A typical process flow diagram for an EPC project. Source: Project Management Institute

The execution phase of industrial projects, such as oil and gas or power projects, consists of detailed engineering, procurement and construction: EPC. The engineering and construction contractor conducts the detailed engineering design of the project, procures all the equipment and materials necessary, and then undertakes construction to deliver a functioning facility or asset to their clients. The EPC, or execution, phase of a project normally follows the Front End Engineering Design (FEED) phase. The FEED is a basic engineering design used as the basis for the EPC phase.

An EPC project typically results in a turnkey facility: at closeout, the EPC contractor hands over a working facility that’s ready to go. This is differentiated from a design-build contract which 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.

Various project and document management tools are available to help the project contractor optimize time, materials and manpower resources while minimizing cost and maximizing value to the client.

Here are some basics of the EPC process.

Project Cost Estimates

The project execution plan drawn up for an EPC contract documents direct costs, which cover detailed design, site investigations, procurement, the contractor’s direct and indirect construction costs, commissioning and start-up and contractor’s overhead and fees. Indirect costs cover project contingency and owner’s costs.

Process Flow Diagrams

Each step involves a flow of information that can be facilitated by a process or an electronic tool. Several tools are available. Electronic tools are becoming more commonplace in engineering and construction and can be useful in tracking quantities. Computer-aided design tools that are used to develop 3D models can often generate quantities of the key materials. When the design information in these models is shared directly with estimating tools, the tracking of quantities and trending of construction cost can be performed very rapidly.

Equipment Specs and Documentation

Document management software can make the volumes of data from large projects accessible to increasingly globalized teams and ensure the data available are processed in a consistent manner that aligns with organizational workflows.

This task covers an array of project components, including electrical diagrams, site layouts, process and instrumentation diagrams, plant heat and mass balances, protection and control equipment, quality assurance records and environmental management plans.

Procurement

In this phase, the contractor is responsible for all procurement and the performance of all vendors. This also entails providing the necessary transport of equipment and materials to the project site and securing all permitting and licensing documents.

Procurement engineers oversee the purchasing of technical goods and services for an industrial operation and should have very detailed knowledge of the equipment, materials and supplies used in a particular industry. They evaluate suppliers and negotiate purchase agreements with them, as well as maintain the inventory of supplies.

Construction

The contractor is responsible for the performance of all construction services and activities required for the timely scheduled completion of the project including furnishing the management, qualified and skilled labor, equipment, tools, consumables, spare parts, temporary facilities and necessary utilities.

A significant benefit of EPC contracts is that it allows the owner to engage with just one contractor, who will, in turn, manage all the relationships with subcontractors. For owners of projects, such arrangements allow them to manage risk more effectively while allowing contractors to allocate and specialize in the work they undertake.