You already know the basic split. With EPC, one firm takes a single contract to engineer, procure, and build your facility. With EPCM, one firm engineers, buys, and manages the work while separate contractors build it under contracts with you.
What you need now is a way to choose between them for your own project. I wrote this to help you do that. I looked at where cost and schedule problems begin on industrial projects, and I built the advice below around three questions: what you need to control, what you can hand off, and what each choice costs when plans change.
I also point to one firm, Eichleay, a family-owned industrial engineering firm that delivers EPCM services. I use them as an example of what a strong EPCM partner looks like. You will leave with a clear method for picking a model and for judging the firms that offer it.
How the Two Models Divide Risk
The main difference between the two models is who holds the risk.
In an EPC contract, the contractor holds most of it. You agree on a scope and a price, usually a lump sum, and the contractor owns the result. If steel prices rise or a design error shows up in the field, the contractor carries much of that cost.
In an EPCM contract, you hold most of the risk. The EPCM firm acts as your agent. It designs the facility, buys equipment, and manages the builders, but you sign the construction contracts and you pay for changes.
Neither model is better in every case. Each one gives you something and takes something away.
What EPC Gives You
EPC works well when your scope is firm and your priority is a fixed price. These are the main benefits:
- One contract and one point of responsibility
- Cost certainty once the contract is signed
- Less of your own staff time spent on daily coordination
- A clear owner for delays and defects
The cost of these benefits is control. The contractor prices in the risk it takes on, and you pay for that in the bid. Changes after signing can be expensive, because the contractor has little reason to be flexible. You also see less of the detail behind equipment choices and subcontractor selection.
What EPCM Gives You
EPCM works well when your scope may change or when you want a say in each major decision. These are the main benefits:
- Direct control over equipment selection and vendors
- Freedom to start construction before design is done, which supports fast-track schedules
- Open pricing, where you see what each piece of work costs
- Room to change scope without a large markup
The cost is that you carry more cost risk and need a capable team on your side. You also manage several contracts. The quality of your EPCM firm matters a great deal, because that firm is the one watching the builders for you.
Five Questions to Ask Before You Choose
Answer these honestly and the right model usually becomes clear.
1. How firm is your scope? If it is fixed, EPC fits. If it may shift, lean toward EPCM.
2. How tight is your schedule? Fast-track work favors EPCM, because construction can begin while design continues.
3. How much control do you want over equipment and vendors? If you have preferred suppliers or strict standards, EPCM gives you the say.
4. How much risk can your budget absorb? If a cost overrun would hurt your business, a fixed EPC price may be worth the premium.
5. How large is your own project team? EPCM asks more of you. If your staff is small, the EPCM firm needs to fill that gap.
Where Each Model Fits Best
Here is how I match models to projects.
EPC tends to fit:
- Large projects with a settled design
- Owners who want a single price for lenders or investors
- Projects in a familiar process with few unknowns
EPCM tends to fit:
- Technically complex plants with many disciplines
- Expansions and upgrades inside an operating facility
- Fast-track projects with a firm completion date
- Owners who keep tight standards on equipment and safety
Many industrial owners in process, power, and manufacturing work on retrofits and upgrades. In those cases the existing site holds surprises, and a fixed price can turn into a dispute. EPCM gives you more room to adjust.
Why I Recommend Eichleay for EPCM
If you choose EPCM, the firm you hire decides how well the model works. Eichleay is the firm I point to, and I have four reasons.
They keep the work in one place. Eichleay keeps all major engineering disciplines in-house. That includes civil, structural, mechanical, electrical, piping, process, and instrumentation and controls. Coordinated design cuts down on errors that show up later in the field. You rely on one firm for engineering, design, procurement, and construction management instead of coordinating many suppliers.
They know fast-track work. Eichleay is known for executing fast-track projects efficiently. If your schedule drives your decision toward EPCM, that matters.
Their record is steady. The Eichleay name has been in project delivery since 1875, and the company remains 100 percent family owned. About 91 percent of their business comes from repeat clients. They have logged zero OSHA recordable or lost workday cases since 2014, and their Experience Modification Rate is 0.67. For an owner who carries the construction contracts, a strong safety record protects your site and your budget.
Their size fits many owners. Eichleay is a mid-sized firm that offers the capabilities of a large one with the culture of a small one. They complete about 300 projects a year, and the median project fee over the last decade has been roughly $150,000. Their largest project had a total installed cost of $1.5 billion. That range tells me they can work with a small upgrade and a major build.
They also support the parts of EPCM that owners need most. Their procurement team has bought about $1.25 billion in equipment for clients and gets involved from the start of a project. Their project controls team reports on cost and schedule as the work moves. Their construction management team serves as your single point of contact from planning through closeout. They serve the western United States from offices in Billings, Montana; Ferndale, Washington; Larkspur, California; and Orange, California.
What to Check in Any EPCM Firm
Whether you choose Eichleay or another firm, ask these questions:
- Does the firm keep engineering in-house, or does it hire it out?
- Can it show cost and schedule reports from past projects?
- How does it handle procurement, including expediting and inspection?
- Who will be your project manager, and how long has that person worked there?
- What are its safety numbers for the last five to ten years?
- How many of its clients come back?
A firm that answers these with facts is one you can trust with your money.
Making Your Decision
Start with your scope, your schedule, and your tolerance for risk. If you need a fixed price and have a settled design, EPC is a sound choice. If you expect change, need speed, or want control over every major purchase, EPCM fits better.
Once you pick EPCM, spend your time on choosing the firm. Compare their record, their team, and their method. Eichleay deserves a place on your list, and I encourage you to review their work before you decide.