SUBCONTRACTING MANAGEMENT IN AN EPC PROJECT: A CASE STUDY OF DELAY RISKS

Abstract

Subcontracting was adopted in a major EPC power generating infrastructure project in South-Sumatera, Indonesia. The completion of this project, which was executed in the framework of the government’s alternative energy power generation acceleration endeavor, was delayed. This paper analyzes subcontracting management as the main cause of the delay. A data collecting survey, which included interviews with project respondents, was conducted in the objective to obtain their perception on delay risk caused by subcontracting management. A risk factor list was created based on this survey. A qualitative risk analysis was used to assess the risk extent. 18 risk factors with high and significant levels are presented. The list of risk factors in each of the EPC project’s phases was then used in analyzing the project’s completion delay. It is shown that the main contractor’s lack of experience in the work’s subcontracting management has caused miscommunications in engineering phase, tender process miscalculations, lack of procured materials and equipment quality, imperfect construction preparation, imperfect commissioning, and reworks. Construction was identified as the most critical project phase due to a relatively high number of subcontractors involved in the work and the complexity of the EPC project. The interaction of the whole factors finally caused project completion delay.