Skip to Main Content
Contract Strategies for Major Projects
book

Contract Strategies for Major Projects

by Edward W. Merrow
December 2022
Intermediate to advanced content levelIntermediate to advanced
304 pages
7h 18m
English
Wiley
Content preview from Contract Strategies for Major Projects

CHAPTER 5The Unusual EPC Lump‐Sum Strategies

As discussed in Chapter 3, the primary contracting strategies account for about 90 percent of industrial projects. But there some other strategies that have been developed to address some of the problems that bedevil the standard EPC and split forms. Most of these strategies are FEPC strategies that take single contractors all the way from the beginning of FEED (or even a bit earlier) through the end of construction (and may include startup as well). All of these unusual strategies are “continuity strategies,” which is a feature that makes them attractive to owners who worry about being capable of managing transitions.

The following are the unusual EPC‐LS strategies:

  • Functional specification contracts (also called duty specification or performance specification contracts)
  • Design competitions
  • Convert to EPC lump‐sum (also called convertible contracts)
  • Guaranteed Maximum Price (GMP, also called not‐to‐exceed [NTE] contracts)

Of course, there are compelling reasons why these contract approaches have remained niche applications in the industrial sectors rather than mainstream. Some relate to difficulty of use and others to very specific market situations. All of these unusual strategies have some strong advocates, even in situations in which they are not appropriate. Because they will be recommended from time to time, it is important to understand what the approaches entail and their strengths and weaknesses. That is our task in this ...

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

Contract Negotiation Handbook: Getting the Most Out of Commercial Deals

Contract Negotiation Handbook: Getting the Most Out of Commercial Deals

Damian Ward

Publisher Resources

ISBN: 9781119902096Purchase Link