The engineer-procure-construct (EPC) project delivery model has gained increasing acceptance. The benefits of the EPC model are extensive: ability to accelerate project schedules by integrating construction planning and long-lead equipment procurement with the design; ability to provide owners with a single responsible party; ability to transfer at least partial project delivery risk to a third party; and ability to outsource full project delivery when an organization is in full operation mode, among others.
One question worth exploring is what type of organizational structure is best equipped to deliver a successful EPC project. Many engineering firms, contractors and original equipment manufacturers (OEMs) claim the ability to deliver EPC projects, and often owners will solicit proposals from all three types of organizations. Evaluating the proposals when all three types of organizations respond can amount to comparing apples and oranges, as each company is likely to showcase its areas of greatest strength. Rising above this fray, however, are some true EPC integrators.
While EPC is a common delivery method for infrastructure projects, it is relatively rare to find an experienced and knowledgeable team that is fully integrated and under one roof. Organizations tend to gravitate toward what they historically have been good at while outsourcing other components of the project. That is not necessarily problematic, but the amount of control and oversight over the outsourced work makes a difference. When an OEM is the prime contractor, how much oversight does it provide over the subcontractors in the field? When an engineering firm is the prime contractor, how much effort goes into adopting the appropriate procurement and subcontracting strategy to avoid markups? When a general contractor is the prime contractor, how much care is put into quality assurance and design conformance to minimize long-term maintenance burdens for the owner? True EPC integrators — those organizations that have a good balance among their engineering, procurement and construction groups — do exist.
Consider the example of a solar field project and the common misconception that executing such a project is simple. Construction for a solar field may appear less cumbersome than for a combined-cycle power plant, but that does not mean expensive and potentially detrimental issues could not arise. The assembly-line nature of installing thousands of photovoltaic (PV) panels or batteries on a site means that one mistake in engineering, procurement or construction could be repeated over and over.
A single installation project could involve five or more separate subcontractors to execute PV engineering, battery energy storage system (BESS) and balance-of-plant engineering, BESS integration, high-voltage engineering, and overarching construction.
In contrast, an integrated EPC firm can provide all services required to deliver the desired power or energy capacity, on time and within budget. With access to permitting specialists, a multidisciplinary engineering team and construction resources — who are already working together, experienced as an effective unit — owners can gain extensive benefits from having just one contract, one integrated execution team and a single direct contact. This full-service, in-house team approach allows continual and seamless collaboration across all necessary specialties focused on the sole end goal: a safe and successful project.
Before the design is finalized, for example, environmental specialists on the integrated team can identify site constraints, such as wetland areas or underground piping, as well the local permitting rules and regulations. High-voltage engineers can address interconnection and substation requirements, and thermal management specialists can provide valuable insight on energy storage system cooling requirements, all to provide the owner with accurate information on project challenges, as opposed to passing that from subcontractor to subcontractor.
Pulling in the Same Direction
Major Canadian EPC projects we have worked on, ranging from the Christina Lake Ipiatik transmission line in Alberta to the Chinook Power Station in Saskatchewan, have benefited from this integrated approach, combining sound design with efficient procurement and hands-on construction management. Having all personnel involved and available from day one helps projects progress smoothly. Engineers who work closely on-site with construction personnel better understand the execution process, and therefore can provide a construction-led design that encompasses implementation sequencing.
Continuity and consistency smooth any wrinkles as a project progresses from concept through construction. Close collaboration among construction, engineering and other team members not only helps to see that the design is accurate, holistic and implemented correctly, but also helps the team pivot quickly and safely throughout the project. If an issue were to arise, the entire team would be prepared to determine a prompt, safe and cost-effective solution.
When applicable, engineers from the integrated EPC firm may attend factory acceptance tests and lead technical reviews of deliverables. Everything from procurement of materials to their assembly on-site can be managed by the integrated team, choreographing the work of subcontractors and facilitating communications among all parties who contribute to faithful execution of the project objectives.
Finally, integrated EPC firms are incentivized to make the overall project successful. When EPC project teams are composed of numerous independent parties, a situation can develop in which individual contractors are focused solely on their scope to maximize their own returns. In contrast, integrated firms do not succeed unless and until the overall project succeeds.
Engineering companies, construction firms and OEMs each have their strengths, but those strengths may not translate into the ability to manage the full extent of the EPC scope. To determine who is best situated to deliver their EPC projects, owners must honestly evaluate what parameters will define the success of their project: low initial capital cost, reliability of design, and long-term operational support. Ideally, all three objectives would be met, but not all EPC providers can perform that delicate balancing act.
Before making a cost-based choice, owners should recognize the importance of considering the team dynamic. An integrated EPC firm offers exceptional value across the full range of project aspects, including environmental, design, construction and commissioning, with seamless and ongoing communication to mitigate risks and deliver the preferred outcome within budget and on schedule. Owners should look for a true EPC integrator, like Burns & McDonnell, one that has the ability to deliver the project in its entirety with equal focus given to all aspects of EPC.
Managing challenging weather and coordinating off-site prefabrication of equipment helped bring the 353-megawatt Chinook Power Station online on time and under budget. See how we used integrated EPC to help the utility meet its objectives.