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Legal Issues and Best Practices Related to EPC and EPCM Project Administration

OnDemand Webinar (103 minutes)

Gain valuable insight into the use of EPC and EPCM contracts and the associated risks.The engineering, procurement, and construction (EPC) delivery method, commonly known as the turnkey delivery method, has long been the favored delivery method for owners of complex infrastructure, innovative/state of the art manufacturing, power, and renewable energy projects because EPC contracts make the EPC contractor the single point of responsibility for achieving an agreed upon level of performance at a set price, within a set period of time. Huge losses by contractors on EPC projects in recent years, however, have resulted in contractors considering the EPC delivery method the black sheep in the family of construction contracts. The engineering, procurement, and construction management (EPCM) delivery method is more favored by contractors than the EPC delivery method because the EPCM contractor is not directly at risk for the construction of the project with an EPCM contract; rather, the EPCM contractor designs the project and manages the construction on behalf of the owner. Loss of single point responsibility, however, makes the EPCM less attractive to owners because multiple points of responsibility make it difficult to get performance guarantees and can result in the owner getting caught up in disputes between the various contractors. This material will explore the use of EPC and EPCN contracts and the advantages and disadvantages of each delivery method. This information will review several of the provisions commonly found in EPC contracts and ways in which an EPC contractor can contractually control, manage, and reduce its risk under an EPC contract. This topic will also look at variations in the EPC delivery method, including the use of build-operate-transfer contracts and build-own-operate-transfer contracts, which may soften the EPC contractor's risk. This information will provide owners, developers, contractors, subcontractors, engineers, attorneys, and others who have an interest in the EPC and EPCM methods of project delivery with valuable insight into the use of EPC and EPCM contracts and the associated risks with these delivery methods.


Scott D. Cahalan, Smith, Gambrell & Russell, LLP



• Fundamentals of the EPC Delivery Method

• Fundamentals of the EPCM Delivery Method

Use of the EPC/EPCM Delivery Methods

• Advantages

• Disadvantages

EPC Provisions Not Typically in Other Contracts

• Cross-Payment Guarantees

• Firm Price and Schedule

• Mechanical Completion, Start-up, and Commissioning

• Performance Guarantees

Reducing EPC Contractor Risk

• Restrictions on Owner-Initiated Changes

• Limitations of Liability

• Sunset Remedies for Performance Breaches

EPC Variations

• Build-Operate-Transfer (BOT) Contracts

• Build-Own-Operate-Transfer (BOOT) Contracts