HERVE BARON

The evolution of EPC contracting

Welcome to this presentation. It shows the evolution that took place in EPC contrcting schemes over the last 30 years.

Comments are most welcome (herve. aron!gmail.com"# which I will incorporate for the enefit of all. $erv%
2013 Herv Baron

HERVE BARON

Contracting schemes EPC Contracts

Clients contracting strategy Phase &

2013 Herv Baron

HERVE BARON

Contracting schemes

Clients contracting strategy Phase &

EPCM Re-imbursable

2013 Herv Baron

HERVE BARON

Contracting schemes
Pro's an( Cont's

Clients contracting strategy Phase &

EPCM Re-imbursable

2013 Herv Baron

HERVE BARON

Contracting schemes EPC Contracts

Pro's an( Cont's Phase &
)ll risks with Client *u(get an( sche(ule slippage E+tensive supervision staff

Clients contracting strategy Phase &

EPCM Re-imbursable

2013 Herv Baron

HERVE BARON

Contracting schemes
Pro's an( Cont's Phase &
)ll risks with Client -lippage u(get an( sche(ule E+tensive supervision staff

Clients contracting strategy Phase &

EPCM Re-imbursable

Phase ,

2013 Herv Baron

HERVE BARON

Contracting schemes
Pro's an( Cont's Phase &
)ll risks with Client -lippage u(get an( sche(ule E+tensive supervision staff

Clients contracting strategy Phase &

EPCM Re-imbursable

Phase ,
EPCM LS E P
2013 Herv Baron

HERVE BARON

Contracting schemes EPC Contracts

Pro's an( Cont's Phase &
)ll risks with Client -lippage u(get an( sche(ule E+tensive supervision staff

Clients contracting strategy Phase &

EPCM Re-imbursable

Phase ,
EPCM LS E P
2013 Herv Baron

HERVE BARON

Contracting schemes
Pro's an( Cont's Phase &
)ll risks with Client -lippage u(get an( sche(ule E+tensive supervision staff

Clients contracting strategy Phase &

EPCM Re-imbursable

Phase , Phase ,
EPCM LS E P Improvement over Phase & on sche(ule an( u(get E+tensive supervision staff
2013 Herv Baron

HERVE BARON

Contracting schemes
Pro's an( Cont's Phase &
)ll risks with Client -lippage u(get an( sche(ule E+tensive supervision staff

Clients contracting strategy Phase &

EPCM Re-imbursable

Phase , Phase ,
EPCM LS E P Improvement over Phase & on sche(ule an( u(get E+tensive supervision staff
2013 Herv Baron

What (ifference (i( Phase , ring compare( to Phase & for Engineering (evelopment.

HERVE BARON

Contracting schemes
Pro's an( Cont's Phase &
)ll risks with Client -lippage u(get an( sche(ule E+tensive supervision staff

Clients contracting strategy Phase &

EPCM Re-imbursable
En!ineerin! "on#inuum

Phase , Phase ,
EPCM LS E P
$EE% #&en C$' (or EPC

Improvement over Phase & on sche(ule an( u(get E+tensive supervision staff
2013 Herv Baron

HERVE BARON

Contracting schemes
Pro's an( Cont's Phase &
)ll risks with Client -lippage u(get an( sche(ule E+tensive supervision staff

Clients contracting strategy Phase &

EPCM Re-imbursable

Phase , Phase ,
EPCM LS E P Improvement over Phase & on sche(ule an( u(get E+tensive supervision staff
2013 Herv Baron

Phase 3

HERVE BARON

Contracting schemes
Pro's an( Cont's Phase &
)ll risks with Client -lippage u(get an( sche(ule E+tensive supervision staff

Clients contracting strategy Phase &

EPCM Re-imbursable

Phase , Phase ,
EPCM LS E P Improvement over Phase & on sche(ule an( u(get E+tensive supervision staff
2013 Herv Baron

Phase 3
LS')

HERVE BARON

Contracting schemes
Pro's an( Cont's Phase &
)ll risks with Client -lippage u(get an( sche(ule E+tensive supervision staff

Clients contracting strategy Phase &

EPCM Re-imbursable

Phase , Phase ,
EPCM LS E P Improvement over Phase & on sche(ule an( u(get E+tensive supervision staff
2013 Herv Baron

Phase 3
LS')

HERVE BARON

Contracting schemes
Pro's an( Cont's Phase &
)ll risks with Client -lippage u(get an( sche(ule E+tensive supervision staff

Clients contracting strategy Phase &

EPCM Re-imbursable

Phase , Phase ,
EPCM LS E P Improvement over Phase & on sche(ule an( u(get E+tensive supervision staff

Phase 3 Phase 3
LS') )ll risks with Contractor

2013 Herv Baron

HERVE BARON

Contracting schemes
Pro's an( Cont's Phase &
)ll risks with Client -lippage u(get an( sche(ule E+tensive supervision staff

Clients contracting strategy Phase &

EPCM Re-imbursable
Less an* less nee* (or a PMC

Phase ,
Improvement over Phase & on sche(ule an( u(get E+tensive supervision staff

Phase ,
EPCM LS E P

Phase 3 Phase 3
LS') )ll risks with Contractor

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS')

Contracting schemes EPC Contracts

$ow (oes the Contractor mitigate risks.

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Contracting schemes EPC Contracts

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's

Contracting schemes EPC Contracts

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing

, (ifferent schemes/ 3a an( 3

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing

P&ase 3a
+ ,eneral Cons#ru"#ion Con#ra"#or

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing

P&ase 3a
+ ,eneral Cons#ru"#ion Con#ra"#or

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing

Phase 3a P&ase 3a
+ ,eneral Cons#ru"#ion Con#ra"#or + 0e(uce( risk an( supervision

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing

Phase 3a P&ase 3a
+ ,eneral Cons#ru"#ion Con#ra"#or + 0e(uce( risk an( supervision

P&ase 3b in#ense "os# -ressure

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing

Phase 3a P&ase 3a
+ ,eneral Cons#ru"#ion Con#ra"#or + 0e(uce( risk an( supervision

P&ase 3b in#ense "os# -ressure

+ Mul#i-le Cons#ru"#ion Con#ra"#ors Sub 2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing

Phase 3a P&ase 3a
+ ,eneral Cons#ru"#ion Con#ra"#or + 0e(uce( risk an( supervision

P&ase 3b in#ense "os# -ressure

+ Mul#i-le Cons#ru"#ion Con#ra"#ors Sub 2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing

Phase 3a P&ase 3a
+ ,eneral Cons#ru"#ion Con#ra"#or + 0e(uce( risk an( supervision

Phase 3 P&ase 3b in#ense "os# -ressure

+ Mul#i-le Cons#ru"#ion Con#ra"#ors Sub+ Increase( competition + E+tensive coor(ination
2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing

What usually happene(.

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing E1P (elays 23 -u 4contractor has to accelerate hence claims

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing E1P (elays 23 -u 4contractor has to accelerate hence claims

What new scheme was intro(uce( to mitigate.

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing E1P (elays 23 -u 4contractor has to accelerate hence claims

Phase 5

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Contracting schemes EPC Contracts Pro's an( Cont's

Phase 3
Partial risk sharing E1P (elays 23 -u 4contractor has to accelerate hence claims

Phase 5
EP . C in Consor#ium or /0

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing E1P (elays 23 -u 4contractor has to accelerate hence claims

Phase 5
EP . C in Consor#ium or /0

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing E1P (elays 23 -u 4contractor has to accelerate hence claims

Phase 5
EP . C in Consor#ium or /0

Phase 5
+ Improve( risk sharing + 6o claims + 7ess competitive

2013 Herv Baron

HERVE BARON

Contractor's strategy Phase 3

LS') Cons#ru"#ion sub-"on#ra"#

Pro's an( Cont's Phase 3

Contracting schemes EPC Contracts

Partial risk sharing E1P (elays 23 -u 4contractor has to accelerate hence claims

Phase 5
EP . C in Consor#ium or /0

Phase 5
+ Improve( risk sharing + 6o claims + 7ess competitive

2013 Herv Baron

Which scheme is etter for C89P)6:/ 3 or 5. Why.

HERVE BARON

Typical EPC associations

2013 Herv Baron

HERVE BARON

<oing further

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2013 Herv Baron