EPC (engineering, procurement, and construction) contracts
emerged in the 1970s and 1980s as a response to the increasing
complexity of large oil, gas, and power projects. By bundling all
three project phases into a single agreement, the contractor is
responsible for delivering the entire project. This delivery model
is now also commonly used for infrastructure
developments.
In EPC contracts, typically, the contractor manages all phases
of the project, making for a streamlined process with a single
point of communication and often significant risk transfer.
A key feature of EPC contracts is Front End Engineering Design
(FEED), which follows concept design and helps secure budget
approvals before tender. The FEED then guides detailed design and
engineering. Previously, the FEED contractor was liable for
guarantees and resolving issues, but now the EPC contractor assumes
this responsibility upon contract award.
