Abstract
A large‐scale engineering procurement and construction (EPC) project is often conducted by a joint venture. Many factors affect the success of cooperation among participating enterprises, such as trust and the degree of effort of both parties. The most important one is a rational profit sharing mechanism. Reasonable profit sharing mechanism concerns whether the advantages of the EPC model can be fully utilized. In this study, the proposed EPC project is undertaken by a joint venture integrating design and construction enterprises. Moreover, the profit sharing problem arises from the project optimization implemented by both parties. The fairness concern behavior of both parties is considered, and the profit sharing model for the EPC project is established on the basis of game theory. The effect of the fairness concern behavior of both parties on the EPC project optimization and its profit sharing is further analyzed by simulation analysis. The research findings show that the project optimization profit and its sharing are related to not only the efforts and cost coefficient but also the fairness concern behavior of both parties. The research results are conducive to the application of the EPC model in the field of construction engineering.
Highlights
Engineering procurement and construction (EPC) refer to a method used by a project owner when contracting the project design, construction, and procurement as a whole to a single contractor [1]. e most significant advantage of the EPC model is the integration of engineering design and construction, and the subject of contract responsibility is single, which has the advantages of reducing the engineering cost, improving the design constructability, and shortening the construction period [2,3,4]
A large-scale construction project is usually delivered by general contracting or joint venture, which is combined with several enterprises [7]. ese enterprises cooperate to share risks and opportunities [8]. e reasonable sharing of the project profit is the foundation and critical issue for the friendly cooperation and maximum performance of participating parties, and it is related to whether the advantages of the EPC model can be fully utilized [2, 9]. erefore, the establishment of a reasonable revenue sharing mechanism will contribute to the implementation and sustainable development of the EPC model
(2) A large-scale EPC project is often undertaken by multiple participants, and the optimization of an engineering project is often completed by design and construction enterprises. erefore, this paper only considers the profit sharing problem of the project optimization completed by the cooperation of the design and construction enterprises. e profit of project optimization is wholly shared between the two parties
Summary
Engineering procurement and construction (EPC) refer to a method used by a project owner when contracting the project design, construction, and procurement as a whole to a single contractor [1]. e most significant advantage of the EPC model is the integration of engineering design and construction, and the subject of contract responsibility is single, which has the advantages of reducing the engineering cost, improving the design constructability, and shortening the construction period [2,3,4]. An et al [18] introduced the negotiation mechanism into the optimal profit sharing problem of the joint venture general contracting project and constructed the negotiation model to solve this problem. An et al [27] considered the subjects’ fairness concern behavior and analyzed its influence on engineering design optimization and its profit sharing negotiation. Erefore, the subjects’ fairness concern behavior has a direct influence on their decision making and should be considered in optimizing the profit sharing of the EPC project. The effect of the fairness concern behavior of both parties on the EPC project optimization and profit sharing is further analyzed. Research results can provide support for the establishment of the EPC project revenue sharing mechanism and contribute to the application and sustainable development of the EPC model in the field of construction engineering
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