Types of Contract
EPC stands for Engineering, Procurement and Construction whereas PMC stands for Project Management Consultant.
Each is a unique form of contract and is between two parties e.g client and contractor.
In EPC type of contract, contractor is responsible for performing all deliverable as per the contract document including complete
engineering of the project, procurement of all necessary services for the completion of project work as per standard specification and
good engineering practices and using the procurred material and services for the erection/construction of the process plant.
In EPC contract, the Client will provide BDEP to the EPC contractor which further do or perform detailed
engineering based on the BDEP.
Once the process plant is erected, it is then finally comissioned and handed over to the client for further production.
In this type of contract,
the contractor holds the single point responsibility as A to Z activities are to be performed by the specialised D.E.C.
An integrated EPC team can design, procure and construct facilities safer, in a shorter duration. Budget, schedule and performance risks are
transferred from the owner to the EPC contractor. This type of contract is a costly affair.
In EPC type of contract, there is lot of communication involved between client and EPC.
In PMC type of contract, the client will appoint PMC to oversee the EPC work and PMC will ensure on behalf of Client/Owner that execution of
the project by EPC shall be in accordance with the client scope of work.
PMC plan, implement, solve problems and manage all the activities involved in the project. PMC also depute experts from different fields to
ensure the successful completion of the project aligned with the client goals and objectives.
The PMC does not execute the project itself but would typically manage one or more EPCs on behalf of Client.
Turnkey projects is preferred where several activities are involved. The single party reduces coordination efforts with many contractors
that are required otherwise.
In turnkey projects, the Client will provide certain technical specifications of the project and based on these data contractor will perform
basic and detailed engineering. In turnkey project, the contractor owns a single point responsibility for
a) Basic and Detailed Engineering.
b) Construction
c) Commissioning
d) Start-up and handed over the plant to the client.
But in EPC contract, contractor may provide commissioning assistance and the commissioning shall be performed by the licensor and also
start-up to be done by licensor.