In April 2023, the Establishment of Chemical Engineers (IChemE) posted the 1st edition of The Blue Book, Engineering, Procurement and Design Administration (EPCM) Agreement which is the to start with standardised EPCM agreement. The Form of Contract is made up of a product type of arrangement, general circumstances, supplemented with in depth steerage notes and optional clauses working with payment jurisdiction, payment system or other project particulars.
Prior to its release, EPCM contracts ended up commonly bespoke contracts since of the absence of an ideal normal kind contract.
The Blue Guide has been warmly welcomed in the industry by employers, contractors and advisers and FIDIC are predicted to adhere to accommodate and release its personal EPCM deal the finish of 2023.
What is EPCM and how is it distinct to Engineering Procurement Design (EPC)?
Underneath an EPC Contract, for case in point the FIDIC Silver Ebook 2017, the contractor provides a entire facility to the developer from commencement by way of to closing completion/hand-above. In contrast, the EPCM contractor does not have our any development work but will take on a part of layout and job administration and co-ordination, far more akin to a experienced companies contract.
The vital differences concerning the two varieties of procurement are summarised beneath.
The publication of The Blue E book fills a hole in the availability of conventional varieties for EPCM contracting. Mostly directed at course of action engineering and other efficiency associated tasks, The Blue Guide includes a range of beneficial advice notes and schedules to help the user. In addition, The Blue Book’s optional situations and payment problems (reimbursable, set cost or goal price) for use in addition to the typical situations signifies that the clauses can be aligned to the undertaking targets and locality. For example, Element A would be chosen for tasks in the British isles and consists of payment provisions to get account of the Design Act Aspect B is made up of provisions working with target price tag pricing, and Portion C lets parties to involve project particular mechanisms, this kind of as the use of dispute evaluate boards and specialist determination.
When very similar in similar, the EPC and EPCM contracting products are vastly various and treatment should really be taken when looking at the kind of agreement to be employed on a task possessing regard to contracting and funding structure, venture specifications, roles and sophistication of functions, time and charges etcetera.