EPC contracts appeared in the terminology of Russian lawyers relatively recently. EPC (Engineering Procurement Construction) came to us, together with foreign customers, contractors, as well as banks participating in the project financing process, along with the abbreviation FIDIC. Russian business examined, appreciated and began to actively apply the EPC contract form for its projects, pushing aside the good old construction contract aside.
EPC contract is a contract concluded between the customer and the contractor. According to this contract, the contractor performs a full cycle of work and is responsible for the risks associated with construction.
EPC contract is a mixed contract containing the terms of several contracts, and our firm "Madroc" is ready to help you drafting such contracts as:
1) contract for the paid rendering of services, in the case of the EPC contract, engineering services;
2) the contract for the supply of equipment (procurement);
3) construction project contract
First of all, the EPC contract is interesting, when: the customer company does not have its own service for managing the construction project, it is inappropriate to interfere in the management and assume (share) the respective risks, the customer's attention is absorbed by other projects, and there are not enough management resources to switch them to a new facility, there is a reliable contractor, who can be completely trusted with the construction.
In addition, EPC-contracts are most often sought to conclude on projects financed by banks or other financial institutions. First of all, this refers to project financing. This is explained by the fact that banks and financial institutions, issuing a loan, are interested in ensuring that project companies take on a minimum number of risks. And in the EPC contracts, most of the risks, including the risks of delays and unforeseen additional costs, are borne by the EPC contractor.
With the right choice of general contractor, the EPC contract is the most reliable and convenient type of the contract for the customer.
Until recently, there have been cases where no contractor responded to the EPC tender proposal. But with the advent of numerous construction organizations and with the increasing competition between them, the number of EPC-type contracts is steadily growing, and we, in turn, are ready to provide you with legal services and consultations on the EPC contracts.