VALVE MAGAZINE Spring 2024

EPC EFFICIENCIES

tainty, with ever-changing demand and increasing regula tions. Prices and deliveries are not as predictable as they once were. How do project owners or EPC contractors trying to supply everything protect their interests? It is not easy. Get delivery dates in purchase orders — A P.O. is not effective unless it has an expected delivery date on it. Ship date is important, but the delivery date is critical if the vendor is handling freight. Set a realistic fabrication time frame, and consider tying any liquidated damages to late deliveries. Communicate frequently and effectively — Regular communication with vendors and suppliers can help ensure there are no surprises with delays or cost overruns. Buy local — When possible, there can be advantages to

buying from domestic suppliers. It is easier to visit the shop and monitor progress, and it eliminates the added complica tions of international shipping. Equipment stuck in customs doesn’t make anyone money. New or Used? To save time and money, it can be advantageous to acquire gently used or new yet never assembled equipment. Many EPC contractors have access to used equipment, which may offer cost and delivery time savings. If the owner chooses this route, it is critical to ensure the equipment is complete, fully functioning and that it fits the application with limited or no modifications required. Used products may not come with a warranty. Make sure to have someone with intimate knowledge of the product inspect the equipment prior to purchasing.

The Real Costs of the Procurement Process

for an EPC Construction Project With all this information, what is the best thing for the owner to do? It really depends on how the company is set up. If it has a “Projects” division with enough capacity to administrate the project, keeping some or all of the work in-house may make the most sense. Eliminating risks is key. Companies can eliminate cost risk and schedule risk by purchasing large pieces of equipment or materials very early in the project. That is what the EPC contractor is going to do and they will follow up on those critical path items on a frequent basis. The critical components should also be checked during fabrication by sending someone to the fabricator, if possible. Owners who take the least expensive route and go with an inexpe rienced supplier could cost the project millions of dollars and delays. Hiring the right EPC or project lead can save months or years and possibly millions of dollars before a facility is even operational.

David Dorman has over 27 years of commercial and industrial construction experience. He maintains licenses as a project manager and an estimating professional. He has over 13 years of experience in the oil & gas industry where he has overseen design/build construction for production and storage support facilities. ABOUT THE AUTHOR

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VALVE MAGAZINE

SPRING 2024