If you’re an Engineering, Procurement and Construction Firm (EPC) or are frequently commissioningEPCS for land development projects, then you already know what an uphill battle any development project is. Avoiding cost overruns and managing time restraints to deliver to clients ultimately end up pinching your own timeline and budget, making the job stressful and – where hurdles beyond your control rear their heads – often beyond your control.
While acceptance is the answer to many things, it’s hard to shrug off such inconvenience. After all, any extra expense or delay inevitably affects your bottom line and the bottom line of your land developer clients.
It’s not just a personal problem, either. How seamless a workflow is directly impacts how quickly we get more energy to the grid. With some pretty hefty energy goals on the line, staying within a given budget, meeting timelines, and delivering what was promised are all key ingredients to a successful future.
Unfortunately, stagnant technologies in the EPC industry have contributed to EPC firms’ at times lengthy project execution. EPC services are a significant support for land developers and the energy industry alike. However, innovation within EPC technologies via automated, turnkey solutions would allow for easier project management and accelerated timelines, all before construction of the project has begun.
Today, let’s take a look at nine major challenges facing EPC firms – and some solutions.
9 Major Challenges Facing EPC Firms
What should EPCs look out for? Here are eight impediments to timely project delivery.
1. Site Selection Issues
Site selection is one of the most critical challenges EPCs face today. Rising land costs make appealing property ever more competitive. It’s tempting to jump on a parcel before you know if it will actually work, simply to prevent another large-scale developer from getting it.
However, this ends up being a less productive strategy, because you get mired in contracts that don’t end up working for you. Additionally, you often don’t find this out until well down the road, which wastes time and money.
Whether an in-house team or an EPC firm preforming site selection, this process is crucial to a seamless construction project and rapid project timeline. Thorough site assessment allows development teams to approach property owners with confidence, knowing there will be minimal environmental or logistical surprises on the site- ultimately avoiding costly delays.
2. Rising Cost of Imported Materials
Imported materials are not only getting more expensive, they’re volatile as well. This makes it harder to predict and factor them into budgets.
The Inflation Reduction Act (IRA) aims to rectify this issue via tax incentives for domestic manufacturing. However, many EPCs still rely on imported materials to support their project timelines.
3. An Aging and Less-Skilled Labor Force
The construction labor force is getting older and the younger generation is just beginning to learn their craft. We’re seeing both fewer applicants and less educated ones, which impacts project success overall. EPC firms that are unable to replenish qualified laborers and contractors will surely see repercussions to brand and the bottom line.
4. Slow Adoption of New Technology
While construction companies can hardly be labeled Luddite in nature, they do tend to adopt technology slowly. Construction is a juggernaut, and change management is difficult at scale. This makes firms wary of implementing new systems, even where desperately needed.
5. Burdensome Regulatory Requirements
“EPC contractors are in charge of identifying, evaluating, mitigating, and monitoring project risks, such as schedule, cost, quality, safety, and environmental concerns, throughout a project’s life cycle,” explains H+M Industrial EPC.
That means the burden is on you to meet all regulatory and environmental requirements, be they at the federal, state, or local levels. When you have no aligned system for running reports on promising land (say, wetland encroachment), your development timeline will suffer. A project’s completion date can be drastically pushed if these environmental liabilities are not properly addressed.
6. Sustainability in Construction
Construction activities drive significant community sentiment, impacting the project and the regulations that govern it.
More than ever before, the world is watching – and judging – how construction firms operate. This is especially true since “Globally, the built environment generates 30% of total greenhouse gas emissions and construction uses 32% of the world's natural resources.”
The wrong move, regardless of intent, can create a public relations crisis that at best slows down a project – and at worst devastates your brand.
In addition to the environmental risks of development, land infringement and noise are concerns held by the public. AI tools, such as Solar Pulse (currently in beta testing), can aid EPCs working with large-scale solar developers to measure this sentiment.
As sustainability grows more prevalent in the conversation of construction, we are likely to see more environmental regulations impacting the construction industry.
7. Lack of Standard Design Libraries
Many EPCs still don’t have design libraries that outline standardised modules and processes for development. This leaves you reinventing the wheel every time.
Of source, the scope of work will vary from project to project and unique work is required for each project. However, project timelines see longer timelines due to the lack of design libraries driving increased man-hours for deliverable completion.
8. No Single Source of Truth
Similarly, without a centralized system for uploading and downloading files, stakeholders at all levels – workers, managers, and owners – are without one clear answer to any given question. That slows down procurement, approvals, and development overall. Engineering design work passes through many hands and sees many edits before completion-making having centralized points for data imperative to success.
9. Expensive Land Development Costs
It is expensive to develop land, plain and simple. Many firms are already operating on the margins, and the above challenges take them even closer to the brink. Even with available tax credits
Even with the financial incentives of the IRA, rising labor and materials costs are just some of the factors contributing to high land development costs. The diminishing amount of available, developable land
Today’s Top Solutions to EPC Challenges
Technology and automation can help streamline all of the above problems. From identifying more suitable plots of land to attracting the best applicants, apex information technology can do what all the good intentions in the world cannot: help you meet your deadlines.
Indeed, studies show that “even a 1% reduction in costs through technological and operational improvements would save the construction industry approximately $100 billion annually.”
That’s far from the only benefit. Centralized databanks, accessible to all, help create a single source of truth that minimizes confusion and rework. They also democratize the development process, bringing the best contractors and laborers to you because you offer a more enjoyable work experience.
Good technology helps you identify materials ahead of time, avoid over-purchasing, organize design libraries, meet regulatory requirements, and hit sustainability metrics. And easily available reporting removes questions from the outset.
Repeatable, sustainable, profitable projects start with risk reports.
Transect: Accelerating Projects One Report at a Time
You can’t develop without the correct site to match your project scope, which makes finding said site of paramount importance to EPC firms and their clients. You’re responsible to owners for ensuring the project gets off the ground quickly, reliably, and in the right place.
That’s where fast, accurate, environmental and risk reporting comes in. By automating the site selection and permitting process with Transect, you can check the first and most important box on your EPC list right away – without steep change management procedures.
Transect ready-in-minutes desktop tools allow EPCs to create that single source of truth, with customized reports you can easily share with team members and clients as both PDF and KML files. Instant customization and exporting allow clients to receive answers and provide feedback sooner, condensing the project timeline. EPC teams can drag and drop relevant site information, such as slope and floodplain data, to their point of contact for the development work, or they can include relevant information for each team.
From project owners to subcontractors and construction management teams, knowing the state of the land before beginning construction projects is crucial to success. Additional services, such as slope and aspect calculations, available in the Transect marketplace allow EPCs to rapidly asses all aspects of a site for their clients with a few clicks of a button.