ENGINEERING, PROCUREMENT & CONSTRUCTION AGREEMENT

This Engineering, Procurement & Construction Agreement is made and entered into as of the ____ day of __________ [YEAR] (the “Effective Date”) between [COMPANY] located at _____________ (“Owner”) and _________________, a ___________________________ located at ________________________ (“Contractor”). Owner and Contractor are collectively referred to as the “Parties” and individually as a “Party.”

RECITALS

WHEREAS, the Owner desires to build a ______________Project located in the ________________________(the “Project”);

WHEREAS, the Contractor is duly organized in accordance with the laws of _________________, _____________;

WHEREAS, the Contractor, as general contractor, itself or through contractors and subcontractors, desires to provide engineering, procurement and construction services for the Project.

Comment: An architect’s design does not usually include every element of construction that is needed. Generally, “engineering” refers to the work of taking a pre-existing design and producing a plan for each major component of construction. Even this level is generally not complete so that subcontractors also need to perform “detail engineering” to plan out every component of their own work (e.g., the exact metal fasteners used to hold a doorframe to a wall and so forth). For an industrial facility, where function is paramount, the engineering firm often produces the entire design without any formal role for an architect (although the engineering firm often has an architect on staff).

“Procurement” is the process of purchasing the major items needed for the Facility. Although usage varies, procurement more typically refers to the major components of machinery needed to make a Facility operational, such as storage tanks but does not refer to the thousands of tons of cement or concrete block used in the foundation and walls of the Facility – these commodity items are lower risk and not the focus of as much contractual effort. A contractor often charges a significant markup on procurement items but also bears the risk of transport and transportation-related delays; procurement can account for a significant part of the contractor’s profit under the EPC Agreement.

A general contractor performs construction work and hires subcontractors in specialty trades, such as plumbing or concrete pours, while a project manager performs no construction work at all, but hires and coordinates all of the work through subcontractors.

AGREEMENT

NOW THEREFORE, for and in consideration of the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows: