An increasing number of EPC contracts combine both FEED* and project execution. In this context, we observe an increasing number of situations where Contractors move from FEED* to execution in a continuous manner without checking the comprehensive maturity of the proposed solution. This then inevitably creates substantial issues during project execution. In our new White Paper 2019-12 ‘How To Properly Manage the Transition from FEED to Project Execution in combined FEED and Execution Contracts’, we explore the good practices that should be applied in this situation, and the reasons why.

In general this approach of combined contracts can only be used in industries where the process and the solutions are proven. This then creates a number of opportunities for improved overall project performance.

The push for acceleration tends to blur the limit between FEED* and project execution and this also creates substantial risks for the project which are often under-estimated.

In keeping with the good practices of project development governance for Owners, there should be an effective decision gate at the end of a Detailed Feasibility Study which not only covers aspects related to design but also checks the overall condition of the project including its execution plan, contractual strategy, and considers how well it interfaces with its environment including other parties or facilities.

Combining FEED* and project execution in a single contract is an attractive concept for acceleration of development projects. However, it should not mean that execution actually starts with the FEED*. It remains essential to check that the design and project execution plan are fully consistent and mature at the end of FEED*. Contractors need to learn to introduce in their project management framework a strong review gate at that stage inspired by Owner project governance frameworks. Any anticipation of execution or early commitments prior to that gate should be justified, limited and subject to authorisation. Read our new White Paper 2019-12 ‘How To Properly Manage the Transition from FEED to Project Execution in combined FEED and Execution Contracts’ to understand better this issue and learn how to address it.

*FEED is a common acronym in Oil & Gas and stands for Front-End Engineering and Design, and is more or less equivalent to Detailed Feasibility at least for the technical part (basic design)

If you can’t access the link to the white paper, copy and paste the following link in your browser: https://www.projectvaluedelivery.com/_library/2019-12_Risk_no_milestone_FEED_to_Execution_v0.pdf