EPC, split EPC and multi-party contract projects
Produced in partnership with Clarke Willmott LLP
EPC, split EPC and multi-party contract projects

The following Construction guidance note Produced in partnership with Clarke Willmott LLP provides comprehensive and up to date legal information covering:

  • EPC, split EPC and multi-party contract projects
  • Outline of EPC contract procurement
  • Advantages of EPC contract procurement
  • Disadvantages of EPC contract procurement
  • Outline of split EPC contract procurement
  • Advantages of split EPC contract procurement
  • Disadvantages of split EPC contract procurement
  • Outline of multi-party contract procurement
  • Advantages of multi-party contract procurement
  • Disadvantages of multi-party contract procurement

There are three main procurement routes used in UK energy projects:

  1. engineering, procurement and construction (EPC) contract procurement

  2. split EPC contract procurement

  3. multi-party contract procurement

This Practice Note provides a review of each of these methods, and discusses some of the benefits and disadvantages of each route and practical issues to consider. It is intended as a basic guide; professional legal advice should be sought before choosing a procurement option for your specific project.

Outline of EPC contract procurement

The EPC contract is the most common method of procurement for UK energy, large-scale and complex infrastructure projects. Under an EPC contract the contractor is responsible for the delivery of the total project including the design, engineering, procurement of the materials, construction and testing of the mechanical elements. For more information on EPC contracts see Practice Notes: Introduction to EPC contracts, EPC contracts—handover, testing and commissioning and EPC contracts—limits of liability.

The diagram below illustrates the key contractual structure of a project procured using the EPC route with project finance backing. This structure may change from project to project although the diagram details the contractual matrix:

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Effectively, an EPC contract usually specifies that the project be delivered on a turnkey basis. This means it should be delivered for a fixed price, within a fixed time