Introduction

For complex energy related projects including power plant projects, the preferred contract module used is normally the EPC (Engineering, Procurement, Construction) or EPCIC (Engineering, Procurement, Construction, Installation & Commissioning ) Contracts.

Though it is the preferred method it is not without its issues and mastering the ins and outs of the EPCIC contracts will prove to be a worthwhile endeavor in mitigating risks and liabilities that are likely to arise in these contracts

EPCIC contracts are uniquely challenging and parties who are currently involved or will be involved in these types of contracts which are mainly large and complex and often fast-track must find ways to reduce potential financial losses through effective contract negotiation, drafting, and management.

Mastering the contractual clauses will give you the know-how to effectively implement EPC & EPCIC contracts to ensure a successful project.

This course is specifically designed to address the key issues as it relates to all the parties involved in the contract . It give you the best approach on how to allocate and manage risks, liabilities, Force Majuere events. You will learn effective contracting strategies for successful EPCIC project delivery.

The course is specifically designed to provide participants with a well- tested and practical guide:

  • The different models of EPC Contracts,
  • The inherent risk, liabilities and befits of employing various contracting strategies
  • The challenges of EPCIC lump sum contracts and the ways to manage cost over-runs,
  • Structuring the contract to address the issues of the several parties to the contract to ensure a positive project outcome. Pros and Cons of the split EPCIC contract
  • Insights into the current issues affecting EPCIC contracts like pollution, HSE and local content

Objectives

The course seeks to ensure participants will:

  • Be skilled in EPC contract negotiation and administration.
  • Be part of a team able to manage risks in EPCIC contract.
  • Better execution and project management to minimize risk delay and costs over-runs.
  • Safeguard the projects essentials and maintain contractor relationships for long term success and efficiency
  • Achieve the project goals in line with company’s overall objectives

Training Methodology

Participants to this training course will receive a thorough training on the subjects covered by the seminar outline with the Trainer utilising a variety of proven learning teaching and facilitation techniques. Seminar methodology includes interactive session with role playing, case studies, discussion groups and scenario building and the high- point of the course being a simulation exercise of an EPCIC contract negotiation involving interactive role play by the participants.

This training course will provide the participants an ideal opportunity to improve and sharpen their skill sets in planning, negotiating and managing EPC contracts.

Organisational Impact

EPC contracts is the preferred contract module for major complex projects in the energy sector. Your organisation will benefit from this course by :

  • Gaining expertise and improving knowledge and skill sets of personnel dealing with EPC contracts on its essential terms and conditions.
  • Knowledge of EPC contracts to work out best contract strategies.
  • Understand the risk factors in EPC and how to mitigate them before they affect profits and bottom lines.
  • Enhancing internal capacity to manage key contractual risks
  • Better managing claims and disputes and avoiding adversarial approaches
  • Enhancing contract personnel negotiation skills

Personal Impact

Attendees will gain by participation in this training seminar as a result of:

  • Appreciating the terms and conditions of EPC contracts
  • Managing and mitigating risks associated with EPCIC contracts
  • Ensuring smooth contract administration
  • Dealing with critical issues involved with contract completion.
  • Choosing most appropriate form of dispute resolution
  • Enhancing your ability to negotiate and manage claims and disputes with confidence

Who Should Attend?

This training course is suitable for a wide range of profession, but will greatly benefit:

  • Contract / Project Professionals
  • Commercial Contract Professionals
  • Commercial Operation Professionals
  • Contract Engineers
  • Procurement supply chain professionals
  • Risk Manager / Contract Risk professionals

The Course Outline

Day One

Main Characteristics Of EPC Contracts For Energy Projects

  • Understanding EPC role matrix and contract structure
  • Maximizing parties rights and interests with appropriate contracting strategy
  • EPC Contractor’s single point of responsibility
  • Split contract structure
  • Fixed Contracts Price and Milestone Payment Terms
  • Fixed Completion Date

Identifying EPC Project Risks In Current Market Conditions

  • Roles & Responsibilities of Parties during contract period
  • Assessing risks in times in a challenging economy
  • Assessing how risks have been changed by current challenges in the economy
  • Project Contracting trends
  • Overcoming business, operational and project risk
  • Are projects prepared for market risks,
  • How to contract out project risk and optimize value Chains in EPC Contracts?

Importance Of Tender Process In An EPC Contract

  • Legal, Technical and Commercial Pre-Qualification of tenderers
  • Best practices in tender evaluations and selection of tenderer
  • Important of scope of work and specifications
  • Use of standard terms and conditions
  • Exceptions – what to accept and what to deny
  • Finalizing tender negotiations & award
  • Letter of Intent / Letter of Award - essential terms and legal effects
  • Discussion & Analysis of different tendering & contracting strategies
  • Case Study – Design & Specification Faults
  • Case Studies – on Tenders

Day Two

Key Contractual Terms Of EPC Contracts

  • Identifying critical issues in the project life-cycle
  • Managing cost impact clauses like delay, price fluctuations
  • Indemnities and Liabilities
  • Force Majeure & Limiting events of Force Majeure
  • MAC clauses,
  • HSE Liabilities
  • Changes in Law and regulations in host country & stabilization clauses
  • Political Risk Insurance
  • Termination for cause and for convenience
  • Discussion of Case Study on FIDIC EPC Contract

Day Three

Risk Management Issues Employer & Contractors Risk

  • Contracting out risk & Optimizing Value Chains
  • Design, Technology & Process Risk ;
  • Procurement & Specification risk
  • Variations and cost impact
  • Payment and multi- currency contracts
  • Delay and liquidated damages
  • Completion and testing & effects of acceptance
  • Passing of risk on completion
  • Claims management & the rights and remedies available to the parties
  • Liability, indemnities and insurance coverage
  • Review: EPC Case Studies
  • Review Specification Checklist
  • Case studies on Force Majeure

Day Four

Contract Completion – Critical Issues

  • Date of Completion
  • Acceptance of punch list of defects - What is the effect?
  • Passing of tile and risk - safety & insurance -
  • Warranties and Guarantees
  • Passing of Intellectual Property rights
  • Defects - Exculpatory Clauses -
  • Defects Liability period, contract claims and employer remedies
  • Termination of Contract – rightful & wrongful termination

Day Five

Contract Negotiation & Dispute Resolution

  • Acquiring negotiation skills
  • Reviewing the Harvard Law School Points on Negotiation Skills
  • Key roles and responsibilities of the negotiating team
  • Identifying key success bargaining positions
  • Concluding Negotiations
  • Dealing with disputes - Choosing the Best Disputes Resolution Process
  • Should you Mediate or Arbitrate
  • Costs and other considerations
  • Inter-active session on negotiation skills
  • Closing : Q & A

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