Complex project management (PMC)

Growing complexity of international construction projects and condition of the engeneering market are the reasons for changing priorities and leaving EPC contract, as there are relatively few qualified EPC-contractors.




This is the reason for investors and contractors to look for new methods of work. Complex project management and EPCM contracts are one of these tools.



The main difference between EPC and EPCM is that an EPCM contractor renders services (including engineering) but only as a mediator in project construction contracts. EPCM contractor serves as an authorized representative of the customer and acting on behalf of the client and negotiate direct contracts between the client on the one hand and suppliers, specialist contractors, on the other hand. Each contract with the supplier is a direct contract between the customer and the company rendering specialist services or with the seller. This method of project implementation customer should have a large and experienced team to assist the EPCM contractor in managing these contracts.


Despite the fact that the most important function of EPCM-contractor is control over the execution by the other contractors of its obligations, the customer must also monitor the performance of other contractors of their obligations due to the way the assignment of responsibilities between the parties, characteristic for EPCM. In respect of all the problems under the contracts concluded between specialized contractors and the customer, the responsibility ultimately lies on the shoulders of the customer. For example this regards to such problems like  dependence of one contractor on the work of another,  claims for compensation due to delays and damages,  requests for additional funding and deferring to a later date.Although the EPCM contractor must assist the customer in resolving any claims, the EPCM contractor is not a party o legal disputes between the customer and the specialized contractors.


The EPCM contractor usually does not assume full responsibility for the readiness of the implemented object by a predetermined date (therefore, the EPCM contracts rarely specify the terms of payment for failure to meet the project deadlines). EPCM contractor also does not take responsibility for the quality of construction works or for the total cost of the project for the customer. However, the contract is often subject to conditions for the promotion and material incentive of the EPCM contractor in reducing costs, meeting deadlines, etc.


Accordingly, the contractor s area of responsibility concerns non-compliance with its agreed obligations:

  • in design;
  • in cost estimation;
  • in evaluation of terms of work;
  • in management of materials and equipment supplies, as well as in support of contracts with specialized contractors;
  • in coordination of design and construction works between contractors.


EPC contractor is fully responsible for project execution time within the budget. Structure of EPC contractor includes a project management unit, but this does not completely eliminate all risks. An investor may conclude a PMC contract with third-party organization to monitor the execution of an EPC contract and to prevent failure of its implementation. If the investor is not interested in integrated project management, and, for example, he is interested in a set of services in the field of design, then he concludes (PMC-contract) to manage a specific direction.




Project Management Company (PMC) is a company or consultant who represents the profile of project management experts.

Project Management Organization (PMO) is a division within the company that represents the profile experts in project management.


The company that received a PMC contract represents interests of the customer during implementation of the whole project (or its part) directly on behalf of the customer. Examples of the functions of the customer in certain areas are preparation of documentation and participation in tender, development of a feasibility study, optimization of the process solutions of the existing design documentation and engineering support of the projects. In case of engineering support, the customer independently selects contractor-executors, and the functions of the regulator of relations with them and between them are entrusted to the management company.

The second variant of such a model is infusion of individual specialists or a ready complex team directly into the staff for a period specified in the contract.



The list of the possible components of the PMC contractor s activities under the contract:

  • Management of all processes (or separate items) that are aimed at meeting the requirements and tasks of the project, on behalf of the customer;
  • Representing interests of the customer in the specified areas in order to achieve the maximum economic efficiency.


The PMC contractor can exercise control in the following areas:

  • Project implementation plan;
  • Project implementation procedures;
  • Planning, scheduling of the activity network, definition of the risks;
  • Control of financing and costs; Management by an Earned Value Technique;
  • Change management, formation of corrective actions (if necessary);
  • Risk management;
  • Procurement and supply;
  • Control over the contracts implementation;
  • Technological and price audits.


Creation of a project management department within the company of the EPC contractor, often creates only an illusion of an effective management model and leads to increased risks in implementation of the project.

Data provided by this department is often unreliable, as it meets the interests of the EPC contractor, not the investor.



R&D Institute "PEGAZ" not only manages projects in a complex way but also manages separate directions of the project. Within the framework of an integrated approach to project management, PEGAZ Holding is able to accelerate its implementation by 30%.




3D modeling in project management allows:

  • To identify the conflicts in the design;
  • To improve the quality of design solutions;
  • To ensure integration of the developers in disciplines and dynamics of interaction with the remote departments;
  • 3D model - central control element in engineering and the main source of structured information.




  • Active data management of the supplier;
  • Advanced reception of input data from the supplier for detail design;
  • Detailing of the integrated plan and schedule of the supplies taking into account construction works;
  • Method C-P-E (construction- procurement- engineering).



  • Promotes early study of the documentation by the construction contractor;
  • Excludes violation of the construction technology;
  • Involves the contractor in selection of the optimal solutions in organization of construction and preparation of projects for implementation of construction operations) / Method Statements for crane operation;
  • Ensures planning of the resources of the construction contractor within the established deadline;
  • Ensures clarity of the tasks and visibility of the reports during project implementation.