---
title: "Methods of execution guided by PPR"
subject: "Construction Management"
chapter: 5
key: "semester_8/construction_management:ppr-methods-epc-boo-bto"
source: https://www.bctengineer.com/q/semester_8/construction_management/ppr-methods-epc-boo-bto
site: BCT Engineering
---

# Methods of execution guided by PPR

Construction Management · Chapter 5: Contract Management

- Asked in: 2079 Jestha, 2+4 marks
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_8/construction_management/ppr-methods-epc-boo-bto
- Whole chapter: https://www.bctengineer.com/md/semester_8/construction_management/chapter-5

## Question

Enlist different methods of execution of work guided by PPR. Explain with suitable examples: EPC contract, Turn key contract, BOO contract and BTO contract.

## Short answer

PPR methods include open bidding, pre-qualification, sealed quotation, direct purchase, user's committee, force account, and special contracts. EPC: single contractor designs, procures, builds (e.g., hydropower). Turnkey: ready-to-use facility. BOO: build-own-operate without transfer. BTO: build-transfer-operate.

## Answer

#### Methods of execution of work guided by the Public Procurement Act (PPA) 2063 and Rules (PPR) 2064
1. Open competitive bidding: national (NCB) and international (ICB)
2. Pre-qualification followed by bidding
3. Two-stage or two-envelope bidding
4. Sealed quotation (for small value)
5. Direct purchase (very low value or single source)
6. Works by user's committee / community participation (consumer groups)
7. Force account / departmental (amanat) work
8. Special contracts: turnkey, EPC, design-build, BOO, BOOT, BTO, and joint venture

#### EPC contract
**Engineering, Procurement and Construction.** A single contractor designs (engineering), procures the equipment and materials, and builds the project, delivering a complete working facility at a fixed price and date. Example: a hydropower plant or a substation where the EPC contractor delivers the whole plant including the electro-mechanical equipment. The risk of design and cost is on the contractor.

#### Turnkey contract
The contractor is responsible for everything from the design to construction, testing and commissioning, and hands over a ready-to-use project ("turn the key") at a lump sum price. Example: a hospital building constructed and equipped by one firm.

#### BOO contract (Build-Own-Operate)
A private company builds, owns, and operates the facility permanently, selling its services or output (for example, power to the NEA under a PPA). There is no transfer of ownership to the government. Example: a private independent power producer.

#### BTO contract (Build-Transfer-Operate)
The private party builds the facility, transfers ownership to the government immediately after completion, and then operates it for a fixed period to recover its investment through the fees. Example: a toll bridge or a water supply scheme that the developer operates for 20 years under the agreement.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. What does an EPC contractor do?
   A. Only supplies equipment
   B. Only builds from client design
   C. Engineering, procurement and construction of the complete facility at a fixed price and date
   D. Operates the facility for 20 years
   Answer: C. Design and cost risk is on the contractor. (Key point: EPC)

2. Turnkey means:
   A. Client builds and contractor supervises
   B. Cost plus contract
   C. Private ownership permanently
   D. Contractor designs, builds, tests and hands over a ready-to-use project at a lump sum
   Answer: D. The client just turns the key. (Key point: Turnkey)

3. What is the difference between BOO and BTO?
   A. BOO: private owns permanently; BTO: ownership transferred to government right after completion, then private operates
   B. BOO transfers ownership at once; BTO never transfers
   C. Both transfer after 20 years
   D. No difference
   Answer: A. In BTO transfer happens before operation; in BOO there is no transfer. (Key point: BOO vs BTO)

4. Which is a PPR method of execution?
   A. Cost plus only
   B. Sealed quotation for small value works
   C. Verbal agreement
   D. Arbitration
   Answer: B. PPR lists open bidding, PQ, two-stage, sealed quotation, direct purchase, user committee, force account and special contracts. (Key point: Methods)

## Related in Construction Management

- [Turn-key contract](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Aturnkey-contract) — Construction Management, chapter 5