Alternative Contracting Structures for the delivery of a project

INTRODUCTION

A key issue for project sponsors at the outset of any project is to decide the type of contracting structure which will be used to deliver the project.

This paper provides a summary of the key features of some alternative contracting structures and then sets out a diagram of each structure together with a list of advantages and disadvantages.

ALTERNATIVE STRUCTURES

Alternative 1 – EPC structure

The EPC structure will be most familiar to project sponsors. Under this structure, the project company enters into a contract with the EPC contractor which will then enter into various subcontracts with its sub-contractors for performance of discrete portions of work. The EPC contractor provides the project company with a single point of responsibility for ensuring the project is completed on time and meets the performance requirements.