Contract for design, supply of technological equipment and construction

Article overview

Contract for design, supply of technological equipment and construction (EPC) is one of the types of contracts in the construction field. It includes three main stages: technical design, equipment supply and construction. The EPC contract will record agreements between participating parties to ensure the project is carried out on schedule, quality and budget.

Contract for design, supply of technological equipment and construction of works
Contract for design, supply of technological equipment and construction of works

Concept of contract for design, supply of technological equipment and construction (EPC contract)

EPC contract is a type of general contract in the construction field. Based on Point g, Clause 1, Article 3 of Decree 37/2015/ND-CP amended by Point d, Clause 2, Article 1 of Decree 50/2021/ND-CP, the EPC contract includes work from design, Procurement of materials and equipment for construction works. This contract also includes trial run, acceptance and handover to the contractor.

 Construction equipment for construction projects
Construction equipment for construction projects

Contents that must be agreed upon before signing a contract for design, supply of technological equipment and construction

Clause 3, Article 1, Decree 50/2021/ND-CP stipulates the contents that need to be agreed upon before signing an EPC contract. Participating parties need to agree on:

  • Scope of work expected to be performed
  • Construction location, route direction and technical specifications of the project
  • Information about natural and geological conditions of the construction area
  • Requires construction design and initial design parameters
  • Technology, engineering and equipment plans
  • Solutions for connecting technical infrastructure and preventing fire and explosion
  • Construction plans and main materials
  • Quality management, testing and maintenance requirements
  • Main architectural and structural solutions of the project
  • List of applicable technical standards
  • Technical instructions for materials, equipment and operating procedures
  • Environmental protection and safety requirements
  • Procedures for approval and submission of applications and documents
  • Implementation progress plan and completion milestones
  • Assign responsibilities for providing electricity, water and other services at the construction site

In which cases is the design, supply of technological equipment and construction contract given priority to apply?

Pursuant to Point g, Clause 1, Article 3 of Decree 37/2015/ND-CP amended and supplemented by Point d, Clause 2, Article 1 of Decree 50/2021/ND-CP, EPC contracts are given priority to apply to:

  • Complex project with high technical and technological requirements
  • The project requires synchronization and unity from design to construction
  • The project needs to ensure the quality of technology transfer

Before deciding to apply an EPC contract, the investment decision maker needs to evaluate:

  • Technical and technological requirements of the project
  • Ability to shorten implementation time
  • Synchronization between stages from design to operation
  • Project objectives and requirements have been approved
  • Feasibility of EPC contracts compared to other types of contracts
 Complex project with high technical and technological requirements
Complex project with high technical and technological requirements

Sample contract for design, supply of technological equipment and construction according to standards

A standard EPC contract needs to include the following main contents:

1. Basic information:

  • Name of project or bidding package
  • Transaction information of contractors and investors

2. General conditions of the contract:

  • Scope of work
  • Requirements for construction design work
  • Requirements for equipment procurement and installation
  • Requirements for construction work
  • Contract price, advance and payment
  • Rights and obligations of the Investor
  • Duties and powers of the Consultant

3. Specific conditions of the contract:

  • General regulations
  • Testing, calibration and commissioning
  • Acceptance process of the Investor
  • Time and progress of contract implementation
  • Details of contract price, advance and payment

The EPC contract needs to ensure clarity, completeness and compliance with current legal regulations. Terms need to be drafted carefully to avoid future disputes. The contract template can be downloaded below.

Download: Sample contract for design, supply of technological equipment and construction

Consulting services and support for developing contract for design, supply of technological equipment and construction in Long Phan

Long Phan provides professional consulting services on building EPC contracts. Our team of experts has experience in the construction and legal fields, ensuring that your EPC contract fully meets legal and technical requirements.

Our services include:

  • Consulting on required contents in the contract
  • Assist in drafting contract terms
  • Review and finalize EPC contracts
  • Consulting on the contract negotiation and signing process
  • Support in resolving problems that arise during contract implementation

With extensive experience, Long Phan is committed to providing customers with optimal solutions, helping their projects deploy smoothly and effectively.

EPC contracts play an important role in ensuring the success of complex construction projects. To build an effective EPC contract, customers need support from experienced experts. Long Phan is ready to provide professional consulting services, helping customers optimize the process from design to construction. Please contact us immediately via hotline 0906735386 for detailed advice.