Mona Dajani Partner
November 2014 EPC (Engineering, Procurement and
in the Energy Sector in Construction) Contracts the USA
USA Infrastructure Day Mona Dajani, Partner Baker & McKenzie LLP November 20th and 21st, 2014 Madrid and Lisbon
Introduction, Objectives & Agenda –
Introduction
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Objectives
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1.
Discuss different types of contracting structures used in large-scale projects, with a focus on EPC
2.
Consider the key issues that may arise during negotiations and project implementation
Agenda Part I: Introduction to Contract Contract Structures frequently used for major projects in the United States Part II: Key EPC contracting contracting issues Part III: Practical tips
© 2014 Baker & McKenzie Mc Kenzie Mona Dajani
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Part I: Contract Structures
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Construction Constructio n Contract Consultants appointments
OWNER LEAD DESIGNER PROJECT MANAGER
Construction Contract
M&E ENGINEER MAIN CONTRACTOR
STRUCTURAL ENGINEER OTHERS
Sub Contracts
SUB CONTRACTORS
– Separation of design and construction – Original basis of many of the standard forms – Still relevant for large non-project financed contracts and some elements of project-financed projects – cf. “hybrid construction” approach (novating design to contractor)
© 2014 Baker & McKenzie Mc Kenzie Mona Dajani
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Construction Constructio n Contract - Pros & Cons Advantages Advantages – greater control of design requirements and construction process – flexibility, flexibility, including as to pricing approach and selection of contractors – speed of bidding (once design completed) c ompleted) – ability to replace defaulting contractor
Disadvantages Disadvantages – design and construction interface risk – requires full design before commencement of work – buildability issues – adversarial relationship – may be relevant for infrastructure assets but not for plant
© 2014 Baker & McKenzie Mc Kenzie Mona Dajani
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