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Risk Management & EPC Contracts

Engineering, Procurement and Construction (EPC) contracts are the most common form of contract used to undertake construction works by pharmaceutical companies on large scale and complex process plant projects. The major advantage is single point responsibility.

Under an EPC contract, a contractor is obliged to deliver a complete facility to a developer who need only “turn a key” to start operating the facility, hence EPC contracts are sometimes called “turnkey construction contracts.” In addition to delivering a complete pharmaceutical facility, the contractor must deliver that facility for a guaranteed price by a guaranteed date and it must perform to the specified level. Failure to comply with any requirements will usually result in the contractor incurring monetary liabilities.