Contract on EPC Mode

Vs.

BOQ Mode

Punjab Saaf Pani Company (PSPC)

2

Introduction

PSPC- a public sector company incorporated under section 42 of Companies Ordinance

1984 since March 10, 2014

Under administrative control of HUD&PHE Department

Mandate of PSPC

Established as a special purpose vehicle (SPV) to conceive, plan, design, execute and

manage projects for provision of new Water Supply schemes.

Provision of safe drinking water in the Punjab province as per WHO standards

Mandate of the company is purely welfare oriented towards social services delivery

EPC MODE

3

What is EPC Contract?

EPC stands for Engineering, Procurement, Construction and is a prominent form of

contracting agreement in the construction industry. The engineering and construction

contractor will carry out the detailed engineering design of the project, procure all the

equipment and materials necessary, and then construct to deliver a functioning facility or

asset to their clients.

Companies that deliver EPC Projects are commonly referred to as EPC Contractors.

EPC MODE

4

Salient Features

Single point responsibility

Mile stone basis progress

Prescribed time limit

Fixed payment terms

High degree of risk for contractors

High degree of control

Free from cost variation

Limited risk for client

Contractor to rectify any defect

Contractor’s monetary liability is increased if not doesn’t perform to the specified level

BOQ MODE

5

What is BOQ (Bill of Quantities ) Contract?

Contractor is responsible to execute the project as per provided project specific measured

quantities of the items of work identified by the drawings and specifications in the tender/

bidding document.

BOQ MODE

6

Salient Features

Save the cost and time of several contractors measuring the same design in order to

calculate their bids for competition

Quantities may be measured in number, length, area, volume, weight or time

Provide a consistent basis for competitive bids

Provide an open basis for the contract; the client provides an extensive and clear

statement of the work he/she requires and the contractor states the price at which

he/she is prepared to undertake the job.

Provide a very strong basis for financial administration of the contract.

Contract price/value may vary

BoQ + 15% Design Variation

• Changes to be paid on “as is” basis upon submission of actual bill of quantities.

• Any other hybrid approach between BoQ and EPC?

7

EPC versus BOQ

8

Sr. # Clauses EPC BOQ

1 Regulation And

Works

The Contractor carries out all the

Engineering, Procurement and Construction

by himself

The Contractor constructs the works in

accordance with a design provided by the

Employer.

2 Contract

Administration

There may not be engineer. The Contract is

administered directly by the Employer who

endeavors to reach agreement with the

Contractor on each claim.

The Contract is administered by the Engineer

/EMC who shall determine any claim for

extension of time and additional payment, certify

payments and issue taking over and performance

certificates.

3 Allocated Risk A majority of risks is allocated to the

Contractor under the Contract, including any

errors in Setting Out Data, Site data and

Unforeseeable difficulties or costs

Risks are allocated on a fair and equitable basis

taking account of such matters as insurability,

and each party's ability to foresee, and mitigate

the effect of, the circumstances relevant to each

risk.

9

Sr. # Clauses EPC BOQ

4 The Design -

Errors In the

Employer’s

Requirements

The Employer shall not be responsible for

any error, inaccuracy or omission of any kind

in the Employer's Requirements as originally

included in the Contract

Any data or information received by the

Contractor, from the Employer or otherwise,

shall not relieve the Contractor from his

responsibility for the design and execution of

the Works.

The Employer shall be responsible for any errors

in these specified or notified items of reference.

The Contractor shall, whenever required by the

Engineer, submit details of the arrangements and

methods, which the Contractor proposes to adopt

for the execution of the Works. No significant

alteration to these arrangements and methods

shall be made without this having previously

been notified to the Engineer.

5 Contract Price Payment for the Works shall be made on the

basis of the lump sum Contract Price, subject

to adjustments in accordance with the

Contract

For each item of work, the appropriate rate or

price for the item shall be the rate or price

specified for such item in the Contract.

6 Duration of

Time

The contractor is strictly bound to follow the

timeline of project for timely commission of

project.

The time duration may vary with respect to

change in BOQ subject to approval of engineer

and employer.

EPC versus BOQ

10

Sr. # Clauses EPC BOQ

7 Payment The contractor is paid as per Milestone

schedule of the contract

a) The contractor is paid on the basis of work

done on the project

8 Extension of

Time/

Associated

Costs

The Contractor shall be entitled to an EOT

(extension of time) if completion for the

purposes of Taking Over of the Works and

Sections is or will be delayed by any of the

following causes:

i. A Variation has been agreed under

Variation Procedure

ii. Any delay, impediment or prevention

caused by Employer, the Employer’s

Personnel, or the Employer’s other

contractors on the Site

The Contractor shall give notice to the Engineer

and shall be entitled to an extension of time for

any such delay due to:

i. Any error in specified or notified items of

reference provided by employer

ii. Any error in the Setting Out data

iii. Any error in the Site data

iv. Unforeseen Site risks

EPC versus BOQ

11

Sr. # Clauses EPC BOQ

9 Possession and

Access to The

Site

The Employer shall give the Contractor right

of access to, and possession of, all the Site

parts of the Site within the time stated in the

Special Conditions.

The Employer shall give the Contractor right of

access to, and possession of, all parts of the Site

within the time stated in the Contract Data.

10 Claims

DB/ DAB

Disputes shall be adjudicated by a Dispute

Adjudication Board (DAB)

The Parties shall jointly appoint a DAB by

the date 28 days after a Party gives notice to

the other Party of its intention to refer a

dispute to a DAB

Disputes shall be referred to a Dispute Board

(DB) for decision

The Parties shall appoint a DB by the date stated

in the Contract Data

11 Escalation in

Contract Price

No Escalation is allowed Escalation may be allowed

EPC versus BOQ

12

Thanks