Front End Engineering Design is split into two phases. At the completion of each phase there is a go/no-go decision to be made.
Phase 1: FEL-2 deliverables
• M/E Balance and performance targets
• Preliminary plant layout
• Schedule
• Budget
Phase 2: FEL-2 deliverables
• Equipment Scopes
• Installation Scopes
• Preliminary suppliers list
For the FEED process to be successful it is necessary to develop the project with the close help and cooperation of the client.
Engineering, Procurement, Construction Management is an engineering contract where an engineering consultant administers the project on behalf of the client.
Tasks typically include:
• Review of offers received
• Project timeline management
• Project budget & cash flow management
• Supplier inspections prior to shipment
• Development of installation schedule
• Supervision of installation tasks
• Administration of site activities
• Performance guarantee development
• Management of project handover
BURNS can fill the role of your specialist engineering consultant for a EPCM contract. This is an attractive option as the flow of cash from client to contractor is direct, and the EPCM contractor's role is to provide advice and evaluation of options. The EPCM contractor acts as an extension of the local engineering department or consultant. Generally, this approach delivers a better project at lower cost than is the case for a project delivered under an EPIC contract with the advantage that it can usually be financed from cash flow.
Engineering, Procurement, Installation & Commissioning The advantage of an EPIC contract is that it delivers a project for an agreed fixed price. To guarantee an EPIC, the contractor must carry special insurance. It is necessary for the financial guarantees to be in place when the contract documents are signed, usually in the form of an IR/LC or ESCROW account.
The FEED contract must be complete before an EPIC contract can be written. The final agreed contract price will only be available once the 3rd party tenders are received, evaluated, and accepted with the agreed terms.
An EIPC contract is usually a LSTK (Lump Sum Turnkey) project. In some cases, an EPIC contract may be awarded for the installation commissioning and handover phase of the project. The EIPC contractor is taking full financial risk for the project so the fees are higher.
In some cases, an OBC (Open Book or Cost-Plus) contract may be available for consideration as a more cost-effective method of project delivery, because the budget is based on FEL-3 information and the performance risk is shared.