Differences between EPC and design-build delivery

source : https://www.lexology.com/library/detail.aspx?g=7e8d69d7-b936-4891-aab8-d69690c3cc71

EPC (Engineer-Procure-Construct) and Design-Build have both existed as mainstream delivery methods for decades, but what’s the difference between the two? If anything, they seem to share critical similarities. In both cases, the owner has a single point of contact on the construction side. In both cases, the contractor is responsible for the design. In both cases, the contractor takes on more risk than a traditional design-bid-build delivery. But several key (if sometimes subtle) differences differentiate the two:

1. An EPC project typically results in a turnkey facility. At closeout, the EPC contractor hands over a working facility that’s ready to go. A design-build contract closes out similarly to design-bid-build contracts, with the owner and its construction manager or designer taking an active role in punching out the facility.
2. EPC contractors are often handed little more than performance requirements (output levels, uptime levels, maintenance expense maximums, etc.), whereas most design-build contracts provide at least some design detail in the bridging documents.
3. There is no EPC equivalent of the “design-assist” or “fast-track” design-build processes. Once again, this reflects the owner’s more minimal involvement in the EPC design process.
4. Many contracts transfer far more risk to the contractor in an EPC delivery. Design-build contracts tend to take either a traditional design-bid-build approach to unknowns like hidden site conditions, or to share that risk between the owner and the design-builder. In contrast, it’s not uncommon for EPC contracts to shift these risks entirely to the EPC contractor.

Understanding the differences between these two seemingly quite similar design processes is a key step when assessing which delivery system is right for your project.

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source : http://www.onealinc.com/project-delivery-methods.php

Engineer-Procure-Construct

The Engineer-Procure-Construct (EPC) project delivery method has emerged as a preferred choice for many industries and is starting to gain favor in the manufacturing industry. With an EPC contract, the owner has a single point of contact for the project. Under this model, the EPC firm handles the design, procurement of all equipment and construction materials, and construction services for turnkey delivery of the facility, usually at a lump-sum price. Typical EPC firms have all the required resources in-house to ensure efficient and effective communication throughout the project. The EPC process starts with a preconstruction effort that involves some preliminary planning and engineering to define the scope, schedule, and costs of the project. The preconstruction effort can be completed for approximately 1% to 3% of the TIC. Validation is most often managed directly by the client or through a separate validation firm to ensure this critical activity is successfully delivered. EPC firms knowledgeable in manufacturing facilities should be able to work with the owners to develop a validation master plan at the onset of the project and incorporate the plan into the project estimate, schedule, and quality control. The EPC firm has complete responsibility for the project from start to finish.

Project scope and estimates are developed by the EPC firm. The project schedule and project budget are known before the project enters detail design or construction phases. All design and construction scope and budget risks are passed to the contractor. EPC project delivery offers the tightest integration of activities during the construction process through a structured and disciplined approach. In addition, communication among the design, procurement, and construction teams begins immediately.

The EPC model helps align team members for optimal project performance. This often results in a collaborative, value-based construction process. EPC delivery is typically used for process or equipment driven projects. The EPC model reduces project risks for the owner, delivers predictable results, and maximizes the effectiveness of capital planning.

Design-Build

The Design-Build (DB) project delivery model is best suited for manufacturing clients that require fast-track project delivery and want a single point of contact for the project. The contractor and designers are hired by the owner to deliver a complete project. This model has been used extensively in the manufacturing industry for manufacturing, warehouses, and offices.

The owner selects a DB firm from pre-qualified companies that have submitted designs and prices based on the project requirements. The DB firms retain their own architects, engineers, and other consultants. The selection criteria are based on a combination of factors, including design, price, schedule, and team. The DB firm selected by the owner is typically responsible for preparing the estimate and scope, as well as producing all construction drawings, details, and specifications. The owner may provide the user requirement specifications, materials of construction, and the specifications for the manufacturing equipment. The owner may contract with a third party for validation, commissioning, and qualification. DB contracts are typically lump sum and based on the design that accurately meets the owner's requirements. The owner may be given a guaranteed maximum price based on the defined requirements.

DB is utilized to reduce the project delivery schedule. DB is typically used for architecturally-driven projects. The DB concept typically results in enhanced communication among the project team and a higher degree of accountability. While this is a complex delivery method, the compressed schedule and value engineering approach often result in cost savings for the owner. The DB approach is well-suited for larger, less complicated, time-sensitive projects where the owner has a clear project definition and concept prior to soliciting bids and desires a firm price to be confirmed early in the process.