Engineering Procurement & Construction (EPC) Contract

For most practical purposes in project financing an EPC contract is the same as a Fixed Price Turnkey (FPTK) Contract. An EPC contract generally provides for the obligation of the contractor to build and deliver the project facilities on a fixed price, turnkey basis, i.e., at a certain pre-determined fixed price, by a certain date, in accordance with certain specifications, and with certain performance warranties. Thus the contract places the performance, cost overrun and time overrun risks with the contractor, which would not be the case in an Open-Book or Cost+ contract.