Most significant, private sector power projects use an EPC contract, as do projects in the energy sector and the oil and gas industry. However, EPC contracts have risk issues that need to be managed to avoid heavy claims and losses. The parties to an EPC contact need to know how to control risks to avoid the pitfalls inherent in EPC contracts. Parties to an EPC contract will do well to be familiar with EPC terms, conditions, obligations, and responsibilities to prevent such pitfalls. Managing and resolving contracts claims is equally important to prevent cost overruns and delay in the project.
This course will give the best practices that will put the delegates on the right track to avoid expensive mistakes. The training course will address the key issues required to deliver EPC contract forms and best practices successfully. It will be central to the effective management of risk by both employer and contractor covering the main pertinent core contract management and claims requirements.
By the end of this training course, the participants will learn to:
- Develop an understanding of the key terms and conditions of EPC construction projects in the Energy and Power Sector
- Learn in detail the issues to be addressed when negotiating EPC and EPCIC contracts
- Develop an awareness of the contracting options for projects and the associated risks and opportunities
- Consider alternative pricing strategies to reduce cost escalation
- Acquire an understanding of the current contracting methods
- Gain insights into claims and dispute management
This training course will be delivered with interactive sessions and detailed case studies utilising a variety of proven learning techniques to ensure maximum understanding, comprehension, and retention of the information presented. This includes exercises designed to improve and sharpen the skill sets of delegates in planning, analysing, negotiating, and managing claims through interactive sessions using quizzes, case studies, discussion groups and scenario building.
The objective of the interactive sessions is to enable the delegates to apply the knowledge and understanding gained during the course. It will have a practical insight into managing the contract risks and enhancing their rewards.
The organisation will benefit by:
- Having a contracting team that have an in-depth understanding of EPC contracts
- Save the costs and management time in resolving claims by improving the abilities of the claim management team
- Provide options to organisation on how the best to deal with cost escalation and what solutions are available
- Reducing delay in projects with better contracting procedures
- Acquire to use alternate dispute resolution processes to resolve claims disputes
This training course teaches the competencies that enable the delegates to:
- Negotiate a more effective EPC contract
- Improve their claims management
- Avoid the common pitfalls associated with EPC contracts
- Handing Delay and Extension of Time Claims
- Dealing with variation claims, including rejection and approvals
- Anticipate problems and be proactive in contract management
- Familiar with the dispute resolution methods to resolve claims and disputes
This training course is suitable for a wide range of professionals involved in contracts and claims management. It will significantly benefit contracts professionals and project managers:
- Contract Professionals
- Project Managers
- Contract Administrators
- Contract Engineers
- Project Engineers
- Risk manager / Contract Risk Professionals
- Project Owners / Employers
- Contractors and Equipment/Material Suppliers
- Contract Administrators
- Quantity Surveyors
- Legal Advisors
DAY ONE
EPC CONTRACT FOR THE ENERGY AND POWER SECTOR
- Contracting Strategy for the Energy Sector
- Main Characteristics of EPC, EPCM, EPIC & EPCC
- Relationship between Employers and Contractors in an EPC contract
- Contract Management: Scope, Schedule, & Budget
BASIC FEATURES OF A POWER PROJECT
- Project Company’s Responsibilities
- Build, own, operate and transfer (BOOT) or Build Operate Transfer (BOT)
- Essential features of a Power Purchase Agreement affecting an EPC Contract
- Take of Pay Provisions
CONTRACTOR SELECTION
- Importance of Pre-qualification of Tenderers
- The need for FEED (Frontend Engineering & Design)
- Invitation to Bid (ITB) essential requirements
- Bidder Evaluation, Exceptions, Reservations, Deviations and Omissions.
- Local Content Requirements
- Letter of Intent (LOI) and Letter of Award (LOA)
DAY TWO
KEY SPECIFIC CLAUSES IN POWER AND ENERGY EPC CONTRACTS
- Contract Schedule
- Delay and Extension of Time
- Delay Damages
- Contract Liabilities and Indemnities
- Insurance
- Impact of Force Majeure on the Contract
- Licensing and transfer of Intellectual property
- Material Adverse Changes
- Termination for Cause and Convenience
DAY THREE
EPC CONTRACTING MILESTONES
- Mobilisation
- Milestone Payments
- Progress Reports
- Practical Completion
- Defects Liability Period
- Contract Close-Out
- Certificate of Final Completion
CRITICAL ISSUES IN EPC CONTRACTS
- Project Lifecycle Issues
- Transfer of Risks to Third Parties
- Defective design, technology, and process -risk and liabilities
- Inadequate and Incomplete Specification
- Justification for Variations
- Commissioning, Testing Acceptance and Rejection
DAY FOUR
CONTRACT CLAIMS MANAGEMENT
- Overview of main contractual provisions relevant to claims and counterclaims
- Root Causes for Typical Claims
- Counter Claims: How they differ from claims
- Rights of Set-off
- BOQ Rates, Lump Sum and Re-measured Contract
- Reviewing Claims
- Realistic Appraisal
- When to make admissions – and denials
- Offers of Settlement
CLAIMS PRESENTATION
- Requirements for Claim Presentation
- Notices
- Timing and Time Limits
- Are time Limits Binding?
- Defining features of Claims Evaluation and Management
- Recognising the Causes of Claims
- Warning Signs of Disputes
- Recording Claims
DAY FIVE
ADMINISTRATIVE AND CONTRACTUAL CLOSURE – CHECKLIST
- Receipt and Formal Acceptance of Contractual Terms
- No Claim or Investigation Pending
- All actions on contract price revision and changes concluded
- All Outstanding Contract Issues Settled
- Partial or complete termination involved – action completed
- Contract audit if required, completed
- Transferring lessons learned to future project
RESOLUTION of CONTRACT DISPUTES
- Procedures
- Communications Between Parties
- Impact on Relationships
- Adjudication & Dispute Resolution Boards
- Litigation
- Alternative Disputes Resolution Process
- Expert Determination