Successful Transition Towards EPC: Enhancing Engineering Phase Performance for Project Success

In today’s competitive construction landscape, the shift from traditional contracting models to Engineering, Procurement, and Construction (EPC) has emerged as a transformative trend. EPC models are popular for their ability to streamline project delivery and improve control over key processes, often leading to increased profitability. However, while the benefits are promising, this approach demands a sophisticated level of project management to address the complexities inherent in EPC projects.

Undesirable project performance tends to become apparent during the construction phase; however, the root causes of delays and cost overruns are often embedded across all EPC phases. Although the engineering phase represents a relatively small portion of the total project cost, it has the highest effect on the total cost of the project. Therefore, even minor deficiencies in the engineering phase can lead to substantial cost escalations, affecting the financial performance of the entire project.

Research by Habibi, Kermanshachi, and Rouhanizadeh (2019) highlights that effective communication within the design team is paramount for engineering phase schedule performance, accounting for 33% of its influence. Delays in decision-making and Change order driven by the owner also significantly impact the schedule, contributing 26% and 18%, respectively. Regarding engineering phase cost performance, the experience level of consultants and clients plays a crucial role, influencing 44% of outcomes followed by Change order driven by the owner with 40%. Notably, “Change orders driven by the owner” emerges as one of the most critical KPIs for both schedule and cost performance for enigeering phase.

To mitigate these risks, five best practices have been identified as critical to improving both schedule and cost performance in the engineering phase are

• Constructability: Engaging construction experts early in the design process can preemptively address potential challenges, ensuring that designs are practical and cost-effective.
• Alignment: Clear alignment on project goals, budgets, and timelines across all stakeholders reduces miscommunication and ensures everyone is moving towards a common objective.
• Partnering: Developing collaborative relationships among the project’s diverse stakeholders enhances communication, trust, and joint problem-solving.
• Lessons Learned: Applying insights from past projects can avoid repeat mistakes, streamline processes, and bolster efficiency.
• Change Management: Implementing a robust change management strategy allows for structured evaluation of scope changes, minimizing disruptions and keeping the project on track.

The EPC model brings both opportunity and challenge, requiring construction firms to rethink traditional management approaches and emphasize proactive monitoring, efficient communication, and adaptable processes. By prioritizing KPIs and best practices in the engineering phase, firms can enhance project outcomes, protect profitability, and ensure that each phase contributes effectively to project success.