Engineer, Procure and Construct

A contract under which the contractor engineers, procures and constructs [EPC] the work, often a building or large-scale facility. In practice, this is a form of outsourcing under which the client does not design the solution, but invites bidders to quote a price for designing the works, procuring the materials and constructing the facility, before handing over the finished project to the client. This transfers the design risk to the contractor and, as EPC contracts are often associated with fixed pricing, the risk of cost overrun is also borne by the contractor. Such projects are sometimes called ‘turnkey contracts’. See also Contract, Turnkey and Design and Construct.