(1) For the owner, the contractual relationship is simple and the workload of organization and coordination is small. The owner only signs one contract with the general contractor, which greatly simplifies the contractual relationship. The supervision engineer mainly coordinates with the general contractor, which greatly reduces the coordination workload of construction project supervision.
(2) The contractor assumes all responsibilities for design and construction, and the contractual responsibility interface is clear and explicit. Unlike traditional contracting methods, in design-construction, EPC or turnkey contracts, the contractor assumes all responsibilities for design and construction, which is called single point responsibility. The owner only accepts the project completed by the contractor according to the contract and technical specifications, without coordinating the design and construction interface or participating in the daily management of the project. This means that the owner does not need to worry about how to effectively coordinate the project. When there are engineering defects, the owner only needs to find the EPC general contractor, and there is no need to worry about whether the design consulting company or the contractor should be responsible for the engineering defects.
(3) Lump sum contracts are conducive to controlling project costs.
In EPC general contracting contracts, the lump sum contract model is usually used, especially the fixed lump sum contract, which ensures that the owner can know the final cost, payment time and amount of the entire project. The lump sum contract model can reduce the contractor's initial working capital investment and encourage the contractor to complete the project as soon as possible. On the other hand, in the lump sum contract model, the owner is easy to finance, and the lending bank can also determine the final cost of the project and know in advance the contractor's withdrawal time.
(4) It is conducive to project financing.
Many lending banks of engineering projects believe that in the EPC general contracting contract, the single contract responsibility and lump sum contract model will be able to guarantee the final cost of the project and complete it on time, reduce the risk of project cost overruns and completion risks, and provide more secure protection for lending banks or institutions. In BOT projects and similar projects, lending banks will insist on using the design-construction, EPC or turnkey contract model.
(5) It is conducive to increasing the speed of project procurement.
In the traditional contracting model, the owner needs to complete the two stages of design bidding and construction bidding before entering the project implementation stage. In the design-build contract model, the owner combines the design and construction bidding into one, which reduces the time of project procurement and improves efficiency.
(6) Improves the efficiency of project implementation and shortens the construction period.
Since the EPC general contractor is responsible for the design and construction work, the contractor does not need to spend more time to understand the design of the owner or the consulting engineer hired by the owner. The contractor can digest the owner's requirements, understand the connection between design and construction, and formulate a reasonable construction plan and schedule during the project bidding stage, that is, the project concept design and preliminary design stage.
(7) Reduce the project cost by optimizing the design and implementing fine construction.
After the design scheme is determined, 90% of the total project cost is determined, and the construction management factor only affects 5% of the total cost. Therefore, the economical or not of the design scheme plays a decisive role in the total project cost.
(8) EPC general contractors can provide more professional and efficient management.
In the traditional model, the owner will set up a project management organization to manage a certain project. This management organization can be in the form of a headquarters or a project company. During the project construction period, the workload of the project management organization is large and requires a large number of management personnel. The owner's own human resources are generally insufficient. At this time, temporary employment or loan of management personnel from external units is required; during the project operation period, the management and maintenance workload is small, and the personnel of the project management organization need to be diverted on a large scale.
In the EPC model, project management personnel are all professional teams of the general contractor. They are influenced by the same corporate culture, have consistent management concepts and working methods, cooperate with each other tacitly, and can provide professional and efficient management.
(9) Reduce the pressure on the owner to be responsible for project safety and quality.
According to the spirit of the EPC general contracting contract, the owner only proposes the construction goals of the project, strictly checks the completion acceptance of the project, and does not interfere too much with the specific details of the construction process. Because of the non-intervention, the responsibility is mainly borne by the general contractor, so the owner is less responsible for the quality and safety of the project. Therefore, the EPC general contracting contract is equivalent to building a firewall for the owner, transferring the quality and safety risks of the project to the general contractor.
(10) The design scheme is highly constructible and has fewer design changes.
Under the EPC model, when the design unit formulates the design scheme, the construction unit of the project has already been determined. In this way, the design unit can carry out targeted design optimization based on the construction experience of the construction unit and its own equipment, so as to improve the constructibility of the design scheme and reduce design changes.
