Industries:
- Oil and Gas: Pipeline construction and refinery projects.
- Renewable Energy: Wind and solar power farm developments.
- Chemical and Industrial Plants: Large-scale manufacturing facilities.
Advantages:
- Greater Owner Control: The project owner remains involved in decision-making.
- Flexible Contracting Strategy: Can select the best contractors for each phase.
- Potential Cost Savings: Reduces contractor risk premiums included in EPC contracts.
Challenges:
- Higher Administrative Burden: Owner must be actively involved in managing contracts.
- Potential for Scope Creep: Requires strong project governance to control costs.
- Slower Decision-Making: More stakeholders involved in approvals and changes.
Related Terms:
Project Management Contract (PMC), EPC, Design-Build
Example:
A petrochemical company uses an EPCM firm to oversee the development of a new processing plant while hiring separate contractors for construction and procurement.
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Synonyms:
Owner-Managed EPC, EPC Advisory, Construction Management at Risk
