We are in the media: how to avoid today’s risky fixed-price contracts with EPCM


If you are planning a large capital project, to be successful, you must choose the capital project management strategy that matches today’s turbulent times. In the fall of 2021, investors keep facing unpredictable materials costs, and short supply of quality contractors. Many partners are demanding to renegotiate the fixed contracts. This volatility is causing many companies to re-think their strategy for managing capital projects. After all, when capital projects come in over budget and late, the entity most negatively impacted is you. If your factory or plant costs more than you budgeted, and if it gets commissioned months (or years) later than you planned, you are out of pocket in both increased capital costs and lost profit potential.

For these key reasons, many organizations are moving away from design & build (general contracting) and EPC and towards EPCM as a project strategy. 

EPCM offers flexibility with timelines because it lets you implement your project in stages. This lets you implement design changes at any stage, or even refine the strategy during project execution. EPCM also helps you attract the best engineers and other subcontractors for each stage of the project (architectural, civil, mechanical, electrical). EPCM mitigates risk by eliminating fixed-bid contracts and the uncertainties that come with them. Companies that adopt the EPCM project strategy are never at the mercy of general contractors who threaten to walk off the job, cancel the contract, or demand exorbitant increases in budget. This means that, before you sign any contracts for construction work, you face limited financial risks in case of project cancelation. 

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