EPCM 1

[mariadeluca]

Can someone please explain what a construction manager does under an EPCM contract? Is it like a project management contract or do they prepare the process design?

 

[Ashereng]

A construction manager is in charge of "building" your project's site.

The position would oversee things such as:
- line up the required resources, including inspectors, labour, trades, supplies, buildings, temporary power/light/air/water/honeywagon/etc
- scheduling
- making sure the scope of work is done (QA/QC)
- signing off on the invoices
- hring and firing site labour
- site health and safety
- adhearance to all applicable laws, codes, acts, etc
- Friday BBQ


"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
Have you read FAQ731-376 to make the best use of Eng-Tips Forums?

 

[sdz]

Engineering
Purchasing
Construction Management

 

[0707]

For more on this subject go to thread768-148551

Definition EPCm or EPC

For me, he makes Engineering Procurement Management Construction and also Coordination under the owner’s behalf for a big project such as a new construction or a revamping or a big turnaround.

luis marques

 

[GregLamberson]

mariadeluca

To reiterate some of the above posts - the Construction Manager under an EPCM contract will provide some key inputs early in the project, such as:

- constructability input at FEED & detail design
- input for project risk assessments
- assuring that engineering schedule & deliverables are in accordance with the const installation sequence and is fed to procurement
- assuring that procurement activities support const installation sequences and required on site dates
- will have key input during the tender evaluation phase as far as technical capabilities of the contractors

The role after construction contract award is pretty straightforward as described by Ashereng, but where the real value comes in is early in the project life, even during the conceptual phase - therefore find a good one and get him on board very early.

Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:

http://www.oil-gas-consulting.com

 

[mariadeluca]

Thank you for this. In these circumstances then, where the EPCM Contractor does no construction and is responsible for both the FEED and the detailed design, is he like a trade contractor in that capacity? ie Can the EPCM Contractor also be a trade contractor? He would undoubtedly be responsible for certification of payments to the trade contractors...so i dont see how he could also be a trade contractor but if he is also responsible for a 'package' of work ie design, then how is he different to a trade contractor in that capacity (leaving aside the other roles he does)???

 

[GregLamberson]

mariadeluca

Regarding my input above, it was prefaced on a contract awarded to a comapny to do the Engineering, Procurement & Construction Management. Normally under this scenario, the contractor would also be involved in preparing the tender documents for the construciton contract and asssiting the Owner team in doing the evaluations.

This would be a large services type contractor, like Bechtel, Fluor, Technip, etc.

That all being said, the roles & responsibilities for the EPCM contractor will be spelled out specifically under the Owner's contracting strategy, which is going to vary with the Owner teams (philosophies), location of project, risks associated, schedule, etc.

Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:

http://www.oil-gas-consulting.com

 

[mariadeluca]

yes, but i guess what i am asking is with EPCM, can the EPCM contractor also supply a package of the workx ie one of the trade packages or would that not happen? Have you seen the "EP" and the "CM" done under different contracts with different parties?

 

[GregLamberson]

mariadeluca

There are many variations in the contracting, and yes I have seen EP contracts issued and CM separately. Owner companies will also occasionally contract out the E & P (while keeping some of the major items such as pipe for themselves to purchase and eliminating the mark up) and do the CM themselves.

As in any thing, there are trade offs, advantages & disadvantages of whatever variation is selected.

In most cases, and it is up to the Owner, the EPCM contractor is typically precluded from tendering on the construction portion of the contract due simply to eliminating any conflict of interests.

Also typical is to preclude the FEED contractor from tendering on the EPC or EPCM contracts.

Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:

http://www.oil-gas-consulting.com

 

[GregLamberson]

mariadeluca

There are many variations. But yes, I have seen EP contracts awarded and the CM to another company. It is typical to preclude the EPCM contractor from also tendering on the construction portion.

It is all up to the Owner, I have seen them issue EP contracts and then do the CM themselves. Sometimes they will issue separate E & P contracts and then do the CM themselves. Many times they will keep a portion of the P scope to themsleves, typically line pipe or other long lead, high dollar (non-engineered) equipment.

Also, typically the FEED contractor is precluded from tendering on the EPC or EPCM contract.

Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:

http://www.oil-gas-consulting.com

 

[GregLamberson]

All - sorry for the double post - I submitted the 1st and it seemed to get lost and I tried to re-create it and ended up posting both of them - I hate when that happens!!

Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:

http://www.oil-gas-consulting.com

 

[mariadeluca]

why would the FEED contractor be precluded from tendering for the EPC or the EPCM? Wouldnt it be better from the owner's point of view to have the same contractor doing the FEED to also do the construction? i thought some EPC contractors also do the FEED and that owners would want that so that there is one person responsible for the project if the FEED has an error or does not meet the required performance output?

 

[GregLamberson]

Well yes & no. On the surface it would make perfect sense, however, there are some unscrupulous folks who might slant the FEED to give themselves a better shot at the EPC contract, i.e. if they have a proprietary process or other technical advantage they could have the opportunity of making the FEED tailored for themselves rather than looking at what's in the best interests of the Owner.

As far as continuity, again, it seems rational, but generally the argument is that if the FEED contractor also does the E portion, it will not do so with a fresh set of eyes and hence that although some continuity may be gained, fresh thoughts and ideas may also be lost. It's harder to look objectively at cost saving opportunities when you yourself have developed the concept and the early design/engineering.

The above are not hard and fast rules, but only typicals. Owner's are certainly free to develop & imnplement contracting strategies they feel are in their own best interests.

Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:

http://www.oil-gas-consulting.com

 

[mariadeluca]

Hi Greg,
Your replies have been invaluable. Do you present any seminars on this topic or can you refer me to materials/articles on this form of contracting and say, how it compares to traditional construction management?

 

[GregLamberson]

mariadeluca

I do on occasion. If you look at my website there is some general informaiton there. I also work with companies in developing contracting strategies to deal effectivley with their projects & situations - all are a little (or allot) different.

Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:

http://www.oil-gas-consulting.com