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Allocating Risk in Solar Power EPC Contracts: Texas Style! 

by Farrar Cristopher

Published: July, 2021

Submission: July, 2021

 



Co-hosted by the Texas Solar Power Association 


Developing EPC Contracts involves many different stakeholders from investors, developers, contractors, and equipment suppliers. Allocating risk to the party that is in the best position to manage and control the risk is important to keep costs contained. Factors such as technology, cost constraints, schedule, stakeholders, safety, and performance are just some of the major issues that affect risk allocation. Join us as we dive into a discussion on allocating risks through project delivery structures, limitation of liabilities, financial security mechanisms, and how to Texas-size the project with some unique Texas nuances for EPC Contracts.


Topics to be included:


  • Project Delivery Structures
  • Limitation of Liabilities
  • Financial Security
  • Texas Issues: Indemnification, Retainage, and Lien Waivers

Webinar Recording


                                                                                                                                                                                                                                                                                                   


Key Takeaways


  • Large-scale construction projects involve complex risks associated with budget, schedule, multiple stakeholders, intellectual property, financing and other risk allocation provisions in the engineering, procurement and construction agreements.
  • Developing the appropriate project delivery structure is the first step in properly allocating risk on large-scale projects.
  • Financial security can be the last line to saving a project. Available options for financial security include payment and performance bonds, liens, retainage, Subguard, letters of credit and parent guarantees.
  • Understanding how to effectively negotiate limitations of liability provisions such as aggregate caps and waivers of consequential damages can also result in proper risk allocation.
  • Knowledge of local jurisdictional issues, such as Texas, can provide a competitive advantage when negotiating engineering, procurement and construction agreements.

 



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