Overcoming Fear of the Engineer-Procure-Construct (EPC) Model to Recognize Project Execution Benefits

One method gaining traction is the engineer-procure-construct (EPC) model. However, despite its growing popularity, some decision-makers remain hesitant to fully embrace EPC. This hesitation often stems from concerns over perceived loss of control, the idea of entrusting all project components to one contractor and a fear of "putting all the eggs in one basket." But these concerns can overlook the key advantages that EPC offers. When done correctly, EPC can be the most efficient and effective option for project success.

Here are some reasons why EPC can provide the key to streamlined, cost-efficient and successful project delivery.

1. Schedule Compression

In traditional project delivery methods, such as design-bid-build, project timelines can stretch due to the sequential nature of the process. Design work must be completed before bids for construction and materials can be solicited, and each of these steps often introduces delays.

However, EPC projects are structured differently.

Under an EPC contract, all construction and material vendors are assembled during the project proposal stage. This allows for cross-discipline discussions, integrated planning and upfront risk assessments right from day one. Because all parties are involved from the start, EPC projects benefit from early efficiencies, as teams can address issues together and make adjustments before significant work begins. This results in accelerated timelines, where construction can begin sooner and progress more smoothly.

2. Cost Certainty

Time and cost are inherently linked in any project, and EPC can offer significant advantages when it comes to cost certainty. When companies use a traditional approach, project costs often remain unknown until the design is finalized and bids from contractors are received. During this time, market conditions may change, leading to price increases in materials or labor.

With an EPC contract, manufacturers can lock in a firm, lump-sum price at the time of contract signing. This provides greater financial clarity early in the project lifecycle, allowing for easier capital planning and forecasting. Experienced EPC contractors bring their own efficiencies to projects, which can help control costs. For manufacturers facing tight budgets, knowing the full cost of a project upfront can alleviate financial concerns and make for more accurate long-term planning.

3. Flexible Levels of Involvement

Different manufacturing companies may have varying comfort levels regarding their team’s level of involvement in a project. Some managers prefer a hands-on approach, while others are more comfortable delegating the entire project scope to an external team.

EPC contracts allow for flexibility in terms of involvement. Because the prime contractor typically oversees the entire project, decision-makers can choose to refocus their internal resources on other priorities or they can stay involved in the day-to-day details. This flexibility gives owners control over where they allocate their personnel, allowing them to either step back or remain engaged as much as they prefer.

4. One Contract, One Contact

One of the primary benefits of the EPC model is its streamlined approach to contracting. Under traditional methods, a manufacturer may need to negotiate separate contracts for various aspects of the project—engineering, surveying, grounding, construction, testing and materials. Each of these contracts comes with its own terms, schedules and costs, which can make coordination cumbersome and lead to inefficiencies.

In an EPC contract, all of these elements are managed by the prime contractor. This means the owner only needs to negotiate and manage one contract, drastically simplifying the process. Additionally, the EPC provider typically assigns a single point of contact to handle communication between the owner and the various subcontractors and vendors. This not only saves time but allows the owner to focus on other critical business functions, knowing the details are being managed by an experienced partner.

5. Building Long-Term Relationships

Another often overlooked benefit of EPC contracting is the opportunity to build new relationships. While this can provide a level of comfort and predictability, it can also limit opportunities for innovation and growth.

When an EPC contractor is selected, they bring their own established processes and relationships with vendors. This opens the door for the owner to learn from best practices in the EPC world and from new partners they may never have worked with before. These relationships can provide long-term benefits that extend beyond the completion of the current project, fostering partnerships that may be beneficial in future endeavors.

As the pharma manufacturing industry continues to evolve, finding more efficient methods for delivering critical infrastructure projects is essential. While some owners may still be hesitant to fully embrace EPC, the benefits of this model are becoming increasingly clear. By offering schedule compression, cost certainty, flexibility and streamlined communication, EPC provides a powerful solution for delivering projects efficiently and effectively.