Document Detail

Title: RR130-11 - PEpC: A Breakthrough Project Delivery System That Improves Performance by Reforming Owner, Contracto
Publication Date: 6/1/1998
Product Type: Research Report
Status: Reference
Pages: 310
Vorster, Magrogan, McNeil, Virginia Tech
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Abstract

This document reports on research, undertaken under the guidance of Construction Industry Institute Research Team 130, to develop a new and innovative project delivery system that reduces the time and cost of capital project execution without reducing quality and lifecycle performance. The motivation to undertake the work was based on the belief that the expertise embedded in the design of strategic procurement items and/or systems as well as the expertise needed for successful project integration is frequently lost or underutilized when suppliers are silent partners in the EPC process.

The three research objectives may be summarized as follows:

  1. To identify and recommend a step change in the EPC process so that the suppliers of strategic procurement items and/or systems may be brought into an expanded circle of cooperation between owner and contractor.
  2. To measure the impacts that this change will have on the EPC process.
  3. To provide a means to facilitate implementation.

The first objective was met by following a structured search for innovation, and defining PEpC (Procurement, Engineering, procurement and Construction) as

an innovative project delivery system which makes it possible to utilize supplier expertise in all phases of the project life cycle by developing an advance procurement strategy and reaching agreement with suppliers on strategic procurement items and/or systems prior to the associated project engineering activities.

The second objective was met by measuring the time and cost savings that could realistically be achieved when breakthrough changes brought about by PEpC were implemented. This analysis, based on ten theoretical implementation scenarios and four case studies, showed that savings in time between 10 and 15 percent and savings in total project labor cost between 4 and 8 percent were possible.

The third objective was met by developing a number of tools to assist in each step of a defined PEpC implementation process. Attainment of the objectives led to four principle conclusions. These were:

  1. There is a need to bring suppliers of strategic items and/or systems into the circle of cooperation between owner and contractor.
  2. A step change to the EPC process that achieves this result can be defined.
  3. Implementing PEpC will produce significant savings in the time and cost of the entire project delivery process.
  4. Implementing PEpC will require changing many existing procedures.

The research report concludes by recommending that PEpC be implemented on suitable projects, that CII expand and develop its current focus on supplier involvement in the capital project delivery process, and that additional research be carried out to resolve and confirm many issues which fall outside the scope and limitations of this report.