Cost and Variation Management in EPC Contract SIN116

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1、CostandVariationManagementinEPCContractsMrChristopherChuahPartnerInfrastructure,Projects&ConstructionEngineering,Procurements&ConstructioncontractsTheEPCContract–GeneralOverview–Initsmostextremeform,maybereferredtoasaTurnkeycontract•Placesalldesignandconstructionresponsibilityonthecontractor•Red

2、ucedinvolvementandinterventionbytheEmployer•Noneedtoidentifypartytoattributeliabilityfordefectasresponsibilityforscopeofworksverybroadandwillfallonthecontractor•AttractivetoEmployersasitpreservescontractorliability•Maybeadditionalbenefitofefficiencyinthedesignandconstructionprocesstoachievefaste

3、rcompletiontimeandreductioninthepriceoftheproject–Contractorwouldrequirebroadrangeofexperienceacrossdifferentindustries•Fore.g.,wherethescopeofworksencompassescivilandstructuralworks,specializedM&Eworksetc.2Engineering,Procurements&ConstructioncontractsTheEPCContract–ImportanceofTenderProcess–Th

4、eRequestforTendertakesongreaterimportancethanintraditionalconstructioncontract•Minimal/noopportunityfortheEmployeroritsConsultanttoamplifyordevelopthedesignaftercallforandsubmissionoftender•Employertostateinprecisionanddetailitsrequirementsintermsofcapacitiesandperformancerequiredoftheworks•Empl

5、oyertoinvestgreaterresourcesattenderreviewtoensurethattheContractor’sproposeddesignmeetstheEmployer’srequirementsandareoftherequisitequality•ContractoralsotoinvestgreaterresourcesintenderpreparationasitisresponsibleforbuildabilityoftheProject•Maybenecessarytocarryoutpre-qualificationduediligence

6、toascertainthatthecontractorsarecompetentandcapableofperformancethecontract3Engineering,Procurements&ConstructioncontractsTheEPCContract–Pre-tenderconsiderations–DeterminationofextentofroleoftheEmployer/Consultant(A)Leastinvolved(B)Moderate(C)Mostinvolved(A)Minimalinvolvement:Employeronlytoturnt

7、hekeyaftercompletiontocommenceoperationoftheconstructedfacility.(B)Moderateinvolvement:Employer/ConsultanttosuperviseContractor’sworksandissueinstructionsorrequestforproposals(C)Mostinvolved/Semi-Turnkey:Combinationofturnkey