What does epc+o mode mean?

epc o model refers to the general contracting framework that integrates design, procurement, etc. It is some operational links derived from epc; that is, during the construction period, the general contractor must not only undertake traditional In addition to the design tasks in the sense, we also need to take care of all maintenance tasks during the operation period. This model can greatly improve the operational efficiency of many projects and quickly reduce operating costs.

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What does the epc o model mean?

epc o model refers to the general contracting framework that integrates design, procurement, etc. It is Some operational links derived from epc. Generally speaking, during the construction period, in addition to the traditional design tasks, the general contractor also has to undertake all maintenance tasks during the operation period. Therefore, through this integration model, the operational efficiency of many projects can be greatly improved and operating costs can be quickly reduced.

EPC O/O&M, that is, the general contracting model integrating design, procurement, construction and operation (or operation and maintenance), is an extension of the back-end operation link based on the EPC general contracting model, that is, general contracting In addition to traditional design, procurement, and construction tasks during the construction period, the contractor also assumes operation and maintenance responsibilities during the operation period. This integration method can improve the operational efficiency of the project and reduce costs throughout the life cycle.

Basic characteristics of the EPC general contracting model:

(1) Under the EPC general contracting model, the contractor (owner) should not control the general contractor too strictly , but the general contractor should be given greater freedom of work in the construction of construction projects. For example, the contractor (owner) should not review most of the construction drawings and inspect every construction process. What the contractor (owner) needs to do is to understand the progress of the project, understand whether the project quality meets the contract requirements, and whether the construction results can ultimately meet the functional standards of the construction project stipulated in the contract.

(2) The contractor (owner) generally adopts two methods to manage EPC general contracting projects: process control mode and post-supervision mode. (1) The so-called process control model means that the contractor (owner) hires a supervision engineer to supervise all aspects of the general contractor's "design, procurement, and construction" and issue a payment certificate. The contractor (owner) intervenes in the management of the project implementation process through the supervision of the supervision engineer in all aspects. The "Production Equipment and Design-Construction Contract Conditions (1999 First Edition)" compiled by FIDIC adopts this model. (2) The so-called ex-post supervision model means that the contractor (owner) generally does not intervene in the management of the project implementation process, but is relatively strict in the completion acceptance process, and conducts ex-post supervision of the overall project implementation process through strict completion acceptance. The "Conditions of Contract for Design, Procurement and Construction (First Edition 1999)" compiled by FIDIC adopts this model.

(3) The general contractor of the EPC general contracting project shall be responsible for the entire process of "design, procurement, and construction" of the construction project, as well as for the quality of the construction project and the performance of all professional subcontractors of the construction project. Take overall responsibility. In other words, the general contractor is the first person responsible for the EPC general contracting project.

EPC O model helps the implementation of the entire life cycle of infrastructure projects

The concept of collaboration throughout the life cycle of infrastructure investment, construction and operation is accompanied by The popularity of the PPP model is deeply rooted in the hearts of the people, and the EPC O model is the latest practice of local governments and social capital under this concept. EPC O is the general contracting model that integrates design, procurement, construction and operation. It is an extension of the back-end operation link based on the EPC general contracting model. Through this integration method, the operational efficiency of the project is improved and the cost of the whole life cycle is reduced. . Table 1 reflects the differences between PPP and EPC O modes.

The difference between PPP and EPC O mode

Features of EPC O mode

1. Reduction cost, save investment, shorten the construction period, and reduce the contractor’s cash flow pressure

For the government, the EPC O model has a fast process, less supervision, and is more flexible. The settlement is not larger than the budget, and the budget is not higher than the estimated budget. It is applicable Projects with tight construction deadlines and quick results. For contractors, this type of project cycle is short, there is no need to consider capital investment and financing issues, and the requirements for corporate cash flow are not high.

It is worth mentioning that reducing costs and saving investment is to control the life cycle cost of the project, not necessarily to reduce the project cost. For example, if good equipment or good construction technology is adopted, even though the project cost is higher, the later stage Operation and maintenance costs will drop significantly, rather than simply saving costs in the traditional sense.

2. Give full play to the synergy between various sections and truly realize full-cycle management

EPC O can solve the disconnect between design and operation, design and construction by integrating design, construction and operation, forwarding the operation needs to the design stage, and allowing suggestions to facilitate construction and save costs to be reflected to designers. The problem of disconnection strengthens the single main responsibility of the contractor, so that the contractor must consider operational planning and operational income issues during the design and construction stages, and promote the effective connection between design, construction and operation, so as to achieve efficient management of the entire life cycle of the project. .

Expand knowledge:

1. The state strongly supports the epc o model. Now the central government and many local governments have issued policies to encourage epc o model policy. For example, in 2016, the Finance Office proposed to actively adopt the EPC O model such as design and procurement;

2. Various contractors can introduce many operational services to the industrial park based on this EPC O model. project, this requires the renovation of some old industrial areas of the unit, and also requires the improvement of some hard conditions in some industrial parks. This will encourage social revitalization and renewal, and will also be of great help to ecological restoration. Therefore, there are many environmentally friendly public projects that strongly promote this model.

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