Ers ecsm contracts. Gazprom is preparing large-scale reductions in the central office

In the Russian Federation and the CIS countries, the concept of EPC / EPCM contract and contractor is at the stage of implementation. in international engineering standards, there are many terms and definitions for the concept of EPC \ EPCM. None of them fully describes the various approaches that are used in the design and construction of new enterprises and engineering structures. Unfortunately, there are no uniform terms and definitions that would most fully describe the entire set of production processes.

Choosing to use the correct form of contract can have a significant impact on the costs and risks associated with the construction of large projects. Construction costs vary in proportion to the risk that the customer is willing to assume. The lower the level commercial risk the owner is willing to face, the higher the level of construction and project management costs. in business, this logically follows from the risk-reward link.

The two most common types of work contracts are turnkey EPC contracts and EPCM contracts. There are several options for these approaches that can be adapted in accordance with the requirements of each individual project, for example, EPCC - Engineering, Procurement, Construction and Commissioning.

DEFINITION AND COMPARISON OF EPC / EPCM CONTRACTS

EPC(Engineering, Procurement and Construction - design, procurement of equipment and construction): means that the EPC contractor, according to the contract, undertakes to provide the customer with turnkey services for the design, procurement of equipment and construction of the facility. Projects under this form of contract are mostly under the control of the contractor and outside the direct control of the customer. The contractor under the EPCsam contract concludes all contracts directly with contractors.

Also, an EPC contractor, subject to the necessary experience, personnel, engineering knowledge and construction equipment, can perform work under an EPC contract without involving contractors. These companies are called full cycle EPC contractors. ZAVKOM is a full cycle EPC contractor.

EPCF(Engineering, Procurement, Construction and Financing - design, procurement of equipment, construction and financing): means that the EPCF contractor, according to the contract, undertakes to provide the customer with design, procurement and construction services, and will finance the project from its own or external sources.

EPCM(Engineering, Procurement and Construction Management - design, procurement and construction management): means that the EPCM contractor, according to the contract, undertakes to provide the customer with management (process management) services for design, procurement and construction. in this case, the customer personally enters into contracts with contractors for design, procurement and construction. These processes (design, procurement, construction) are managed by the EPCM contractor on behalf of the customer.

EPC and EPCM are the most common types of contracts in the construction industry. Depending on the level of risk that the customer of the project is willing to assume, budget constraints and the scope of authority, the customer determines which of the contract types is most suitable for the project.

FEATURES OF CONTRACTS

Benefits of EPC Contracts:

• Minimal financial and legal risks
• Acquisition of all the necessary "services" from one supplier: the EPC contractor is the only legally and financially responsible person to the customer
• Non-interference in the project
• Minimal need for recruiting personnel and setting up a construction management

Benefits of EPCM Contracts:

• The total cost of the project is 5-10% lower
• A sense of belonging among the customer's employees
• Greater control over the project
• Financing flexibility

Typical EPC project

Typical EPCM project

Differences in types of contracts

Each of the customer companies, when deciding to start the construction of the facility, must make a choice for themselves - which type of contract suits it best. The choice is made based on the assessment of legal and financial risks for each specific situation. Below is a simplified diagram that demonstrates the differences between the two types of contracts.

Today, a sacramental phrase is often uttered about the underdevelopment of the construction engineering market in Russia, that it is just beginning to take shape and that it is still necessary to go a long way for our engineering companies to be able to compete with their world-class colleagues. You can find many reasons for this state of affairs, including a long period of investment decline in many sectors of construction, loss of human resources for designers, designers and builders, obsolescence and backwardness of the industrial and technological base of building materials. But the main reason for the majority of managers and experts is the existing pricing system in the Russian Federation, which does not meet the requirements for the development of full-fledged engineering and project management. In the best case, they consider the costs of engineering within certain minimum figures - for the maintenance of the services of the customer and the general contractor, withdrawn by the once Soviet Gosstroy.

Meanwhile, with a serious approach to business, today it is no longer necessary to prove to anyone that the construction services market will continue to professionally diversify, and its main participants will gradually agree on the formation of the cost of their services in accordance with the level of risk and responsibility for the constructed object. The following types of companies in the construction industry can be unambiguously distinguished, which will gradually enter the pyramid of the construction services market and begin to compete within a narrow specialized professional niche, and the best of them will subsequently make the weather on the construction services market:

1. Developers of all kinds.

2. Engineering companies (design, design management, designer and technical supervision, commissioning, construction support, etc. services).

3. EPC / M contractors.

4. Specialized line construction companies.

5. Construction retail.

There is no pure general construction contractor in this list, since his functions will harmoniously fall within the circle of interests of EPC / M-contractors and will become an integral part of the general list of their competencies. The existing pricing system, by and large, is only suitable for the last two or three levels, and then with a big stretch. Pricing in deals with global construction contractors is most often done through a tender, which provides some rationale for a fixed price on a very virtual basis. Pricing issues for all options for high-level construction contracts in the investment and construction process (development, EPC / M contracts and general construction contracts) are the main topic of this article.

To smoothly move on to the discussion of the main problem, we will try to fix the terminology used. In the context of this article, the investment and construction process is understood as a certain sequential set of stages in achieving investment goals through the implementation of investment projects in the field of creating and / or changing real estate objects. The investment and construction process, like any process in general, is a sequential change in the state of an object over time, therefore, the presence in a construction contract of payment for services for competencies that provide support for each stage is an important price dominant. In general, the investment and construction process is a logical sequence of stages in the implementation of an investment project, which can be narrowed down to nine main positions (see Fig. 1). An investment and construction project hereinafter is understood as any time-limited investment enterprise aimed at creating a new unique property, the presence and use of which is necessary to achieve investment goals.

Fig. 1. Basic investment and construction process

In the general case, the basic investment and construction process makes it possible to quite clearly outline the specifics of a complex construction contract, which obviously presupposes the presence of lower-level performers and the division of work between all participants according to the types of construction specialization.

To reveal the problem of pricing in construction engineering, it makes sense to formulate a certain model for analysis. As an example, you can choose a modern construction and engineering company that positions itself in the EPC / M-services market, but at the same time fulfills separate contracts for general construction, design and supply.

Typical EPCM contract

EPCM- the English abbreviation (engineering, procurement, construction management) stands for engineering, procurement, construction management. The subject of the contract, as in the case of EPC, is design, equipment, construction and handover to the customer of a fully finished turnkey facility. The EPCM contractor is the general contractor, i.e. he concludes contracts with subcontractors on his own behalf.

EPC / M-contractor is a general contractor fully performing investment project and assuming the risks of project management from the moment of design and until the transfer of the finished object to the customer, including the fulfillment of warranty obligations (see Fig. 2). The EPCM contract provides for the final approval of the total cost of the project, taking into account the remuneration of the EPCM contractor, and a clear definition of a fixed date for putting the facility into operation, as well as a detailed description of the main technical parameters of the facility. Method (approach) EPCM allows you to manage the project, and not specific work. Specific work is performed by professionals. The task of EPCM is to assess the correspondence of the properties (capabilities, professionalism, labor resources, etc.) of the selected contractors / suppliers to the needs of the task, and also correctly distribute the scope of work and areas of responsibility between them. Further - to coordinate their actions, resolve controversial issues, plan the general scheme of the project, change plans in case of critical changes with minimal consequences and reducing the time of possible downtime.

Fig. 2. Implementation of projects through the EPCM contract.

The main quality of an EPCM contractor is his experience and skills in organizing construction and procurement works and hiring personnel for the management and integration of contractors' labor. This model is ideal in a situation of high growth in the cost of labor or basic materials and components, i.e. when the contractor is not willing to bear the risks associated with the fixed price activity. But the development of the EPC / M-contracting market in Russia is still very unstable, the main players nominating themselves for the role of participants in the EPC / M-services market, in fact, perform the functionality of an extended general construction contract. Real implementation experience and engineering competencies require a radical revision of the relationship between customers and EPC / M-contractors - both in terms of the approach to the pricing of construction contracts and in terms of developing flexible contractual tools for the implementation of investment and construction projects.

An example for understanding

Imagine that a customer signed a contract with an EPC / M contractor for 1 billion rubles excluding VAT. The structure of the contract price assumes a ratio of 10/40/50, where 10% is the approximate share of R&D, 40% is the cost of building materials, structures and equipment for installation, 50% is the total cost of construction and installation work, including the operation of machines and mechanisms, the maintenance of the management apparatus and other expenses. It is unambiguously assumed that the EPC / M contractor does not perform the work himself, but performs the functions of the project operator and bears all the risks of its implementation. To carry out the work, he concludes contracts with the general designer, the operator of production and technological equipment and the general contractor. The listed companies are already the second level of management of the corresponding sites, which, in turn, presupposes the presence of subcontractors of the lower level. We will also assume that all three levels of EPC / M-contracting are prudent companies and assume a net profit of 10% of their own volume of work performed.

Now we will work out all the levels in order (see Fig. 3):

1. The EPC / M contractor receives 10% of the profit from the contract price, which is 100 million rubles, the remainder for distribution among the participants of the 2nd level - 800 million rubles, since another 100 million rubles are his own costs.

2. The share of the general designer is 80 million rubles, and his profit is 8 million rubles. He leaves 70 million rubles for the entire pool of sub-designers, who generally make a profit of 7 million rubles.

3. The operator of the production and technological equipment does everything himself, therefore his share is 320 million rubles, and his profit is 32 million rubles, respectively.

4. The general construction contractor receives 400 million rubles, of which 40 million rubles are his profit, and 60 million rubles are his own management costs. The services of subcontractors will cost 300 million rubles, and in total they will receive 30 million rubles in profit.

Thus, summing up the total profit of the contract (100 + 8 + 7 + 32 + 40 + 30), we get 217 million rubles of net profit in the price of the EPC / M-contract or 21.7% of the total cost excluding VAT. Taking into account the taxation of profits, the share of the total profit before tax in the contract price can reach 28-30%. This begs the question, how much of planned savings and normative profit in the classical estimated pricing system can justify such a profit? The same applies to overhead costs, which are generally calculated on the basis of direct costs and in no way include the real costs of participants at all levels of the investment and construction process.

It is clear that in such conditions, such an EPC / M contractor who does most of the work on its own, or the participants of the second and partly the third level are structural subdivisions of the EPC / M holding, can win the tender (reduce the total profit). But even in this case, the existing pricing system does not cover the market requirements for contracts, and the construction market itself is losing the middle performing sector, because either large construction contractors or construction retail companies will actually function on it.

If we consider that the existing pricing system in construction is generally focused on the end contractor (a specialized linear subcontractor), who receives all the income in the form of planned savings, then a logical question arises about the need for additional incentives for those who take responsibility for managing the contract in the whole.

Fig. 3. Scheme of the formation of the total profit of the EPC / M-contract

Thus, the first problem of pricing in construction is the effective calculation of the estimated profit, which allows ensuring a reasonable level of profitability for all participants in the investment and construction process without prejudice to the structure of the construction market. The presence on the market of participants of all levels and types ensures a harmonious combination of supply and demand, both sectoral and geographically. Large financially stable construction holdings must bear global contractual risks and not take jobs away from more flexible but less well-off specialized lower-tier line companies.

Where does the profit come from?

The situation in which an independent EPC / M contractor finds himself, who specializes in managing the entire project, and does not perform most of the work on his own, reminds of the constant need to prove to the customer and the investor the existence of additional costs for management, risk coverage, project coordination and organization of work. in full. If the customer believes that the contract is based on the existing estimated pricing method, then the EPC / M contractor has no choice but to retain a share of the contract price agreed in the estimated parameters. The real policy is reflected in the scheme for making a profit for the construction general contractor (see Fig. 4). The EPC / M contractor adds a design element, but the principle of making a profit does not change.

Fig. 4. The scheme of obtaining real profit by the construction general contractor
(Click image to enlarge)

Thus, it becomes clear that the estimated profit included by the general contractor in the calculation is not at all the same as the real profit that the main contractor will receive at the end of the contract. How a positive margin difference is formed between the price of the contract of the general contractor and the subcontractor can be understood from the following approximate list of planned discrepancies:

1. The difference in the average monthly wages workers

2. The difference in the average category of work performed

3. The difference in accruals of travel to the place of work, travel and rotational costs

4. Difference in the cost of material resources (for example, using cheap stocks or paid for deliveries in the future)

5. The difference in the cost of materials and structures (discounts for wholesale and volume after the conclusion of the contract)

6. The difference in logistics (one volume of transport and procurement and other costs was agreed with the customer, and the data is received from the subcontractor after the fact)

7. The difference in the cost of a machine-hour of agreed construction equipment (imported is agreed, in fact used domestic, used)

8. The difference in costs for measures for labor protection, industrial safety and ecology

9. The difference in the procedure for determining the contract price (for the customer - fixed with significant coverage of risks, for the subcontractor - according to estimates or unit prices)

10. The difference in the amount of work according to estimates (for example, the customer is handed over work that has not actually been performed by the subcontractor without compromising the quality of construction)

11. The difference in the production technology and organization of work contracted from the customer and executed in fact by the subcontractor

12. Use of advanced production technologies, not specified at the time of the tender, but subsequently used at a fixed price

13. The difference in payments for accommodation, VZIS and other overhead costs (at the customer - by percentage, at the subcontractor - in fact)

14. The difference in base prices (for example, at the customer - according to federal regulations, at the subcontractor - according to territorial, or vice versa, depending on the strategy of making a profit)

15. The difference in the composition of overhead costs, involving compensation for the risks of the general contractor and professional engineering

16. The difference in the methodology for calculating the indices of the transition from basic prices to current prices(for example, at the customer - according to representative materials, at the subcontractor - according to the full specification), etc.

For an EPC / M contractor, the number of such profit-making points is increased by corresponding components for equipment supply and design. It also has its own specifics, which allows the project structure of the EPC / M-contractor to provide not only its own content, but also the receipt of net profit. The question is to what extent the lower-level performers agree with the proposed scheme.

Ultimately, the task facing the general contractor comes down to how to correctly calculate not only the marginal, but also the planned net profit, subject to the approval of the tender proposal based on the existing methodology for calculating the estimated cost. Indeed, the standard items of overhead do not take into account the significant management costs that are currently burdened by the services of the EPC / M-contractor, and the "smearing" of salary invoices from the items of the construction estimate actually impoverishes the possibilities of lower-level subcontractors. The same goes for the estimated profit. It is practically impossible to stretch the estimated profit, which is most often calculated on the basis of the wage fund for direct production workers, to all participants in the construction. This especially affects the work of the topmost link, i.e. An EPC / M contractor or a general construction contractor, whose staff should include the most qualified, and therefore expensive, specialists.

From the foregoing, it is possible to formulate the second pricing task in EPC / M contracts - namely, the need to form a pricing mechanism for the services of general contractors and EPC / M contractors that is transparent for all participants in the investment and construction process. This mechanism should have several options for implementation in contract pricing, depending on the specific indicators of the project and the stage of its implementation. In addition, the mechanism should provide for the possibility of competitive competition among participants, in which it would be possible to unambiguously compare the elements of the contract price outside the pricing field of the building and project blocks.

Contract price balance

In order to determine the regulatory need to cover the costs of an EPC / M contractor or a general construction contractor, we will try to push off from the marginal income, which should ensure the normal functioning of the general contracting business. For this, it is advisable to learn how to make up the so-called balance of contract price, which is the basis for calculating the marginal profitability of the first contractor when agreeing on the terms with the customer (see Fig. 5).

It's no secret that the prices for the construction of the same object from different applicants for a construction contract under fixed conditions and restrictions in pricing should be in a narrow relevant range, and ideally they should be the same. In fact, the difference in price offers will be caused not only and not so much by the use of new technological solutions, differences in salary expectations and the values ​​of operating costs of mechanisms, but in the system for calculating the desired amount of marginal profit (i.e., the sum of conditionally fixed costs and net profit before tax) of the first contractor.

Fig. 5. The balance of the contract price of the general construction contractor

Of course, experienced engineering companies can draw up an optimal construction schedule based on implemented analogs and calculate not only the planned costs of maintaining the head office and remote offices, temporary buildings and structures, but also the necessary profit that would allow the owner to compensate investments in the construction business in accordance with the market level. risks. And if we also take into account the approved internal documents Since the company has a policy of social motivation of personnel, financed from profit, the expected value of the net profit from the contract finally takes visible shape.

On the basis of these indicators, the planned marginal profit of the contract is formed, which will not only be a guideline for further work with lower-level subcontractors, but also a source for calculating the performance indicators of the work of its own divisions and their managers in the implementation of the contract.

Practice suggests that the planned marginal profitability directly depends on the duration of the contract, the volume of initial investment and decreases as the value of the contract grows. Some empirical dependence of the relative marginal yield of the contract on its duration and value for an average EPC / M company with a turnover of 10 billion rubles per year and a net profit within 7% of the execution volume is shown in Fig. 6.

Fig. 6. Relationship between margin profit and the cost and duration of the contract

This small observation shows that for general contractors of all levels, the margin profitability may well be standardized, moreover, it can be tariffed depending on the type of contract, the complexity of the project, and even the remoteness of the construction site. Formation and calculation required parameters and base values ​​may well become estimated standard in addition to existing rates for other works.

The problems of pricing discussed above when drawing up contracts by a top-level general contractor and the ways to solve them can be logically stated in the form of the following theses:

1. The level of estimated profit, calculated for direct performers at established prices, is not the correct value for determining the size of the general contractor's profit, therefore the latter requires a special normative assessment and accounting for the corresponding additional costs;

2. The overhead costs of the general contractor should be derived from the calculation of the estimated norms of the direct executors of the work and normalized according to separate prices;

3. It is necessary to create a unified mechanism for calculating and accounting in the contract price of the costs of the construction general contractor or EPC / M-contractor in accordance with the volume of risks;

4. The general contractor's marginal profit can be normalized and reduced to the estimated costs of design, supply and construction in the form of standard coefficients, which will increase the transparency of tenders and provide visible competition between bidders when playing to lower these standards;

5. Overhead costs of the top-level general contractor are accounted for hierarchically; as the volume of work and risks increase, they are assessed as an increase in marginal profitability from the next stage to the previous stage.

In the general case, such a problem is solved by using special coefficients, the use of which is better represented in the form of the following series of formulas:

where: EPC - the cost of the EPC / M-contract;

DP - Design Price;

EP - Equipment Price;

CP - Construction Price.

In this case, for example, the construction cost is calculated as:

where: CP - Construction Price;

DC - Direct Costs;

OC - ​​Overhead Charge;

P - estimated profit (Profit).

where: DC - Direct Costs;

MC - the cost of building materials (Material Costs);

MO - the cost of operating machines and mechanisms (Machine Operation)

WP - salary of construction workers (Worker Payment);

Wherein:

where: FC - any additional costs compensated by the Customer in fact (Fact Costs).

In other words, in the overhead costs and profits of the direct performers, the EPC / M-contractor's marginal profit is simply absent. Thus, in fact, the additional overhead costs and profits of the general contractor are contained in the amount agreed with the customer and the costs covered by him. In reality, other ways to generate additional profit without special tweaks are almost impossible. If we assume that the profit of the general contractor will not be affected by the difference in cost in other sections, then in fact today the price formula for the EPC / M-contract should look like this:

where: OC '- overhead costs of the EPC / M-contractor;

P 'is the profit of the EPC / M contractor.

where: MP is the EPC / M contractor's marginal profit.

Thus, the formula "number one" for the EPC / M-contractor should be as follows:

where: EPC '- real value EPC / M-contract, calculated with the separation of marginal income;

Assuming that the costs of design, supply of equipment and the estimated calculation of the cost of construction can be considered as independent budgets of the respective contractors, the marginal income of the EPC / M contractor, in accordance with the hierarchy principle established above, could look like this:

where: DP ’- design cost for the EPC contractor;

EC '- the cost of equipment, taking into account the income of the EPC contractor;

CP '- the cost of construction, taking into account the invoices and the profit of the EPC / M-contractor.

The standardization of calculations may well fit, as mentioned earlier, into tariff coefficients and prices, for example, in the following form:

k 1 - coefficient of design work management (depends on the ratio of the amount of work performed on its own and the amount of work performed with the involvement of sub-designers);

k 2 - coefficient of equipment supply management (depends on the amount of financial risks assumed);

k 3 - coefficient of management of construction work (depends on the ratio of the amount of work performed on its own and the amount of work performed with the involvement of subcontractors);

k 4 - fixed price coefficient: an indicator of the general contractor's involvement in responsibility for the final risks, incl. for compliance with technological parameters during construction (depends on the technological complexity of the object, the urgency of the work, the remoteness of the object, the availability of guarantees and insurance against failure to reach the design capacity, deductions, etc.);

k 5 - coefficient of tender reduction: an indicator of a possible reduction in the amount of the contract, which is the basis for considering competitive projects on a competitive basis in terms of price attractiveness (provided that if other regulatory coefficients of participants are equal).

The implementation of such or similar methodological approaches will undoubtedly help to increase the transparency of the Russian EPC / M-contracting market for a potential customer, as well as stimulate the growth of professionalism of performers of all levels.

1 Here and below, under Engineering means the professional activity of providing integrated engineering and technical services based on advanced scientific achievements and including design technological processes, installations and structures, preparation, provision and scientific and technical support of the production process, supervision of the construction, installation, commissioning and operation of production facilities and other engineering structures.

2 R&D - design and survey work

3 СМР - construction and installation works

4 Under On our own This implies not only the performance of work by one legal entity, but also by a construction holding, in which the relations for the redistribution of consolidated profits are determined by internal documents.

An EPCM contract is a form of concluding a general contract, the form of which is international. There is also an EPC form. The main difference between these two types of contracts is that in the case of ERMC, responsibility for performance under the contract is shared between the general contractor and the customer.

EPC contract - application

EPC is used in the execution of turnkey construction works. That is, they assume the whole complex of execution from engineering to commissioning. EPC brings together a customer and a general contractor who performs the full scope of work for a fixed cost. Moreover, the general contractor assumes all construction risks, including design work and delivery of the project to the customer, and also bears warranty liability after commissioning.

EPC contract - benefits

Of course, subject to the signing of an EPC contract, there are advantages, these include:

• Production time and construction price are fixed.
• The customer does not have any problems and difficulties in coordinating and monitoring the activities of builders and designers.
• Management is simplified. The principle of one window works.
• The customer solves issues exclusively with the general contractor.
• The terms of this type of agreement are an incentive to fulfill all obligations under the agreement.

Of course, this number of advantages is more applicable to the customer. This type of contract can provide the construction customer with a result that is acceptable with low risks and for the cost, which is fixed by the agreement, and construction is carried out within the terms specified in the contract.

EPC contracts - risks

It should be noted that now the general contractors almost do not agree to sign the EPC contract and this is due to a number of construction nuances:

• Difficulty in the implementation of construction
• There is no clear composition and scope of work that will be required
• It is not possible to determine the exact volume of construction work and, as a result, the possible costs of the agreement.
• The general contractor bears the guarantee of design and subcontractor organizations.
• Financial risks for the implementation of construction

EPC contract - functions of the general contractor

The functions of the general general contractor upon signing the agreement will be as follows:

• Cost calculation, reporting.
• Involvement of subcontractors for certain types of work, for example, design and engineering.
• Purchase of materials, machinery and equipment necessary for construction.
• Control of construction and installation work at a construction site
• Implementation of labor protection at a construction site
• Involvement of subcontractor companies in the production of works and control over them.
• Quality control of work
• Delivery of the construction project and putting it into operation

Note that under the EPC, the contractor must carry out all construction work, and not just certain types.

General contractor who takes responsibility for the implementation construction project, selected by tender. The winner in the competition is the company that has all permits and permits for work and construction, and also offers the customer the most profitable terms, not only in cost, but also in terms of commissioning and construction of facilities.

EPC - contracts are more beneficial to the customer than to the contractor. Customers who want to attract general contractors to conclude an EPC contract explain their desire by the fact that the construction of the facility is carried out at a specific cost, in a place specified by the customer and in certain, usually shortest lines.

EPC contracts are becoming more and more popular, despite the fact that they are not particularly profitable for contractors. But the popularity of contracts of this type is growing, due to the fact that competition among construction organizations getting higher.

The EPCM contract is procurement, construction and engineering management. As with the EPC contract, the EPCM contract implies design and construction work, and the delivery of the construction site in finished form. The EPCM contractor is a general contractor, which means that if a construction company needs additional performance of certain types of work, then an agreement is concluded with subcontracting companies, in which the general contractor acts as the customer for the construction.

EPCM contractor - is considered a general contractor and carries out the whole complex of construction. The general contractor accepts the risks of design and construction of the facility, and after the complete delivery of the facility to the customer, it bears warranty obligations for general construction and for certain types of work. The EPCM provides for the approval of the final cost of all types of work, takes into account the price and remuneration of the general contractor and determines the time frame for putting the construction site into operation. In addition, the technical characteristics of the construction object are also prescribed in the EPCM.

EPC is about project management, not the management of specific types of work. The general contractor has the right to hire subcontractors to carry out specific assignments. The contractor under the EPCM contract is obliged to assess precisely the conformity of contractors and suppliers, as well as the distribution of the volume and the distribution of areas of responsibility. After concluding a contract with a subcontracting company, the general EPCM contractor is obliged to coordinate the actions of subcontracting companies, resolve construction issues, and also plan project activities according to the production schedule.

The main important quality of an EPCM contractor is experience and skills in organizing the necessary work, not only for construction, but also for purchasing and searching for contracting companies. This contract model is ideal if there is an increase in the cost of materials, labor and construction equipment, and other services. EPCM avoids execution risks at fixed prices.

But let us note that in the Russian Federation the development of the construction market according to the EPC EPCM schemes is unstable. Companies that are supposedly participants in the EPC EPCM market actually carry out simple general contracting activities, which are somewhat expanded.

The practice of concluding EPC contracts is widespread abroad. This type of cooperation is very popular in the Middle East, first of all, of course, in rich states. In countries such as the United United Arab Emirates, Kuwait, Qatar, the business prefers to conclude a large contract with a contractor who will build a new turnkey enterprise, take on all the problems and risks.

However, Russian companies still have a rather modest experience in concluding EPC contracts, so it is not surprising that EPC contracts as the main form of relations with service companies in Gazprom Neft were the first to be used by the team of a large international project to develop the Badra field in Iraq (Gazprom Neft Badra BV ).

The idea is simple: one contractor is involved for the entire range of works, from engineering design to procurement of materials and equipment, as well as directly for construction - therefore, only one service organization needs to be monitored. Considering the large number of diverse works during the construction of facilities at new fields, the expenditure of own resources for synchronizing the actions of contractors, even in elementary issues, for example, the correct placement of power lines, in the event of concluding contracts for each type of work, becomes unreasonable.

In addition, according to the managing director of Gazprom Neft Badra B.V. Oleksandr Kolomatskiy, EPC contracts are also convenient from the point of view of the distribution of responsibility: “If there is only one contractor, the responsibility is not diluted. And if, nevertheless, a situation arises when it is necessary to call for responsibility, then the consideration of the case takes place in the International Arbitration using civilized methods of resolving legal disputes. "

The basis for the formation of a package of EPC contracts is PDP and FEED documents *, the data from which are transformed into contract technical specifications. An integral part of the package of EPC agreements is a contractual strategy, in which the implementation of each EPC project is attributed to specific technological agreements with planned implementation dates. Negotiated and General requirements requirements for the competencies of potential EPC contractors to perform production tasks. In addition, when concluding an EPC contract, it is advisable to conclude a PMC contract (Project Management Consultancy) for the services of supporting the agreement, within the framework of which the consistency of the "internal" contract agreements with each other is monitored and the acceptance of certain works is controlled. Such contracts are extremely important, for example, when supplying complex equipment that can be produced anywhere in the world. The basis of everything is the selection of the EPC contractor himself. In Iraq, it is also complicated by country peculiarities.

Selling for a fall

The administrative system of Iraq is centralized, which stipulates strict state control over business in the field of natural resources. Only for the conclusion of contracts worth up to $ 100 million, a decision of the Management Committee is sufficient **. Contracts worth over $ 100 million are being submitted for discussion by the Iraqi Oil Ministry. With an even higher cost of the contract - from $ 250 million dollars - the Council of Ministers must agree at a meeting in person. For example, one of the contracts of Gazprom Neft Badra B.V. demanded eight months of approvals and reviews in various instances.

The procedure for selecting a contractor itself consists of two stages. First, the readiness of the company to perform the declared work is assessed: it is ascertained whether the organization has previously participated in such contracts, whether it has experience of operating in Iraq. At the stage of economic selection, price proposals are considered.

According to Alexander Kolomatsky, a pool of EPC contractors has already formed in the region, the competition among which allows customers to successfully play for a fall - the difference between the starting offer and the final cost of the contract can sometimes be very large. For example, during the tender for the construction of a central collection point at the Badra field, the price was reduced by 80%. There are no Russian participants in the Iraqi EPC tenders - the services of Russians are expensive due to the fact that they include rather high risks in their design calculations. According to the managers of Gazprom Neft Badra B.V., Asian contractors “sew” the least risks into their proposals.

However, competition in the Middle East EPC contracting market also depends on the type of service. “When we were looking for a drilling contractor, there was no queue from companies, frankly speaking, only a couple of companies entered the competition,” said Alexander Kolomatsky. “In the case of the contract for the construction of the pipeline and gas plant, there was worthy competition among Asian contractors, whose labor safety requirements were much lower than those of European or Russian companies.”

Managing Director Gazprom Neft Badra B.V. explained this difference by the peculiarity of the Badra development project itself. First, the field is remote from the main oil-producing regions of Iraq, where contractors have already set up bases, set up logistics, and resolved issues of providing temporary housing for workers. In addition, the complexity of the design of the wells themselves can lead to a prolongation of the terms of the contract, and not everyone is ready to work longer than the agreed period for the same money.

Frames for badra

A separate and extremely important task is the formation of a team to support EPC contracts, especially in the context of an international project. For Gazprom Neft, this is the first Foreign experience Therefore, there are not many specialists hired for the project from the perimeter of the company in Iraq. At the initial stage of the project implementation, the staffing of Gazprom Neft Badra B.V. was mainly due to the recommendations of employees. Currently, in the recruitment process, various resources are used: professional international recruiting agencies, Internet sites, posting vacancies on the corporate portal and in the corporate media, and sending offers to Gazprom Neft subsidiaries.

As it turned out, oil professionals of high functional qualifications with a good knowledge of the English language in Russia are at a premium. Often, candidates have good professional knowledge, but do not know the language, or, conversely, good international communication skills are not supported by experience in the profession. The Iraqi oil industry, which previously had a large number of highly qualified and experienced specialists, has been thrown far back due to political instability and is experiencing an acute shortage of personnel. Gazprom Neft Badra B.V. launched a project to train local, Iraqi personnel for further work at the field. Now about 100 Iraqis living in the region of the company's activity have been selected and are undergoing training. Oddly enough, the experience of Gazprom Neft Badra B.V. shows that if there are practically no necessary specialists in Russia, then, for example, there are enough of them in Kazakhstan. Now, in addition to Russians, Badra's team includes Kazakhs, Ukrainians, Australians, Canadians, Iraqis, Indians, Serbs and others - only about 15 nationalities, so the working language on the project is English. However, the HR services of Gazprom Neft are now paying increased attention to training personnel for international projects, which should provide specialists for future projects. To attract and train specialists for work in Iraq, the company launched special project"Personnel for Badra". Work experience Gazprom Neft Badra B.V. under EPC contracts will increase the efficiency of other major Gazprom Neft projects, and not only in the field of exploration and production.

* FEED - eng. Front End Engineering Design - preparation of pre-project documentation, PDP - eng. Preliminary Development Plan - preliminary development plan

** The MC for the development of Badra includes the Iraqi Geological Exploration Company (Oil Exploration Company), which represents the interests of the Iraqi government, Gazprom Neft and its partners: Korean Kogas, Malaysian Petronas and Turkish TPAO

Anna Danilushkina

When implementing investment and construction projects in the field of construction industrial facilities a careful selection of contractors capable of performing the required amount of work and achieving the required production indicators of the facility with an adequate assessment of the existing risks and market conditions is necessary. The increasingly widespread EPC / M contract has begun to form a civilized market for EPC / M contractors in Russia, most of which are currently not ready to meet the entire set of requirements for the implementation of such projects. Most EPC contracts today are won by large investment and construction or industrial construction holdings, offering to cover the entire range of obligations of such a contract and sometimes beyond that. Of course, from the legal point of view, the Customer of the EPC / M-contract is not so much concerned with the structure of the holding of a potential Contractor as with its reliability, competence and solvency, but its structural transparency and efficiency allow us to draw the necessary conclusions about the ability to implement the contract. To this end, within the framework of this article, the possibility of building a structure of a construction holding company, as optimized as possible for the implementation of EPC / M contracts, will be considered.

At the moment, the EPC / M-contract is the main model for organizing the construction of large industrial facilities around the world. In the EPC / M-model, the Customer at the first stage chooses a single general contractor who presented the best technological, technical and commercial solutions, and at the second stage he is ready to carry out the design according to the approved technology and then implement the construction in full. The scope of obligations of such a general contractor includes detailed design and detailed engineering, as well as the purchase of building materials, structures, technological equipment and components. In addition, the EPC / M-contractor selects subcontractors for construction and installation work or hires its own workforce. He has the right to resort to attracting intermediate general contractors, transferring to them partial execution of work on the construction of large objects or packages or the implementation of certain types of specialized work in full. It is obvious that the combination of all these competencies within the framework of one legal entity is both unreasonable and ineffective due to the different models of motivation for each separate stage of the implementation of an investment and construction project. The formation of a holding company that is optimal for the implementation of EPC / M contracts is a self-evident decision for the development of the construction business as a whole.

In order to smoothly proceed to the discussion of the main idea of ​​the article, the terminology used should be fixed. In the context of this article, the investment and construction process is understood as a certain sequential set of stages in achieving investment goals through the implementation of investment projects in the field of creating and / or changing real estate objects. The investment and construction process, like any process, generally represents a sequential change in the state of an object in time, therefore, the presence in a construction holding of competencies that provide support for each stage is a defining competitive dominant. In general, the investment and construction process is a logical sequence of stages in the implementation of an investment project, which can be narrowed down to nine main positions (see Fig. 1). An investment and construction project hereinafter is understood as any time-limited investment enterprise aimed at creating a new unique property, the presence and use of which is necessary to achieve investment goals.

In the general case, the basic investment and construction process makes it possible to quite clearly outline the specifics of the EPC / M-models of a construction contract. To describe the EPC / M-models, it is necessary to determine the boundaries of the transfer of responsibility between the Customer and the EPC / M-contractor during the construction process (see Fig. 2 and 3).

Fig. 1. Basic Investment and Construction Process.

Typical EPC contract

EPC- English abbreviation (engineering, procurement, construction - engineering, supply, construction), which, most often, means a turnkey construction contract with a fixed price. An EPC contractor is a general contractor who performs for a fixed price the bulk of the work of an investment and construction project and assumes all the risks of its implementation from the moment of design until the moment the finished object is handed over to the customer (including the fulfillment of warranty obligations), for which he bears financial responsibility in front of the customer.

The EPC contract is used, as a rule, in those projects where an experienced general contractor can accurately estimate the size of their costs, as well as the degree of risks. The EPC contract assumes that the EPC contractor performs the bulk of the work on its own, therefore, no special remuneration is provided for organizing and managing the work of the involved lower-level counterparties.

In practice, the EPC contract does not include those items of project costs that relate directly to the obligations of the Customer, which include, for example, summarizing engineering communications to construction site, preparation of construction, industrial and social infrastructure, receipt of raw materials, consumables and the organization of their delivery to the site. The model is based on the fact that the EPC contractor has the necessary experience to integrate and optimize various construction and procurement activities within a single project. The advantage of this model is the shortest terms of the project implementation, since it is not necessary to completely complete the design work to start construction, they can be carried out in parallel, since sometimes 25% of the design work is enough to start the construction stage. It is customary to issue an EPC contract on a turnkey basis for industrial construction projects in which licensed proven technologies are involved, and the negotiation of a fixed cost protects investors and customers from most investment and construction risks.

Fig. 2. Implementation of an investment and construction project through an EPC contract.

Typical EPCM contract

EPCM- English abbreviation (engineering, procurement, construction management). The subject of the contract, as in the case of EPC, is design, equipment, construction and handover to the customer of a fully finished turnkey facility. The EPCM contractor is the general contractor, i.e. concludes contracts with subcontractors on its own behalf.

An EPCM contractor is a general contractor who fully implements an investment project and assumes the risks of project management from the moment of design until the moment the finished object is handed over to the customer (including the fulfillment of warranty obligations). The EPCM contract provides for the total cost of the project, taking into account the remuneration of the EPCM contractor, and a fixed date for putting the facility into operation, and achieving the basic technical parameters of the facility. Method (approach) EPCM allows you to manage the project, and not specific work. Specific work is performed by professionals. The task of EPCM is to assess the required properties (capabilities, professionalism, labor resources, etc.) of the selected contractors / suppliers, distribute work and areas of responsibility correctly between them. Further - to coordinate their actions, resolve controversial issues, plan the general scheme of the project, change plans in case of critical changes with minimal consequences and then with all stops.

Fig. 3. Implementation of projects through the EPCM contract.

The main quality of an EPCM contractor is his experience and skills in organizing construction and procurement works and recruiting personnel for the management and integration of contractors' labor. This model is ideal in a situation of high growth in labor costs or basic materials and components, that is, when the contractor is not ready to bear the risks associated with activities at fixed prices.

General characteristics of EPC / EPCM models

Today it is no secret to anyone that the EPC / M-contracting market in Russia is in its infancy and it is hardly possible in the current market situation to find ideal models for the implementation of such contracts. Various hybrid models are in use, which are becoming more and more optimal in terms of risks and costs for customers. As a rule, they combine certain characteristics of the considered typical EPC and EPCM models. So, for example, a general contractor may not take on the risks of fluctuations in tariffs for wages, but at the same time guarantee the quality of work and standard productivity in accordance with the schedule of construction and installation works fixed in the contract. Taking into account the high dynamics of prices for materials, the growth of the cost of which causes biased marginal coverage of the risks of fluctuations in the future, can be paid by the Customer at the actual cost or adjusted according to an algorithm previously agreed with the Customer. In general, the emergence of the EPC / M-services market will lead to the emergence of new innovative schemes for the implementation of contractual strategies, which will ultimately lead to an increase in customers' budgets due to higher reserves for covering risks and unforeseen circumstances. Typical conditions for the implementation of the EPC / M-approach to the implementation of investment and construction projects can be considered:

• The customer selects a business solution and determines the sources of financing for the project, performs preliminary design studies, primarily to prepare for the tender for the selection of the EPC / M-general contractor. At the same time, he fixes the technical parameters or standards of the construction object, and also coordinates the amount of interference in the design, which may affect the value of the contract;
• Bidders incur significant costs in preparing quotations, so only two or three pre-selected contractors can take part in them. In order to increase the interest of contractors, preliminary work with them is recommended to clarify the objectives of the project, its technical characteristics, sources of financing and provision of raw materials;
• The customer wants to have a higher degree of protection for the main risks of the project, such as: cost, timing and quality. That is why he guarantees the EPC / M contractor a higher cost of the project compared to a regular construction general contract.

From the point of view of protection for the Customer, there is one more (fourth) main risk of the project, in addition to the above three, namely the risk of failure to reach the design parameters and indicators technological unit... The price / risk ratio in an EPC / M-contract is most often expressed in the choice of a pricing model, which in general can be reduced to four main ones:

• Fixed cost, i.e. when the Customer pays a fixed amount without restrictions to the likely level of profitability of the contractor;
• Fixed unit rates - i.e. when unit prices for specific types of work are fixed for the period of construction with a possible change in the physical volume of work. Usually, in this case, a maximum of fluctuations in physical volumes is agreed, beyond which the unit prices are revised;
• The estimated cost of the work, drawn up by the design institute and approved by the Customer, plus a fixed remuneration that can be calculated on an agreed basis;
• In accordance with the pricing procedure agreed in the contract. In this case, the Customer can set a limit for direct costs, but agrees with the simultaneous preparation of estimates and construction, as a result of which the parties are forced to fix the procedure for calculating the cost of work and pay in accordance with this procedure.

Based on this simple risk classification and pricing options, a 4x4 matrix can be constructed possible options(see Fig. 4) implementation of EPC / M-contracts in different conditions of division of duties between the Customer and the Contractor.

Fig. 4. Matrix of distribution of typical risks for different schemes of EPC / M-contract.

For example, in the case of a fixed contract price, the Customer prefers to cover all risks, but at the same time he must understand that he is automatically eliminated from influencing the choice of project decisions and gets what is. Such a contract is beneficial in the case of a passive non-professional customer in the field of design, when the Contractor is set with strict price and other parameters limitations. Another option is when the parties use fixed prices: The customer can vary the scope of work, put forward his wishes, while the Contractor takes off the risk of deadlines and the final price, leaving behind the quality and production indicators. A variant is possible when the price is formed according to the "costs plus remuneration" algorithm. IN this case The customer assumes the price risk, since in pursuit of the amount of remuneration, the contractor can artificially inflate the cost of design solutions and corresponding estimates, while the customer leaves all other risks on the contractor's shoulders: the customer receives quality, timing and productivity, and, in addition, he can objectively intrude on the development of the project.

Finally, a case is possible when the Customer, in fact, manages the design, makes technical and design decisions himself, and the contractor simply puts them on paper. In other words, the Customer bears the risk of price, timing and productivity, while the Contractor only bears the risk of the quality of the work. Such a scheme is most likely for an active Customer who plans to operate the facility on their own in the future. This is especially pronounced in projects of reconstruction, expansion, modernization and technological re-equipment, in which the Customer determines the requirements for the final result of the work professionally. And all these forms of relationship may well be implemented through the EPC / EPCM approaches. In other words, one should not think that the EPC / EPCM contract is a certain fixed form of relations between the Customer and the Contractor in terms of price and risks, they may well be very flexible and the need for one or another contract format is determined by the requirements for operating the investment object.

Of course, for the implementation of projects under the EPC / M scheme, there are certain stringent requirements for general contractors. In addition to experience in the implementation of EPC / M contracts, contractors are required to have significant equity capital in order to take on financial liabilities property risks, the cost of which is often a significant fraction of the contract price. To obtain guarantees from the bidder, guarantees for the return of advances, performance guarantees, guarantees of the warranty period, the usual requirement is the amount of the contractor's equity capital exceeding the project cost by three to five times. Under EPC / M contracts, deductions for default are usually determined, and the general contractor undertakes to ensure that the customer completes the project in deadlines and with the required quality.

What is EPC / M-holding

As you know, a holding is a combination of a parent (parent) company and subordinate ownership (subsidiary) enterprises. Holdings are not legal entities, but their activities, most often, are perceived by the markets in the context of unlimited time, therefore, it always makes sense to talk about holdings as permanently operating economic entities.

The construction of a construction EPC / M-holding is carried out on the basis of a process approach and involves the creation of divisions of the holding in accordance with the basic investment and construction process (see Fig. 5).

Fig. 5. Combined (horizontal-vertical) process holding.

The process approach assumes such a configuration of a combined construction holding that meets all or several stages of the investment and construction process, depending on the mission and goals of the holding's owners. The volume of companies, the configuration of vertical and horizontal groupings depend on the place of the holding in the market, on the niche it occupies and on the type of work performed, but at the same time, the principle of the presence of all participants to perform the entire range of works from the general contractor (EPC / EPCM contractor) to all types of developers is preserved.

In the process holding, individual industrial or financial companies take their place in the relevant groupings based on their place and role in the process, which harmonizes the overall holding business process and makes the holding more flexible to new types and forms of construction contracting.

In general, the configuration of the EPC / M-holding is a derivative of the process approach in the construction corporate entity (see Fig. 6). In such a holding, industrial assets for the production of building materials and structures, as well as for the assembly of blocks and assembly units of equipment, are subsidiaries of a special RM-company (supply management company). At the same time, financial and investment resources are attracted by the parent company of the holding, which is the accumulator of corporate profits and the guarantor of the return of third-party investments and credit resources. One of the clear advantages of EPC / M-holding is the ability to participate in a variety of projects as a participant of any level.

Fig. 6. Basic structure of EPC / M-holding.

An obvious difference between the EPC / M-holding is the presence in its structure of subsidiaries responsible for the main areas of implementation of EPC / M-approaches in construction, namely design and engineering companies, packaging and logistics companies capable of working with foreign manufacturers and suppliers according to international standards. And, of course, construction companies, ready to provide a full range of services for organizing a construction site and the construction of large industrial facilities. Within the framework of this concept, EPC / M-holding is understood as a unique design and construction corporation created for the effective implementation of investment and construction projects with the prevailing use of the EPC / M-approach.

By optimizing such a holding only for an EPC / M-contract, one can formulate the main advantages of creating an EPC / M-holding.

1. Accumulation of profits and growth of capitalization in the main carrier of the EPC / M-brand.

2. The ability to develop and accumulate key competencies in the implementation of EPC / M contracts in the parent company, without the need to provide full implementation functionality within one legal entity.

3. Possibility of obtaining bank guarantees, attracting external financing and other instruments, incl. for the implementation of foreign economic agreements from a single financial center.

4. Possibility of creating individual systems of personnel motivation in each company of the EPC / M-holding, which is responsible for its stage of implementation of the investment and construction project.

5. The possibility of forming a single list of constructed objects under a common brand, which increases the competitiveness of the holding as a whole and of each company in individual contracts and other obvious advantages.

Universal EPC / M-holding, i.e. a non-industry-specific holding focused on the implementation of projects in any type of construction may consist of the following companies.

1. The parent company of the holding - EPC / M-integrator: concludes contracts with Customers, provides financial guarantees, insurance, training and selection of personnel for project teams, including for subsidiaries, scientific and technical development, general brand management, PR, GR and IR support, participates in tenders. In addition, the parent company provides circulating financing, develops pricing and tariff policies for complex EPC / M services and individual works, develops a business development strategy and conducts an ongoing audit of contract performance. The project is implemented through the creation of project management teams (see Fig. 7).

2. General contractor of construction (SM-contractor) - a 100% subsidiary company (there may be several of them depending on the divisional, industrial or mixed structure of the holding), which ensures the organization of work on the construction site from start to finish, including all responsibilities for construction of VZiS. Responsible for the provision of social, logistics and transport infrastructure, for the supply of energy networks and other similar issues. In addition, the general construction contractor carries out a competitive selection of subcontracting companies, draws up a single interconnected construction schedule, and coordinates it with the project management group at the head office. The general contractor is responsible for the supply of building materials and structures for the project in full, except for the main technological equipment, for which a specialized participant of the EPC / M-holding is responsible;

3. Engineering contractor (EM-contractor) - a 100% subsidiary of the parent company, responsible for the development of technical specifications for design, surveys and surveys of unfinished construction, organization, coordination and support of design work, selection of general and sub-designers. Responsible for agreeing on the design schedule, making changes and additions during construction, agreeing with supervisory authorities, expertise and other works included in technical engineering. If the EPC / M-holding is built on a single industry, for example, energy, petrochemicals, then the creation of a dedicated engineering center is not necessary - it is enough to have an appropriate department in the parent company. But if EPC / M-holding is positioned as a universal one, it is better to have a universal center for coordination of design work. At the same time, such a center to a large extent does not perform design work itself - it organizes contractual work between corporate and external designers.

Fig. 7. Scheme for the implementation of contracts in the EPC / M-holding.

4. A specialized construction subcontractor is a 100% subsidiary of the parent office, which is responsible for performing specialized work on all projects of the holding, such as electrical work, plumbing and ventilation work, communication equipment, instrumentation, commissioning. The question is that specialized construction companies are often key at the final stage of construction and the presence of their own so-called "buffer" of competencies allows them to organically solve such problems. Of course, specialized subcontractors work on contracts with general contractors, but in case of underutilization, they have the right to work for external consumers.

5. The contractor for completing the main technological equipment (RM-contractor) is a 100% subsidiary of the parent company, which is responsible for complex technological procurement, including international logistics and selection of suppliers. One of the difficult tasks of such a company is to agree on the cost of the main technological equipment for participation in competitive selection. In addition, the formation of a base of equipment suppliers and tracking the update of their product line are important components of the professional competence of such a company.

6. Science and Technology Center (STC) is a 100% subsidiary of the parent company EPC / M-holding, which must be allocated for autonomous operation if there is a technological component in tenders for EPC / M-contract. In cases where the Customer holds a competition not only for design work, but also for the choice of the best technology, it makes no sense to involve designers before determining the winner among the owners of technological patents. Typically, the patent holder participates in a competition in tandem with the supplier of the main equipment, therefore it is important to agree on the timing of the equipment supply before preparing a tender proposal for the EPC / M contract.

7. In the structure of the EPC / M-holding, it is possible that there are other specialized companies responsible for an important section of the business process, in particular, if the holding involves the work of several thousand employees, it makes sense to talk about an independent recruitment agency that combines its work with the organization of personnel training at the corporate university. To form a park of construction equipment, it is possible to have your own leasing company, as well as a personnel rental company to perform one-time and temporary work.

Organizational structure of project management in EPC / M-holding.

The organizational structure of management of a specific project for the implementation of the EPC / M-contract in the holding cannot be closed only within the framework of the parent company. Undoubtedly, the most effective way to implement a project is to create an interpenetrating organizational structure that allows not only to flexibly respond to the specifics of each project, but also vice versa - to describe and put standard business processes and procedures between the elements of the organizational structure on the corporate quality management system. The entire cycle of the EPC / M-project for the construction of a specific facility should be based on logical and understandable relationships of all participants in the corporate business process, taking into account the existing system of motivation for effective work in each company.

The proposed in Fig. 8, the basic organizational structure of the implementation of the EPC / M-contract allows you to create the necessary system of regulations and instructions within the general quality management system, even taking into account adjustments for the individuality of projects. At the same time, this structure clearly lacks important services, namely the project controlling department (a kind of internal audit) and the information technology service, which unites all companies within the holding on the basis of a single information system for management accounting and control.

Fig. 8. Organizational structure of project management in EPC / M-holding.

In conclusion, I would like to note that in the life of the EPC / M-holding it is not necessary to be expressed explicitly, some of the functions may overlap and mutually complement in the companies of the holding. In addition, the trend of reforming construction holdings is rapidly demonstrating exactly this direction of development, in connection with which it remains to wish the management of corporations not to waste time.

Here: PR - Public relations, GR - Government relations, IR - Investor relations.

In this context: CM - Construction manager or Site manager.

In this context: EM - Engineering manager or Design manager.

In this context: RM - Procurement and Logistic manager.