EPC project general contracting is a construction mode of project procurement, also known as the integration mode of design, procurement and construction.

It refers to entrusting an engineering company with design-procurement-construction general contract from the beginning of design through bidding after the project decision-making stage.

In this mode, the engineering company is responsible for managing and controlling the progress, cost, quality and safety of the project according to the total price or adjustable total price stipulated in the contract, and completing the project according to the contract.

There are many derivatives and combinations of EPC, such as EP+C, E+P+C, EPCm, EPCs, EPCa, etc.

Advantages:

(1) The owner entrusts the design, procurement, construction and commencement services of this project to the general contractor to be responsible for organizing the implementation. The owner is only responsible for overall, principled and objective management and control. The general contractor can give full play to his subjective initiative and make use of his advanced management experience to create more benefits for the owners and contractors. The work efficiency is improved and the coordination workload is reduced.

(2) Less design changes and short construction period.

(3) Due to the use of lump-sum contracts, there is basically no need to pay claims and additional engineering costs; The final price of the project and the required construction period have great certainty.

Disadvantages:

(1) The owner cannot control the whole project.

(2) The general contractor is responsible for the cost, duration and quality of the whole project, which increases the risk of the general contractor. In order to reduce risks and gain more profits, the general contractor may adjust the design scheme to reduce costs, which may affect the quality in the long run.

(3) Due to the adoption of lump sum contract, the contractor has little flexibility in obtaining the owner's change order and additional fees.

2. Project Management Contract (PMC) mode

PMC is a project management consultant, that is, a project management contract.

Refers to the whole process and all-round project management of the project by the project management contractor on behalf of the owner, including the overall planning, project definition, project bidding, EPC contractor selection, and overall management of design, procurement, construction and commissioning, and generally does not directly participate in the specific work of the design, procurement, construction and commissioning stages of the project.

PMC mode reflects the separation of preliminary design and construction drawing design. Construction drawing design enters the field of technical competition, but the preliminary design is completed by PMC.

Advantages:

(1) can give full play to the professional skills of management contractors in project management, coordinate and manage the design and construction of the project in a unified way, and reduce contradictions.

(2) It is conducive to saving investment in construction projects.

(3) This mode can optimize the design of the project and realize the lowest cost in the project life cycle.

(4) While ensuring excellent quality, it is beneficial for the contractor to obtain the right to share or distribute the project income in the future, which can shorten the construction period. In high-risk areas, share sharing is usually used to stabilize the team.

Disadvantages:

(1) The owner's participation in the project is low, the right to change is limited, and coordination is difficult.

(2) The owner's great risk lies in whether he can choose a high-level project management company.

(3) This model is usually applicable to: large-scale projects with project investment exceeding 654.38 billion US dollars; The introduction of PMC can ensure the smooth completion of projects in countries and regions lacking management experience.

At the same time, help these countries and regions improve the project management level; Projects built with loans or export credits from banks or foreign financial institutions or consortia; There are many and complicated process devices, and the owner is not familiar with these huge projects.

3. Design and construction mode

DB means design and construction, which is also called turnkey operation internationally and design-construction in China.

It was after the project principle was determined that the owner chose a company to be responsible for the design and construction of the project.

This method is based on lump sum contract at the time of bidding and contract signing.

The design-build general contractor is responsible for the whole project cost. He first chooses a consulting design company to design, and then selects subcontractors by bidding. Of course, he can also use his own design and construction strength to complete some projects.

DB avoids the contradiction between design and construction, which can significantly reduce the project cost and shorten the construction period.

But the focus of the owner's concern is whether the project is delivered according to the contract, not how the contractor implements it.

At the same time, when selecting contractors, taking the quality of design scheme as the main bid evaluation factor can ensure that the owners can obtain high-quality projects.

Advantages:

(1) Work closely with the contractor to complete the project planning and acceptance, thus reducing the time and cost of coordination.

(2) The contractor can integrate his knowledge and experience of materials, construction methods, structure, price and market into the design at the initial stage of participation.

(3) It is beneficial to control the cost and reduce the cost. Foreign experience proves that the implementation of DB mode can reduce the cost by about 10% on average.

(4) It is beneficial to schedule control and shorten the construction period.

(5) Single responsibility. Generally speaking, the contractual relationship of construction projects is the relationship between the owner and the contractor. The responsibility of the owner is to pay in the way stipulated in the contract, and the responsibility of the general contractor is to provide the products needed by the owner on time. The general contractor is fully responsible for the whole process of project construction.

Disadvantages:

(1) has poor control over the final design and details.

(2) The supplier's design has a great impact on the project economy, and the contractor takes a great risk in DB mode.

(3) Quality control mainly depends on the quality of the functional description when the owner bids, and the level of the general contractor has a great influence on the design quality.

(4) Short time, lack of specific laws and regulations, and no special insurance.

(5) The operation of the model is complicated and its competitiveness is low.

4. Parallel Contract (DBB) mode

DBB is the design-bid-build mode, and it is one of the most common and earliest engineering project contracting modes in the world.

It means that the owner entrusts the architect or consulting engineer to carry out all the preliminary work (such as opportunity study and feasibility study), and then designs after the project evaluation is passed.

Prepare construction bidding documents in the design stage, and then select contractors through bidding; However, subcontracting of individual projects and procurement of equipment and materials are generally carried out by contractors, subcontractors and suppliers.

In the project implementation stage, engineers provide construction management services for the owners.

The most prominent feature of this model is that it emphasizes that the implementation of engineering projects must be carried out in the order of D-B-B, and only when one stage is completely completed can another stage be started.

Advantages:

The advantages are that the management method is mature, all parties are familiar with relevant procedures, the owner can freely choose consulting designers, control design requirements, freely choose engineers, and adopt standard contract texts familiar to all parties, which is beneficial to contract management, risk management and investment reduction.

Disadvantages:

(1) The project cycle is long, and the owner signs contracts with the designer and the constructor respectively to manage the project by himself, with high management fees.

(2) The constructability of the design is poor, and the ability of engineers to control the project objectives is not strong.

(3) It is not conducive to the division of responsibility for engineering accidents, and there are many disputes and claims arising from drawing problems.

This management mode is the most common in the world, and it is adopted in projects based on loan from the World Bank, ADB and FIDIC contract conditions.

At present, the project legal person responsibility system, bidding system, construction supervision system and contract management system widely used in China are basically based on the traditional models of the World Bank, ADB and FIDIC.

5. Construction management contract (CM) mode

The construction management approach mode is also called "design and construction at the same time".

Phased contracting mode or fast track mode, CM mode is that the owner entrusts the CM unit, as a contractor, to adopt the conditional "design and construction at the same time" to shorten the project cycle, also known as fast track method.

That is, the production organization mode of fast track is used in construction management, which directly guides construction activities and affects design activities to a certain extent. However, the contract with the owner usually adopts such a "cost+profit" contracting model.

In this way, the contradiction between design and construction is coordinated by the construction manager and the decision is made public.

Its characteristic is that the owner and the project manager and engineer entrusted by the owner form a joint team to be responsible for organizing and managing the planning, design and construction of the project.

After the partial (single) project design is completed, the part will be invited for bidding and awarded to the contractor. If there is no general contractor, the owner will directly sign a contract with the contractor for each single project.

This is a widely popular contract management mode abroad in recent years, which is different from the continuous construction production mode in which all design drawings were completed before bidding.

There are two realization forms of CM mode: CM unit service, which is divided into proxy and non-proxy.

1, agent CM ("agent" CM): act as the agent of the owner and collect the service fee.

2. Risk CM ("at-risk" CM): As the general contractor, it can directly subcontract, directly sign contracts with subcontractors, and bear the maximum project cost GMP to the owner. If the actual project cost exceeds GMP, the excess shall be borne by CM unit.

Advantages:

(1) In terms of project schedule control, CM mode adopts decentralized contracting and centralized management, which makes the design and construction fully overlap and is conducive to shortening the construction period.

(2)CM units should strengthen coordination with designers, so as to reduce the time delay caused by design modification.

(3) In terms of investment control, through coordinated design, CM units can also use methods such as value engineering to help owners put forward reasonable suggestions on design, tap the potential of saving investment, and greatly reduce design changes in the construction stage.

If CM mode with GMP is adopted, CM unit will bear more direct economic responsibility for the control of project cost, thus greatly reducing the risk of owners in the control of project cost.

(4) In terms of quality control, the combination and coordination of design and construction, and the adoption of new technologies and methods in engineering are conducive to the improvement of engineering construction quality.

(5) The choice of subcontractors is jointly decided by the owner and the contractor, so it is more sensible.

Disadvantages:

(1) requires higher qualifications and credibility of CM manager and his unit.

(2) Itemized bidding may lead to higher contract costs.

(3)CM mode generally adopts the "cost plus expense" contract, which requires a higher model contract.

6. Build-operate-transfer (BOT) mode

BOT is a build-operate-transfer model.

It means that a national consortium or investor, as the initiator of a project, obtains the construction concession of a certain project infrastructure from the government of a country, and then it forms a project company independently with other parties to be responsible for the financing, design, construction and operation of the project. During the whole concession period, the project company gains profits from the operation of the project and repays debts with the profits.

When the concession expires, the whole project will be handed over to the host government by the project company free of charge or at a very low nominal price.

The biggest feature of BOT mode is that with the permission and support of the government, it can obtain preferential policies and broaden financing channels.

BOOT, BOO, DBOT, BTO, TOT, BRT, BLT, BT, ROO, MOT, BOOST, BOD, DBOM and FBOOT are all different evolution modes of standard BOT operation, but their basic characteristics are the same, that is, the project company must obtain the franchise granted by relevant government departments.

This model is mainly used in some infrastructure projects such as airports, tunnels, power plants, ports, toll roads, telecommunications, water supply, sewage treatment and so on, which have large investment, long construction period and profitable operation.

Advantages:

(1) can reduce the government's sovereign debt borrowing and debt repayment responsibilities.

(2) The risks of public institutions can be transferred to private contractors, so as to avoid public institutions undertaking all risks of the project.

(3) It can attract foreign investment to support domestic infrastructure construction and solve the problem of insufficient construction funds in developing countries.

(4)BOT projects are usually contracted by foreign companies, which will bring advanced technology and management experience to the host country, not only bring more development opportunities for domestic contractors, but also promote the integration of the international economy.

Disadvantages:

(1) During the concession period, the government will lose control of the project ownership and management rights.

(2) There are many participants, complicated structure, long pre-project time and high financing cost.

(3) may lead to a large number of tax losses.

(4) It may lead to predatory operation of facilities.

(5) After the project is completed, there will be a large amount of foreign exchange outflow.

(6) Asymmetric risk sharing. Although the government has shifted risks such as construction and financing, it has assumed more other responsibilities and risks, such as interest rate and exchange rate risks.

7. Public-private partnership model (PPP)

The mode of PPP private participation in public infrastructure construction and public affairs management is collectively called public-private partnership (PPP).

Specifically, it refers to the cooperative relationship between the government and private enterprises based on a project, which is a financing model of franchise projects.

The project company is responsible for financing, construction and operation, and the government usually reaches a direct agreement with the financial institutions that provide loans. This agreement is not a guarantee for the project, but a commitment made by the government to the lending institution, that is, to pay the relevant fees according to the contract signed between the government and the project company.

The agreement enables the project company to obtain loans from financial institutions more smoothly.

The expected income, assets and government support of the project will directly affect the quantity and form of loans.

The essence of this financing form is that the government gives private enterprises long-term franchise and income rights in exchange for accelerated construction and effective operation of infrastructure.

PPP mode is suitable for projects with large investment, long construction period and slow return on capital, including transportation departments such as railways, highways, bridges and tunnels, energy departments such as electricity and gas, and telecommunications networks.

Whether in developed or developing countries, the application of PPP model is more and more extensive.

The key to the success of the project is that the participants and shareholders of the project have clearly understood all the risks, requirements and opportunities of the project, and may fully enjoy the benefits brought by the PPP model.

Advantages:

(1) Public * * * departments and private enterprises participate in the demonstration at the initial stage, which is conducive to determining the feasibility of project financing as soon as possible, shortening the preliminary work cycle and saving government investment.

(2) Risk sharing can be realized at the initial stage of the project. At the same time, because the government shares some risks, risk sharing is more reasonable, which reduces the risks of contractors and investors, thus reducing the difficulty of financing.

(3) Private enterprises participate in project financing at the early stage of the project, which is beneficial for private enterprises to introduce advanced technology and management experience from the beginning.

(4) The public sector and private enterprises * * * participate in the construction and operation, and the two sides can form a long-term goal of mutual benefit and better serve the society and the public.

(5) Integrating all parties involved in the project into a strategic alliance plays a key role in coordinating the different interests of all parties.

(6) The government has certain control rights.

Disadvantages:

(1) For the government, how to determine the cooperative company has increased the difficulty for the government, and it has to bear certain responsibilities in cooperation, which has increased the risk burden of the government.

(2) The organization form is complex, which increases the difficulty of management and coordination.

(3) How to set the rate of return of the project may become a controversial issue.