EPC/EPCM Guide

Guide to EPC/EPCM Projects

Opportunities and Challenges
 EPC/EPCM Projects
EPC/EPCM Guide

Strategies for Profit

Major construction projects are large undertakings that often cost billions of
dollars. The payoff can be big, but so can the risks. Before getting involved,
you should understand how these projects work and be able to decide which
ones have the greatest potential for profit.

This guide is an introduction to Engineering, Procurement, and Construction (EPC) projects and
how METTLER TOLEDO can profit from them. Increasingly, facility owners are hiring engineer-
ing and construction contractors to manage large construction projects. The EPC model is used
globally in many industries, including some of our core market segments: mining operations
and plants in the power-generation, petrochemical, chemical, pharmaceutical, and food and
beverage industries.

The guide will help you understand the different types of EPC contracts, learn who the key play-
ers are, and understand the best strategies for profiting from these projects. To succeed in this
market, we must be able to work as a team and know what is expected of each team member.

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Contents

EPC/EPCM Contracts 4
EPC/EPCM Contractors 6
Building Your Team 8
Project Life Cycle 10
EPC Timeline 12
To Bid or Not to Bid 14
When to Get Involved 16
Reviewing Bid Specifications 18
MO/Partner Responsibilities 20
Value Selling 22
PO Capabilities – Engineering 24
PO Capabilities – Quality Monitoring 26

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 EPC and EPCM Contracts
EPC/EPCM Guide

Understanding the Differences

Large construction projects are inherently risky. With billions of dollars

at stake, facility owners are increasingly turning to large engineering and
construction contractors that have the experience and resources to complete
these projects successfully.

While EPC is sometimes used as a general term, it is Other Contracts

actually one of several types of contractual agreements, In addition to EPC and EPCM contracts, there are a few
each with different responsibilities and risks for the par- variations:
ties involved.
• Engineering, Procurement, Construction, and Commis-
EPC Contracts sioning (EPCC) contracts add a commissioning phase
An Engineering, Procurement, and Construction (EPC) to an EPC contract. During this phase, the contractor
contract gives complete responsibility to one party. The is required to test all systems before turning a facility
owner hires a contractor to handle an entire project, over to the owner.
including dealing with vendors. The contractor assumes
most of the risk for the project and is expected to deliver • Project Management Contracts (PMC) introduce a third
a fully operational lump-sum, turnkey (LSTK) facility that party to an EPC arrangement, a project manager who
meets the owner’s requirements. oversees the EPC contractor’s work to make sure that
it meets the owner’s requirements.
EPCM Contracts
An Engineering, Procurement, and Construction Man- • Build, Operate, Transfer (BOT) and Build, Own, Oper-
agement (EPCM) contract is more of a collaborative ate, Transfer (BOOT) contracts require a private party
effort. The contractor still provides engineering and de- to finance, build, and operate a facility for a specified
sign work, but its role in the later stages of the project is period before turning it over to a government or public
more limited. Although the contractor manages procure- authority. The difference is that a BOT contractor is
ment and construction on behalf of the owner, the owner paid a fee to operate a facility and a BOOT contractor
assumes much of the risk by establishing direct contrac- actually owns and profits from the operation of the
tual relationships with vendors and subcontractors. facility.

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How These Contracts Affect Us Contractor
Why should METTLER TOLEDO care about the con- The EPC contractor is concerned with designing and
tractual agreement between an owner and contractor? building the facility, not with running it. Once a facility
The answer is that the contract determines which party starts operating, the contractor’s job is finished. Under
makes the buying decisions. Although both parties are the terms of an EPC agreement, the contractor is re-
working toward a common goal, the owner and contrac- sponsible for completing the project for a fixed cost and
tor often have very different interests. Understanding within a fixed time period. The contractor is looking for a
those interests will help you develop an effective sales product that meets specifications at the lowest price and
strategy. can be delivered on time. Because the main concerns
are cost and delivery, there is less opportunity to sell
Owner based on the value that a product adds to a facility’s
The owner of a facility has a long-term stake in its ability operation.
to operate profitably. Although the initial purchase price
is always a consideration, the owner is also concerned
about total cost of ownership (TCO). You can convince
an owner to buy a more expensive product if you can
demonstrate the product’s ability to save money in the
long run. The owner is often receptive to our standard
value messages:
• Greater weighing accuracy increases revenue
• Greater reliability reduces maintenance costs
• Greater durability equals a longer service life

5
 Major EPC/EPCM Contractors
EPC/EPCM Guide

Know Who the Players Are

The best way to identify an EPC/EPCM project is to know who the players
are. Because of the size of the projects, only a limited number of contractors
have the resources to undertake them. These contractors are large
companies with extensive engineering and construction capabilities.

There are hundreds of companies that specialize in large

engineering and construction projects. We are listing
a few of the larger contractors in Asia, Europe, and the
Americas. Many are international companies. Even if a
company is based in one country, it can have offices
elsewhere and handle projects around the globe.

Asia/Pacific Orascom Construction

China Gezhouba Group Posco Engineering & Construction
China Huanqiu Contracting & Engineering Power Construction Corporation of China
China International Water & Electric Punj Lloyd
China Metallurgical Group Renaissance Construction
China National Machinery Industry Samsung C&T
China Petroleum Engineering & Construction Sinopec Engineering
China Railway Group SK Engineering & Construction
Chiyoda Sumitomo Mitsui Construction
CTCI Corporation Toyo Engineering
Daelim Industrial TTCL Public Company
Daewoo Engineering & Construction WorleyParsons
GS Engineering & Construction
Hyundai Engineering & Construction
JGC Corporation
Kajima
Kepco Engineering & Construction
Larsen & Toubro
Lendlease
McConnell Dowell
Obayashi

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Europe Americas
Abiensa AECOM
Acciona Infraestructuras Babcock & Wilcox
ACS, Actividades de Construccion y Servicios Bechtel
Amec Foster Wheeler Black & Veatch
Bouygues CB&I
Consolidated Contractors Group CH2M
Eiffage Construtora Norberto Odebrecht
Ferrovial Fluor Corp.
FLSmidth Jacobs
Hochtief AG KBR
Kvaerner Kiewit
M+W Group Parsons
Maire Tecnimont PCL Construction Enterprises
Saipem SNC-Lavalin
Skanska AB Stellar
Technip
Técnicas Reunidas
thyssenKrupp
Resources
Vinci
Resources are available to help you identify EPC/
EPCM contractors in your territory.
• The Vehicle SBU can supply a global directory that
lists design/construction firms and the types of
projects they handle.
• Third-party websites provide information about cur-
rent projects that are open for bid.

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 Global Projects
EPC/EPCM Guide

Building Your Team

Vendors who bid on EPC/EPCM projects must be prepared to make big

commitments in time and resources. To succeed in this market, you need to
build an effective team and make sure that all team members understand
their roles.

A traditional sales scenario involves a single sales terri- Read MT 018 carefully, and follow the guidelines that
tory. You deal with a local customer and sell a product govern responsibilities and sales commissions.
that is installed locally. EPC/EPCM projects often span
several sales territories, even several countries. It is not Effective Partnerships
unusual for an EPC/EPCM contractor in one country to The best partnerships make effective use of each party’s
deal with an owner in a second country to build a plant strengths. Make sure all team members understand their
in a third country. responsibilities and are informed about them early.

Because of our global presence, METTLER TOLEDO is The origin MO or partner is best equipped to handle
better equipped than most competitors to supply weigh- product application and sales:
ing systems for projects that cross borders. We have the • Quoting
resources to provide local sales and service support in • Negotiation
each territory. • Project management
• Manage documents and acceptability tests
Coordination Policy • Review specifications with PO, logistics, and order
METTLER TOLEDO assigns every territory to a specific processing
marketing organization (MO) or partner/distributor. If you
pursue EPC/EPCM work, chances are that you will en- The destination MO or partner is best situated to handle
counter a project that crosses over into another territory. service that is required after the initial sale:
• Installation
To prevent conflicts, MT has developed a guideline for • Initial scale certification
coordinating these projects (Guideline MT 018). It recog- • Preventive maintenance
nizes that a cross-border project involves costs for both • Repair, replacement, and warranty coverage
the origin (selling) party and the destination (local sup-
port) party. Both parties should share in the work and The producing organization (PO) should be involved
the profits. According to the guideline, the origin party early in the project to handle product design and
is responsible for contacting the destination party (local manufacturing:
MO or partner) to coordinate the project. • Review specifications

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• Product engineering (if required)
Resources
• Product manufacturing
Refer to the METTLER TOLEDO Origin and Destination
• Assist with documents and factory-acceptability tests
Coordination Policy (Guideline MT 018) for corporate
guidelines on managing cross-border projects. Ad-
The terms and conditions in EPC/EPCM contracts often
ditional information is available on the Cross-Border
include provisions about fines and damages. Make sure
Business Management (CBBM) SharePoint site.
that you read all documents carefully and understand
them fully before you sign anything. Your team should
include someone who is qualified to provide legal ad-
vice about the terms and conditions before you agree to
them.

Communication
Communication is essential to good teamwork. When
we work together as a team, we are better able to gain
profitable sales and service business for all parties. For
a project to succeed, all team members must under-
stand what is expected of them and must follow through
in a timely manner. EPC/EPCM contractors require ven-
dors to comply with very detailed terms and conditions.
If a requirement is not met, the contractor will not care
that one team member thought it was someone else’s
job. A lapse by any member of a vendor’s team can be
costly for everyone involved.

9
 Project Life Cycles
EPC/EPCM Guide

Understanding the EPC/EPCM Process

Rome wasn’t built in a day, and neither are large industrial facilities.
An EPC/EPCM project can take years to complete and require a major
investment of a vendor’s time. To compete successfully for these jobs, it is
important to understand the life cycle of a typical project.

1. Conception 4. Detailed Engineering

During this initial phase, the prospective owner sets the After the owner has secured capital investment, an EPC/
general goals for a project. For example, a company EPCM contractor uses the FEED documents as a basis
might decide to build a power-generation plant to supply for writing the detailed specifications that will be used
electricity for a particular city or region. for bidding. This phase is often the last chance for ven-
dors to influence the specifications. Once the detailed
2. Feasibility Study engineering has been completed, the specifications are
Before giving approval to start a major project, many frozen and can be difficult to change.
owners commission a thorough study to investigate its
viability. In addition to looking at construction costs, a 5. Procurement
feasibility study examines the facility’s potential as an Using the detailed engineering specifications, the EPC/
ongoing business, studying the market, competition, po- EPCM contractor requests and evaluates bids. The con-
tential profits, and risks. tractor’s primary concerns are a vendor’s ability to meet
the specifications while delivering equipment on time
3. Front-End Engineering and Design (FEED) and at a low cost.
FEED defines the technical requirements of a project and
estimates costs. In some cases, a consulting engineer is 6. Quality Assurance
hired to handle FEED. In others, FEED is part of the EPC/ Quality assurance is an aspect of the procurement pro-
EPCM contractor’s responsibilities. The engineer usually cess that deserves special attention. Before EPC/EPCM
divides the project into work packages for budgeting and contractors accept delivery of equipment, vendors must
planning. The FEED documentation provides the basis satisfy quality-assurance requirements by supplying ex-
for detailed engineering, procurement, and construc- tensive documentation and passing factory-acceptance
tion of a facility. Preferred vendors often help define the tests (FAT).
specifications, and changes are relatively easy to make
during this phase. FEED is critical because it helps de- 7. Construction
termine whether the owner will be able to secure capital During the construction phase, vendors are required to
investment for the project. ensure that equipment is delivered on time and that the
installed equipment passes site-acceptance tests (SAT).

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Equipment that does not meet all requirements can de- detailed engineering stage, when options are being
lay a project, forcing a vendor to pay penalties for delay evaluated and specifications are being developed. Early
liquidated damages. involvement enables you to establish a relationship with
the customer, influence the specifications, and educate
8. Commissioning the customer about your products.
During this startup phase of a project, equipment is con-
figured, calibrated, and tested. The vendor is expected to
demonstrate that the equipment functions as promised. Resources
Performance liquidated damages can be assessed if Additional information about EPC project life cycles
equipment does not meet the specified performance and contracts is available in “Understanding EPC
requirements (for example, if a scale does not weigh at Projects,” a PowerPoint presentation created by the
the specified accuracy). Vendors are often responsible Vehicle SBU.
for training operators on their equipment.

9. Operation
After startup, the owner’s concern is that the plant con-
tinues to operate efficiently. Vendors often sign service
contracts to provide regular preventive maintenance for
their equipment. They also will be required to fulfill any
warranties that are included with the equipment.

Observations
Note that procurement takes place about midway
through the process. Vendors who wait until the procure-
ment stage before getting involved have little influence
on the project’s specifications. By that time, the speci-
fications are often frozen and difficult to change. There
are advantages to getting involved during the FEED or

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 The EPC Timeline
EPC/EPCM Guide

Roles and Expectations

The following table provides a snapshot of the EPC/EPCM process. It shows

the roles played by engineers, contractors, and vendors at different phases of
the process.

FEED Detailed
Project Phases Procurement
Engineering

Timeline 4 to 6 months 1 week to 2 months 1 to 2 months

Consulting Engineer • Specification design

• Budgetary quote
EPC/EPCM • Specification freezing • Final quote
• Budgetary quote
Origin MO/Partner • Analyze needs • Provide budgetary quote • Provide final quote
• Develop solution • Deviation list responses
• Provide budgetary quote • Negotiation
Destination MO/Partner • Provide local considerations • Provide local considerations • Provide final services quote
• Provide budgetary services quote • Provide budgetary services quote

PO/SBU • Assist in specification design • Guide product selection • Guide deviation list responses
• Guide product selection

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 Quality
Construction Commissioning Operation
Assurance

6 to 12 months 6 to 24 months 1 to 2 months 10 to 20 years

• Documentation • Installation • Site-acceptance test (SAT) • Service

• Factory-acceptance test (FAT) • Training • Warranty
• Manage documentation • Shipping and invoicing • Manage SAT
• Manage and plan FAT
• Plan SAT
• Assist with documentation • Supervise installation • Assist with SAT • Service and warranty fulfillment
• Calibration and stamping
• End user training
• Assist with documentation
• Production scheduling and execution
• Assist with FAT

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 To Bid or Not to Bid
EPC/EPCM Guide

Focus on Profitable Projects

Not every project has the same potential for profit. EPC/EPCM projects
involve considerable amounts of time and work. Focus on the ones that offer
the best return with the least amount of risk.

Although EPC/EPCM projects involve more work than Terms and Conditions
smaller jobs, there are good reasons for pursuing them: Pay special attention to the terms and conditions of
• The projects tend to be large orders with considerable a contract. These documents are written by the con-
potential for profit tractor’s legal staff and often reduce the contractor’s
• This is a growing business model, and ignoring it risks financial risk by shifting it to the vendor. They spell out
losing out on an increasing amount of business contractual requirements that a vendor must meet and
• Many of the facility owners are customers that we include provisions for fines and damages. As an MO
have identified as key accounts or partner, you will assume much of the risk. Before
• The projects involve industries that we consider to be signing any agreements, it is a good idea to have an at-
our core business segments torney assess the financial risks and help you negotiate
exceptions.
Reasons for Caution
There are also reasons to be cautious. Stiff competition Standard and Custom Products
for a project leads to very aggressive bids. When a cost- Make sure you are quoting the right product. It is impor-
conscious contractor is the decision maker, the winning tant to recognize whether the specifications call for a
bid is likely to have a low profit margin. We need to be standard or custom design. If custom engineering is re-
smart about which projects we bid on and make sure quired, work with the PO to make sure that all engineer-
that our bids allow us to turn a profit. ing costs are included in the quote. Unexpected extra
expenses can turn a profitable sale into one that loses
Large construction projects can be risky ventures. To money. Unexpected extra work can lead to fines for
reduce their risk, EPC/EPCM contractors rely on very delays. Even worse, a contractor might refuse to accept
detailed specifications that require vendors to docu- delivery of equipment that fails to meet specifications.
ment their manufacturing processes and product per-
formance. Specification documents can be hundreds of Consult with the PO before accepting a project. Make
pages long. Reading the fine print is essential. When sure that the specifications are clear to everyone. Sign-
you submit a bid, you need to understand all the re- ing a contract without understanding all of its require-
quirements that you are agreeing to meet. ments can put the company at financial risk.

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Long-Term Commitment
Large construction projects can take several years to
complete. Do not count on quick returns, especially if
you get involved during the early stages of a project. It
is not unusual for vendors to spend 2 or 3 years on a
project before they get paid.

Another risk of early involvement in a project is the pos-

sibility that it might be cancelled. The design packages
and cost estimates that are developed during FEED are
often used by the owner to raise capital for the project.
If capital is not available, the project is not likely to con-
tinue beyond this stage. Even if a project is cancelled,
working with design engineers helps build relationships
that can pay off on future projects.

15
 When to Get Involved
EPC/EPCM Guide

Strategies for Success

There are advantages to getting involved at the early stages of an EPC/EPCM

project. By working with the engineers who write a project’s specifications,
you can lay the groundwork for success on current and future projects.

How early you get involved in a project often depends construction work. A good relationship with a contractor
on your relationship with the consulting engineer or EPC/ increases your chances of being invited to participate.
EPCM contractor. Establishing partnerships with local When you join a project at the detailed engineering
firms increases your chances of becoming a preferred stage, you have less opportunity to influence the speci-
vendor and being invited to submit bids. While early in- fications than vendors who participated in FEED. The
volvement can give you an edge, there are strategies for project’s needs have already been identified and an ex-
successful bidding at various stages of a project. pected solution has been defined. Nevertheless, creative
vendors can still get their solution considered before the
Front-End Engineering and Design (FEED) specifications are frozen.
Regardless of whether FEED is handled by a consulting
engineer or EPC contractor, there are benefits to getting Procurement
involved at this stage. By providing input during FEED, Waiting until the procurement stage to submit a bid can
you can influence a project’s specifications. There is put you at a disadvantage. By this point, the specifica-
an excellent opportunity to promote your solutions and tions are frozen and might favor another vendor’s prod-
educate the designer about the hidden costs and risks uct. EPC/EPCM contractors who have preferred vendors
of other solutions. The SBU can help you put together sometimes request bids from other vendors just because
presentations or lunch-and-learn sessions for designers. several bids are required. Price is a key factor in the
Participating in FEED is a good way to build relation- negotiations, but EPC/EPCM contractors also consider
ships with design engineers. These relationships give quality and delivery. You can increase your chances of
you the inside track when the actual buying decisions landing a job at this stage if you demonstrate the ability
are made, especially if FEED is handled by the same to simplify the contractor’s job by assisting with docu-
firm that is responsible for procurement. mentation, inspections, acceptance tests, delivery, and
installation. Our global resources are a plus on interna-
Detailed Engineering tional jobs.
Projects that progress to the detailed engineering stage
have been approved and funded. If a consulting engi- Maintain a Pipeline
neer handled FEED, then several EPC/EPCM contrac- Because large construction projects have long life
tors might be bidding for the detailed engineering and cycles, it can be several years before vendors are paid.

16
Keeping a steady flow of jobs in your pipeline will help
Resources
you maintain predictable year-on-year revenues. We rec-
Contact your local SBU representative for help giving
ommend a two-pronged strategy that includes building
lunch-and-learn or other presentations to EPC/EPCM
relationships with design engineers and contractors.
customers. Presentations can be tailored to a specific
customer.
Engineers: To get invited to participate in projects at the
earliest stages, you need to build relationships with de-
sign engineers. Designers are looking for solutions, so
demonstrate your expertise and educate designers about
the value that your solutions add to a project. Because
it can take several years for your work on an individual
project to bear fruit, the success of this long-term strat-
egy depends on your ability to participate in a constant
stream of projects.

Contractors: Working with designers does not guaran-

tee that you will land every job. It is equally important to
build relationships with contractors. By demonstrating
your ability to execute work quickly and without mis-
takes, you increase your chances that a contractor will
select your product at the detailed engineering or pro-
curement stage of a project. This strategy reinforces your
efforts with designers and helps you win projects with a
quicker return.

17
 Reviewing Bid Specifications
EPC/EPCM Guide

Understand the Expectations

The bid specifications for an EPC/EPCM project are very detailed documents
used to solicit bids from vendors. They spell out exactly what equipment and
documentation a vendor must supply and what performance requirements the
equipment must meet. Vendors need to review the specifications thoroughly
and understand what is expected of them.

Bid specifications are written to reduce the contractor’s Work with the PO to determine which items are accept-
risk by requiring a vendor to document all aspects of able and which ones we should negotiate. Here are a
its products and manufacturing processes. To a vendor few common requests that we normally want to elimi-
who is used to less demanding projects, these specifi- nate from specifications:
cations can seem like overkill. Very detailed specifica- • Requests for proprietary manufacturing drawings
tions are meant to ensure quality, but they also tend to • Requests for documentation in multiple languages
shift risk from the contractor to the vendor. • Requests to store equipment for an extended time

It Pays to Be Thorough Request Additional Information

The origin MO or partner must review the bid specifica- Make sure that we have copies of all applicable specifi-
tions thoroughly. As the party that is responsible for cations. Contractors often refer to separate specification
paying fines and damages, you must have a clear idea documents without including copies of those docu-
of exactly what you are agreeing to supply. Compare ments. For example, the bid specifications might state
the contractor’s requirements with what the PO is able that all welds must be in accordance with a particular
to provide. Requirements that look minor on paper can welding standard. Request copies of any specifications
jeopardize a sale if we cannot meet them. For example, or standards that we will be required to meet, and review
some customers specify a country of origin for products them with the PO.
or materials. If you overlook a detail like this, a customer
might refuse delivery of your product. Charge for Extra Work
The extra work required for an EPC/EPCM project costs
Keep in mind that EPC/EPCM contractors are not experts money. Before submitting a bid, determine how much
on weighing. To be safe, they sometimes include speci- time and effort you will need to put into a project. Your
fications that are useful for other types of equipment but bid should include charges for any extra work, such as
offer little value for a weighing system. For example, a project management, nonstandard documentation, and
requirement to calibrate a vehicle scale at the manufac- special tests.
turing plant adds cost but no value. By educating the
contractor, we have a good chance of eliminating this
type of unnecessary requirement.

18
Strategies
Resources
A project’s bid specifications can seem overwhelming.
We can provide sample contracts from past EPC/
There are several strategies that you can use to simplify
EPCM projects. These contracts give you an idea of
the process of reviewing specifications:
what to expect in the way of product specifications
and customer requirements for reference documents
• Ask the contractor to identify which specifications
and quality assurance.
apply to the equipment that METTLER TOLEDO will
supply. The specifications package is likely to cover
material that is not relevant to the products you will
be quoting. By focusing on the relevant specifica-
tions, you can use your time more efficiently and put
together a better bid.

• Ask the contractor to review our product specifications

to see if they meet the project’s requirements. The
contractor should have a clear idea of what will or will
not meet the specifications. If possible, have the con-
tractor sign a document indicating that our proposed
products and documentation satisfy the requirements.

19
 MO/Partner Responsibilities
EPC/EPCM Guide

Project Management

An EPC/EPCM project requires more than the ability to sell. It involves

considerable work to meet the customer’s specifications. To pursue EPC/
EPCM projects successfully, MOs must be willing to dedicate the resources
necessary to manage projects from start to finish.

The origin MO/partner is the project manager. Responsi- members to make sure the requirements are satisfied.
bilities include understanding all the customer’s require-
ments, identifying the team member who will fulfill each The following checklist shows who is usually responsi-
requirement, and working with the customer and team ble for key tasks that are required for EPC/EPCM projects.

Task Origin MO/ PO EPC or End Destination

Partner Customer MO/Partner
Solution development    
Product information 
Reference projects  
Customer quote for product, installation, and service  
System integration   
Quality documentation 
Site-specific drawings (other than product drawings)  
Plant inspections and ITP 
Third-party equipment   
Customer-specific tags  
Ensure project meets local W&M requirements  
Ensure all contract requirements are met 
Penalties listed in the contract 
Scale certification 
Training  
Service  
Warranty  

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 1 2 3 4 5 6
Sales Qualify Analyze Demonstrate Develop Close Get
Lead Lead Needs Value Solution Sale Revenue

The graphic shown here indicates the stages of a typical Types of Contracts
METTLER TOLEDO sales process. The sales process will also be affected by the type of
customer you are dealing with and the type of contract.
An EPC/EPCM project complicates this process by add-
ing a considerable amount of work during stage 5. • FEED Contracts: Consulting engineers are involved
Instead of a simple negotiation that closes the sale, at the early stages of a project and are interested in
expect stage 5 to be a lengthy process that includes the evaluating potential solutions. They can be good lead
following: generators, but there is no guarantee of success at
• Negotiate complex terms and conditions later stages.
• Submit extensive documentation
• Potential design changes • EPCM Contracts: Relationships with EPCM contrac-
• Inspections and acceptance tests tors can help you generate sales leads at early stages
• Purchase order will be released only after all require- of a project. Even if you do not get involved until the
ments are met procurement stage, a good relationship can help you
overcome frozen specifications.

• EPC Contracts: EPC contractors profit by purchasing

equipment that meets the minimum specifications at
the lowest price. Unless you have a good relationship
with a contractor, negotiations tend to focus on price.

21
 Value Selling
EPC/EPCM Guide

Capabilities that Set Us Apart

Price does not always have to be the deciding factor. EPC/EPCM contractors
are required to coordinate every detail of complex projects, so they
understand the value of vendors who make their jobs easier. Promoting our
full range of capabilities can be an effective sales strategy.

Expertise Compliance
As an industry leader in weighing technology, METTLER EPC/EPCM specifications can include demanding
TOLEDO has the expertise to help EPC/EPCM contractors compliance requirements. In addition to weights-and-
make informed buying decisions. An important part of measures certification, products often are expected to
building relationships with these customers is educat- meet special standards related to performance, material,
ing them about the value that our products bring to their fabrication, and operation in hazardous areas. METTLER
projects. Take advantage of our library of sales tools and TOLEDO has the experience with regulatory compliance
the availability of your local SBU representatives to help to provide quality assurance and certification. We also
you make presentations. offer software solutions that can meet an operation’s
requirements for traceability.
Delivery
EPC/EPCM contractors are looking for vendors who do Uptime and Performance
more than supply products. They expect vendors to help The METTLER TOLEDO global service network is uniquely
them avoid delays and cost overruns by managing proj- qualified to support customers in every corner of the
ects effectively. When bidding on a job, MOs and part- world. We can provide a complete service program tai-
ners should stress their project management capabilities lored to meet the customer’s needs:
and the global resources that METTLER TOLEDO brings • Regular service to ensure high performance
to the table. As the origin MO or partner, you are the • Preventive maintenance to eliminate downtime
project manager and the point of contact between the • Advanced diagnostics to simplify service
customer and your team. That role involves coordinating • Emergency repairs to solve problems quickly
everything from the initial development of a solution to • Warranty coverage to eliminate replacement costs
the final delivery and testing of products. You will need
to stay on top of the job, making sure all the i’s are dot-
ted and t’s are crossed.

22
Resources
• Presentations for lunch-and-learn sessions
• Handbooks and buying guides
• Calculators that show the financial impact of our
products
• White papers with detailed technical information
• Product documentation and drawings

23
 PO Capabilities
EPC/EPCM Guide

Engineering and Production

The PO is more than just a manufacturing plant. It is an important team

member that contributes at various stages of an EPC/EPCM project. To ensure
a profitable partnership, you need to understand the PO’s capabilities and
how they complement the work that you do.

If you are involved during the FEED or detailed engineer- In some cases, METTLER TOLEDO products must interact
ing stages of a project, the PO can provide valuable with other systems. For example, a railroad scale might
assistance. By working with the design engineer, the PO need to be designed so that it can be used with another
can help to develop a solution and shape the specifica- vendor’s rail-car indexer. The PO’s engineering team can
tions that will be used for procuring equipment. Input work with other vendors to ensure that an ETO design
during these early stages improves your chance of suc- will meet performance requirements while functioning as
cess when it is time to bid on a project. part of a larger system.

Engineering Capabilities Overall Capabilities

Regardless of when you get involved in a project, you Engineering is just part of what the PO can contribute
need to read the specifications carefully. If one of our to an EPC/EPCM project. Here is a brief overview of PO
standard products will not meet the specifications, work capabilities:
with the PO to explore the possibility of custom design- • Assisting with product specifications
ing an engineer-to-order (ETO) product. Keep in mind • Designing ETO products
that any deviation from a standard design requires ad- • Manufacturing products
ditional work and cost. ETO work must be defined and • Providing documentation
factored into a bid before a contract is signed. Ignoring • Assisting with in-plant inspections
this requirement opens the door to costly problems at • Assisting with acceptance tests
later stages of a project.
The Heavy-Capacity PO has extensive standard docu-
ETO Design Work mentation that can be submitted to satisfy EPC/EPCM
When ETO work is involved, the PO’s engineering team contract requirements:
will evaluate the requirements and suggest a solution.
After the solution has been approved and a contract has Engineering and Calculations
been signed, they can begin the engineering work. Along We have detailed information about the design and con-
with the ETO design, the team can produce the custom struction of our standard products. These documents are
drawings and documentation that the EPC/EPCM con- often included in bid packages and can be instrumental
tractor requires before accepting the equipment. in landing jobs.

24
Engineering Drawings
Resources
We have complete drawings for standard products and
We have compiled a library of resources to help you
their individual components. Be careful when signing a
compete for EPC/EPCM projects:
supplier drawing and data commitment form or similar
• Plant background, procedures, and certifications
document. Check with the PO first to make sure that we
• Product design calculations and certifications
can supply all the drawings listed on the form.
• Samples of inspection test plans and other quality-
assurance documents
Weighbridge Calculations
You can find these resources on the Global Docu-
Our weighbridge designs are based on extensive calcu-
mentation Site.
lations and tests that verify their strength and suitability
to handle the heavy loads placed on them. We have
detailed documentation of the calculations, including
design load, design stress, and deflection.

Foundation Calculations
We have calculations for our concrete foundation de-
signs, including design load and soil bearing pressure.
It is important to note that the concrete will be supplied
and poured by a contractor who will be responsible for
following all guidelines.

Engineering Plan and Procedures

For ETO products, we can develop an engineering plan
for the customer’s approval. We maintain strict engineer-
ing procedures and can supply full documentation, in-
cluding information about the standards we comply with
and the design tools we use.

25
 PO Capabilities
EPC/EPCM Guide

Quality Monitoring

EPC/EPCM contractors require vendors to meet detailed specifications and

supply extensive documentation. Those requirements are the contractors’
way of verifying that the equipment they are purchasing meets quality
standards.

Quality Monitoring • Review of drilling procedures

EPC/EPCM contractors place special emphasis on docu- • Review of welding procedures
menting the manufacturing plant’s capabilities and the • Factory-acceptance test (FAT)
quality of the equipment that the plant is supplying. Doc- • Paint inspection and testing
umentation of a plant’s capabilities is often required dur- • Visual inspection of all components
ing the bid process. Other documentation needs to be
compiled based on testing and inspections performed The PO needs to be fully aware of the ITP requirements
during the manufacturing process. In both cases, it is in order to supply the necessary documentation. Any
important to know what the PO can provide before you fees that are involved for third-party certification must be
bid on a job. included in the quote.

Plant Background Material Certification

The first step in many quality-monitoring procedures is The PO can supply certification of the material’s origin
demonstrating that the manufacturing plant can produce and quality, for example, independent mill test reports.
equipment that meets a project’s specifications. The PO
can supply ISO reports, facility summary, quality plans, Welding Certification
and documented work procedures. The PO can supply welding procedures, weld maps, and
certifications for individual welders.
Inspections
The EPC/EPCM contractor will develop a detailed inspec- Paint Certification
tion and test plan (ITP) that spells out the requirements The PO can supply documentation of its painting pro-
for inspecting equipment. The ITP is designed to provide cess and paint quality.
objective evidence of the quality of a product. Until the
inspectors sign off on every item on the list, the prod- Metrological Certification
uct cannot be shipped. The PO can assist with the ITP, The PO can supply weights-and-measures certificates
which often includes the following items: and load cell test reports.
• Review of drawings
• Review of material certificates

26
Quality Documentation Checklist Some types of documents are not applicable to every
The following table lists the major types of documents PO’s products. Familiarize yourself with the documents
that EPC/EPCM contractors request. Before making any that each PO can supply.
commitments, give each PO that is involved in your proj-
ect a list of documents that will be required.

Item Description Required Not Required

1 Welding Procedure Qualification Record (PQR)
Welding

2 Welding Procedure Specification (WPS)

3 Weld Map
4 Inspection Test Plan (ITP)
Inspection
Tests and

5 Factory-Acceptance Test (FAT)

6 Site-Acceptance Test (SAT)
7 Plant ISO Certificate
Documentation

8 Weights and Measures Certificates

9 Calculations
10 Load Cell Test Reports
11 Internal Quality Documents
12 Positive Material Identification (PMI)
Materials and

13 Nondestructive Evaluation (NDE)

Coatings

14 Blast Profile Checks

15 Paint Quality Checks and Thickness Reports
16 Material Certifications

27
Contract Review Checklist
Be sure to review these items with the PO before signing an EPC/EPCM
contract.

Item Description Yes No

1 Have you contacted the destination MO/partner?
2 Does the destination MO/partner have the
capabilities to meet contract requirements?
3 Does the product quoted meet W&M
requirements?
4 Does the customer require site-specific
documents?
5 Does the customer require site-specific tags?
6 Are inspections required?
7 Have you reviewed the freight terms with the PO?
8 Are there penalties for late delivery?
9 Is the PO required to supply quality
documentation?
10 Does the product documentation need to be
translated?
11 Have you discussed the solution with the PO to
make sure it meets the customer’s needs?
12 Are the payment terms acceptable to your MO?
13 Is the PO required to participate in project
meetings?
14 Is on-site training required?
15 Do all of the products on the purchase order need
to be consolidated at one plant prior to shipment?
16 Has someone from the legal group reviewed the
contract?

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For more information

Mettler-Toledo, LLC
1900 Polaris Parkway
Columbus, Ohio 43240
Tel. (800) 786-0038
(614) 438-4511
Fax (614) 438-4900

Subject to technical changes

© 2016 Mettler-Toledo, LLC
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