In the management of construction investment projects, general contractor is one of the factors affecting the success of the project. In recent years, Design – Build general contractor and EPC general contractor are popular models, which are competitive operating models of Vietnamese construction companies.
What is general contractor?
According to Article 3 of the Construction Law 2014, general construction contractor is a contractor signing a contract directly with the investor to undertake one or several tasks or all tasks of a construction investment project. The general contractor is usually the unit take full responsibility for the design and construction of a project.
There are many ways to classify general construction contractors, depending on the price of a construction contract, the relationship between the parties or the characteristic of the project. The most common classified are the following:
- – Design and build general contractor (Design – Build general contractor): responsible for both work parts: design and construction;
- – Engineering Procurement and Construction Contractor (EPC Contractor): This unit is responsible for designing, providing technology equipment, constructing and completing works for handing over as signed with the investor;
- – General contractor of construction investment project, engineering, supplying technology equipment and constructing: is responsible for all the above work, from making investment projects to the stage of survey, design, construction and completion of the project;
The difference between Design – Build general contractor and EPC general contractor
Through the name, it can be seen that these two general contractors have in common: both design and construction for the project. Thus, the construction will be homogeneous and more convenient for the investor to manage and supervise the project.
In addition, there are a few differences that investors should know to choose the most suitable contractor for their investment project.
As the name suggests, the EPC general contractor will be responsible for more work than the Design -Build general contractor.
If in the Design – Build general contractor contract, some jobs performed by the Investor such as purchasing equipment, monitoring and managing machinery … will now be transferred to the EPC contractor.
Requirements for contractors
To carry out a construction project from the actual survey to design, construction, construction supervision and completion and handover to the investor, the Design – Build general contractor requires strong human resources. A team of engineers, architects have capacity and professional experience, a team of responsible and skilled workers, with that way, the Design – Build general contractor can take on all responsibilities from design to construction, ensuring safety, quality, on schedule.
EPC general contractor, in addition to the high requirements of technical qualifications and construction capacity as above, because being a supplier of equipment, so the EPC general contractor must also ensure the quality of machinery as well as the warranty of equipment and machinery that they provide.
When the investor does not have experience in the construction field, along with the usual amateur project management, the situation of waste, loss of capital, loss of quality control, … is unavoidable.
The Design – Build general contractor or EPC general contractor is appropriate in this case, the investor can take advantage of the general contractor’s technical skills and management experience, and transfer the risks when constructing. The investor only has to manage one main responsible focal point, thus saving time, manpower as well as management costs. However, the EPC general contractor will help reduce the management pressure for the investor more: investors do not spend much effort on such tasks as purchasing technology equipment, managing machinery, … For large-scale factory construction projects, with hundreds of thousands of employees, many lines of machinery, the EPC general contractor is the most suitable choice.
In Vietnam, many construction projects are constructed by EPC contractor, which can be part of a project such as the O Mon 1 Thermal Power Plant (Unit 1), or an entire large-scale project such as Uong Bi Thermal Power Plant, Na Hang Hydropower Plant, Dung Quat Oil Refinery, …
D&B packages are more commonly applied, and can be found in many factory construction projects throughout the Industrial Zones.