Define the boundary before the tender
Most EPC disputes trace back to a boundary that was never drawn: who does earthworks, who brings power to the site, who obtains permits, who supplies water treatment.
- Land preparation, access roads, drainage and fencing
- Grid connection, transformer, and standby power
- Water source development, storage and treatment
- Permits, environmental approvals and building consents
- Staff housing, offices, biosecurity buildings and stores
- Feed storage and any feed-milling scope
- Waste, manure and mortality handling infrastructure
Design responsibility and specification style
Decide whether you are buying a design or buying a performance outcome, and write the tender accordingly. Mixing the two produces offers that cannot be compared.
- Performance specification: you state the duty, the contractor selects equipment and guarantees the result
- Prescriptive specification: you name systems and brands, and retain the performance risk
- Who stamps the structural and electrical design, and to which code
- Whether the contractor may substitute equipment after award, and on whose approval
- Which drawings and O&M documentation are handed over, and in which language
Contract terms that decide the real price
Compare these with the same weight you give the number on the front page.
- Programme with milestone dates and liquidated damages for delay
- Payment milestones tied to verifiable progress, not to calendar dates
- Advance payment guarantee, performance bond and retention
- Performance guarantees: what is guaranteed, how it is measured, and by whom
- Defects liability period and response obligations during it
- Change-order pricing mechanism agreed before award
- Local content, local labour and the subcontractors actually performing the work
EPC bid comparability check
| Item | Comparable when | Not comparable when |
|---|---|---|
| Scope boundary | Same battery-limit diagram issued to all bidders | Each bidder drew their own boundary |
| Design | Same specification style for every bid | Performance bid compared with prescriptive bid |
| Schedule | Same start event and same completion definition | Completion means different things |
| Damages | Same liquidated-damages rate and cap | Damages offered by only one bidder |
| Guarantees | Same guaranteed parameters and test method | Guarantees described in general terms |
| Payment | Same milestone structure and retention | Front-loaded payments in one bid |
| Local content | Same assumption on local labour and materials | Import-everything compared with local build |
Comparable means every bidder priced the same duty, the same design conditions and the same delivery point. Where a column is blank in a real offer, treat it as excluded until the supplier confirms otherwise in writing.
EPC tender readiness checklist
- Battery-limit diagram drawn and attached
- Specification style chosen: performance or prescriptive
- Site survey, soil data and climate data attached
- Permit responsibility allocated in writing
- Utilities responsibility allocated in writing
- Programme, required completion date and damages rate stated
- Payment milestone structure and security requirements stated
- Performance guarantee parameters and test method stated
- Defects liability period and service obligations stated
Lifecycle cost
Lifecycle cost drivers in EPC and turnkey bids
With EPC you are comparing contract structures, and the lifecycle lens exposes what the structure hides: a contractor who selects efficient equipment prices that efficiency into CAPEX, while one who selects cheap equipment pushes the difference into your energy and maintenance lines for a decade.
Cost drivers that outlast the purchase price
- Equipment selection inside the contract: connected loads per system decide your energy line — ask for the schedule, not the brand list.
- Defects liability: its length and response obligations decide who pays early-life failures.
- Liquidated damages versus your real delay cost: if the LD rate sits below your cost of a delayed start, schedule risk stays with you.
- Commissioning depth: performance testing at design conditions is what turns guaranteed parameters into measured ones.
- Handover quality: O&M documentation and training determine whether designed efficiency survives the first year of operation.
Request these inputs from every bidder
- Equipment schedule with connected load per system and expected annual kWh for the whole complex
- Guaranteed performance parameters with the test method and the party who measures
- Expected annual maintenance cost for the installed systems, in writing
- Defects liability period, response obligations and the spares package included at handover
- Programme with milestone dates and the liquidated-damages rate and cap
- Delivered programme length in weeks from contract signature to performance test
Worked example — hypothetical figures, calculator arithmetic
| Metric | Bid A | Bid B |
|---|---|---|
| Quoted CAPEX | 9,800,000 | 8,950,000 |
| Energy (10 yr) | 696,000 | 864,000 |
| Maintenance + spares (10 yr) | 2,518,000 | 3,059,500 |
| Lead-time delay cost | — | 144,000 |
| Total lifecycle cost (10 yr) | 13,014,000 | 13,017,500 |
| Per bird place | 65 | 65 |
| Per bird place per year | 6.51 | 6.51 |
Illustrative only: two hypothetical bids in one shared currency. Assumptions: 10-year horizon, electricity 0.12 per kWh, no escalation or discounting, delay costed at 0.06 per bird place per week beyond the faster programme. Not market prices, quotations or a recommendation — run your own normalised bids through the lifecycle calculator.
Run your own bids in the lifecycle calculatorCapacity unit for EPC bids: total bird places across the complex (or thousand eggs set per week for a hatchery EPC).
Frequently asked questions
Issue one battery-limit diagram and one specification style to every bidder, then compare design responsibility, programme with liquidated damages, payment milestones, performance guarantees and local content on identical terms. Verify completed projects of similar scale and confirm which subcontractors will actually perform the work.
Usually the headline number is higher, because single-point responsibility, interface risk and schedule risk are priced into it. Whether it is more expensive overall depends on your own engineering capacity, the cost of your time and the consequences of a delayed start-up.
Measurable parameters with an agreed test method — for example house temperature and air speed at design conditions, ventilation rates, water and feed delivery capacity, and completion by a defined date. Guarantees on bird performance are rarely appropriate because they depend on management, genetics and feed.
Only after you add the missing packages to the equipment route: design, civil works, installation, utilities, project management and your own time. Otherwise you are comparing a finished farm against a container of equipment.