Engineering Procurement Construction Project Research Articles

Risk evaluation of mega infrastructure construction supply chain in engineering-procurement-construction projects: an integrated fuzzy AHP and fuzzy DEMATEL approach

PurposeThe paper covers mega infrastructure construction supply chain (MICSC) in Engineering-Procurement-Construction (EPC) projects, where the frequent occurrence of risk incidents has greatly affected human life. The research aims to establish a risk evaluation index system for MICSC in EPC projects, exploring what risk factors lead to risk incidents and measure the importance and causality of all these risk factors.Design/methodology/approachThe research applies a combination of quantitative and qualitative analysis methodology to process data sequentially. In the first place, risk factors for MICSC in EPC projects are extracted and identified from literature survey and expert interviews. In the second place, an integration model fuzzy Analytic Hierarchy Process (f-AHP) and fuzzy Decision-making Trial and Evaluation Laboratory (f-DEMATEL) is constructed to comprehensively analyze all these risk factors.Findings12 primary risk factors and 36 secondary risk factors comprise the risk evaluation index system for MICSC in EPC projects from 178 literature and 5 professionals. The results indicate that Political Situation (F1), Social Security (F2) and Management Mode (F8) are critical risk factors, where F1 and F2 are cause factors and F8 is an effect factor.Originality/valueThere are three main contributions of this paper. First and foremost, from the perspective of the research content, no other study has been able to assess risk factors for MICSC in EPC projects, while embedding nine phases of the whole project life cycle and six subjects of stakeholders into a risk evaluation index system. Additionally, from the perspective of research method, a combined model incorporating f-AHP and f-DEMATEL is constructed to avoid the one-sidedness of a single model. Last but not least, from the perspective of practical significance, focusing on the critical risk factors, a series of effective measures are formulated to make appropriate management decisions for nodal enterprises of MICSC, which can improve their risk management capabilities.

Decision‐Making Evaluation and Optimization Strategies for Construction EPC Project Developers Utilizing BIM Technology

In the context of the advancing construction engineering field in China, there has been a significant increase in the adoption of building information modeling (BIM) technology within engineering–procurement–construction (EPC) projects. This emerging technology is expected to significantly influence the decision‐making practices of professionals in the construction and engineering domain. Consequently, there is an urgent need for comprehensive research focused on construction management specifically pertaining to the effectiveness of construction developer management. This study examines seven representative EPC projects where BIM technology was implemented and it considers various factors that have the potential to influence project decision‐making while taking into account time and cost considerations. A comprehensive multidimensional evaluation method that combines the analytic hierarchy process (AHP) and the fuzzy comprehensive evaluation method is introduced in this study. The results of this study emphasize that the efficiency enhancement strategies derived from the judgment indicator method demonstrate favorable practical outcomes. This research highlights the importance of a comprehensive evaluation method combining the AHP and the fuzzy comprehensive evaluation method to enhance decision‐making efficiency for construction developer management staff.

Research on Risk Management of Engineering Projects under EPC Mode

As a typical type of general contracting model, EPC (Engineering Procurement Construction) refers to the full process general contracting carried out by the contractor on behalf of the owner, in accordance with the agreement, for the design, procurement, construction and other stages of the engineering project. Compared to other modes, the EPC general contracting mode also faces more risk, with risk factors in each link. This article conducts research on the risk of engineering projects under the EPC mode, mainly analyzing the characteristics of the EPC mode and the risk problems existing in the EPC general contracting mode. It proposes relevant countermeasures to strengthen the risk management of EPC general contracting projects from four aspects: contract, design, procurement, and construction, providing a certain reference for the risk management of EPC projects in construction enterprises.

Methodology for risk assessment of engineering procurement construction project based on the probabilistic hesitant fuzzy multiple attributes group decision making

With the continuous development of China’s economic system, the development of the construction industry is becoming more and more rapid, and the number and scale of construction projects are increasing. Due to the characteristics of large projects and long cycles, there are a large number of construction parties involved in construction projects. The increase in the number of participating partners makes it difficult for their projects to be integrated and managed by management departments such as owners, let alone for various parties to collaborate in the construction of projects. In order to effectively solve this problem, the engineering procurement construction (EPC) general contracting model has emerged. The risk assessment of EPC project is classical multiple attributes group decision making (MAGDM). The probabilistic hesitancy fuzzy sets (PHFSs) are used as a tool for characterizing uncertain information during the risk assessment of EPC project. In this paper, the classical grey relational analysis (GRA) method is extended to PHFSs. Firstly, the basic concept, comparative formula and Hamming distance of PHFSs are introduced. Then, the definition of the score values is employed to obtain the attribute weights based on the information entropy. Then, probabilistic hesitancy fuzzy GRA (PHF-GRA) method is built for MAGDM under PHFSs. Finally, a practical case study for risk assessment of EPC project is designed to validate the proposed method and some comparative studies are also designed to verify the applicability.

Analysis of the Implementation of Project Control Information System (SIPP) in Engineering Procurement Construction Projects

Information System is a system that is needed by organizations in evaluating the performance of a project. In EPC projects, tools are needed to help evaluate costs and progress. For this reason, through the Project Control Information System (SIPP), the prognosis of costs and project progress can be known. This study uses a mix method that aims to analyze the performance of SIPP in the Sorong Open Access project by comparing the Financial Work Plan (RKK) report with data inputted in the SIPP system and interview methods to users, direct supervisors and upper management. So that a conclusion and recommendations can be produced for improving data input and the use of SIPP in EPC projects. The results of quantitative research that have been carried out on the percentage of suitability of cost item data and RKK progress items inputted in the SIPP in December 2022, January 2023 and February 2023 the conformity value is still small. The results of qualitative research from interviews of 12 people represented by 5 users, 4 user superiors and 3 upper management, concluded that the SIPP program was quite good. However, improvements are needed in the data verification process after input. The proposed new business process is expected to improve the data input process and the conformity of the input data is 100%. So that payment problems to suppliers and progress do not experience obstacles due to data discrepancies in SIPP.

Analyzing the influence factors of the post-earthquake reconstruction project using fuzzy DEMATEL

ABSTRACT The high degree of integration of the Engineering-Procurement-Construction (EPC) method can more effectively reduce waste during construction and improve the sustainability of post-disaster reconstruction. The post-earthquake reconstruction in China is increasingly using the EPC method, and it is necessary to sort out the applicability and operating mechanism of the EPC method in the context of reconstruction. This study first established a process model for the post-earthquake reconstruction EPC project, and extracted 15 influencing factors. By using the fuzzy DEMATEL method, the prominence and mutual influence relationship between factors are determined. After setting a reasonable threshold, the key factors and influence paths are revealed. The study finds that the owner’s behavior, owner’s requirement, general contractor, available resources, contract and plan, and optimization information are the factors that need to be prioritized for resource allocating and managing, and they have a clear path of influence on other factors.

Investigation of the Critical Factors Influencing Multi-Stakeholders’ Participation in Design Optimization of EPC Projects

Design optimization can influence the achievement of management goals and the sustainable development of EPC (engineering–procurement–construction) projects. Current research regarding engineering design optimization mainly focuses on the technology aspect, while lacking extensive attention regarding the factors influencing stakeholders’ participation in design optimization of EPC projects. Based on the existing literature and expert opinions, this study identifies 33 critical influencing factors and adopts the DEMATEL (decision-making trial and evaluation laboratory) and ISM (interpretive structural model) method to analyze the hierarchical structure and interrelationships among these factors. The results show that the factors, including subcontractors’ participation during the design, design management level, performance evaluation mechanism, technological development, owners’ attitude towards disputes, and sensitivity to project cost growth, play critical roles in multi-stakeholders’ participation in design optimization of EPC projects. All these factors can be divided into causal factors (13) and result factors (20) and a hierarchical structure model is developed for the whole system, composed of three types of influencing factors, that is, the surface direct factor, intermediate indirect factor, and deep-rooted factor. The findings of this study can help managers to have a better understanding of design optimization of EPC projects from the stakeholder perspective and help managers to take effective measures to improve the status quo as well as facilitate the sustainable development of this kind of project.

Subcontracting and rework cost sharing in engineering–procurement–construction projects

Infrastructure development projects are overwhelmingly managed through engineering–procurement–construction (EPC) contracts, which allow a project end user to shift all project risks to a contractor. Accordingly, the International Federation of Consulting Engineers recommended a contract template based on a lump-sum contract between the end user and main contractor. However, EPC projects often suffer from quality issues due to moral hazard, which is aggravated by the involvement of subcontractors hired by the main contractor to perform parts of the project. Besides, costly rework is frequently needed to achieve the contractually mandated quality. When the main contractor must share some of the subcontractor’s rework cost, an externality might arise. In this study, we model an EPC contract with three parties: the end user, the main contractor, and a representative subcontractor. We compare the end user’s cost and quality trade-off for the recommended lump-sum contract and the proposed incentive contracts. We find that the lump-sum contract can achieve the first-best trade-off under limited circumstances, whereas the appropriate incentive contract can do so for a wider range of circumstances. Rework cost sharing can cause under- or over-investment in efforts and reduce system welfare compared to the first-best outcome by weakening the incentive contract’s ability to overcome moral hazard. However, for a subcontractor with limited liability, rework cost sharing can improve project outcomes by allowing the main contractor to reduce the subcontractor’s risk exposure.

Research on the BIM Application Mechanism of Engineering-Procurement-Construction Projects Based on a Tripartite Evolutionary Game

This study establishes a tripartite evolutionary game model based on the assumptions of bounded rationality and the interaction behavior of governments, owners, and general contractors to examine how strategies are changing for three stakeholders regarding the building information modeling (BIM) application in engineering-procurement-construction (EPC) projects. The theoretical model was validated and the effects of critical factors on stakeholder decision making were discussed using case study and numerical simulation analysis. The results show that (1) the choice of the BIM application strategy in EPC projects is affected by the interactive behavior of participants in the game, (2) the reasonable subsidies contribute to the evolution of the ideal stable strategy, (3) the owners’ high standard of incentives for general contractors can accelerate BIM promotion, (4) the general contractors are more sensitive to the loss that may be caused by problems with the BIM application, and (5) the positive externalities generated by the application of BIM have a great impact on the wide application of BIM. And some suggestions are put forward toward improving the development of BIM in EPC projects on the basis of findings. This study may contribute to our current understanding of the interactions of stakeholders in EPC projects, as well as provide valuable management implications for the governments in order to promote the development of BIM.

Analysis of The Effect of Fabrication and Installation Work on Cost Overruns in Steam Turbine Generator Projects and Coal Boilers in Palembang

Delays (time overruns, SPI < 1) and exceeding budget costs (cost overruns, CPI < 1) on EPC (Engineering, Procurement, Construction) Projects are a global phenomenon due to the very diverse and unique nature of construction projects so that many companies experience losses during construction execution work activities. A very critical job in the execution of EPC projects is fabrication and installation activities which are part of construction activities because there are very many variables that have an impact on cost overruns if the fabrication and installation work is not monitored and controlled properly. In this study, an analysis of the effect of fabrication and installation work on cost overruns was carried out on the Steam Turbine Generator and Coal Boiler Project in Palembang. The analysis was performed using SPSS Ver software. 25 by processing questionnaire data from the answers of 42 respondents. With good control and early anticipation of construction activities so that it can help project managers in managing projects more effectively and efficiently so that the SPI (Schedule Performance Index) and CPI (Cost Performance Index) are more than one and the achievement of other requirements in accordance with project specifications and contracts.

Identification of the main causes of risks in engineering procurement construction projects

Abstract Many risks have adverse consequences for construction projects’ objectives such as quality, schedule, and cost. As engineering procurement construction (EPC) contracts gradually become one of the most common types used in implementing major large-scale construction projects, identifying common risk types and analyzing their root causes is important for developing measures to decrease and eliminate future risks in these types of contracts. The information about the main causes of risks was collected via well-structured questionnaires addressed to construction sector professionals and preparing lists of main potential risks in EPC/construction projects through reviewing literature studies, books, and articles related to this topic. The findings indicate that several causes of risks are more critical for the project including causes related to contract, design and execution, subcontractors, systems, and equipment. The study’s results revealed that the absence of risk management implementation in the EPC construction project is a root cause of the lack of planning and control of the project.

Research on Key Risk Factors and Risk Transmission Path of Procurement in International Engineering Procurement Construction Project

As the core link of Engineering Procurement Construction (EPC) projects, procurement involves a huge amount of money and has a wide range of influence. Once the procurement risks of EPC projects occur, it is easy to cause a domino effect, which can have a huge impact on the cost, schedule and quality of the construction project. Therefore, this paper took international EPC projects as the research object, identifying 25 risk factors related to procurement through case analysis, literature analysis and expert interviews. Integrated Interpretative Structural Modelling (ISM) and Cross-Impact Matrix Multiplication Applied to Classification (MICMAC) method was used to establish the interrelationships between risk factors. Based on the results, procurement risk transmission paths for international EPC projects are developed, and key risk factors are found. Moreover, corresponding risk management suggestions are put forward. The research results impel contractors of the international EPC projects to pay close attention to the key risk factors in the project procurement process. After recognizing the risk transfer path, contractors can take measures to avoid risk to reduce the possibility of project failure as soon as possible. This research can provide support for managing procurement risk in the international EPC project.

Evaluation of Key Factors of Logistics Risks for Overseas EPC Projects

Correctly identifying and evaluating the logistics risks of EPC (engineering procurement construction) projects is conducive to strengthening the risk prevention and control of engineering projects. An evaluation index system for the logistics risk factors of overseas EPC projects was established, and the entropy‐DEA (Data Envelopment Analysis) method used to evaluate and sort risk decision‐making unit (DMU) with risk likelihood and risk consequences as decision variables. The risk reduction ratio and improvement space of each risk DMU are obtained, and the risk factor distribution matrix is constructed, pointing out that legal risks, operational risks and management risks are the primary risk DMU, which provide reference decisions for the optimal allocation of resources. Finally, it is proposed to carefully select overseas logistics carriers, conduct in‐depth research before formulating logistics plans, pay attention to logistics process tracking and supervision, and strengthen logistics packaging and bundling technologies.

Research on Progress Control of Overseas Cement EPC General Contracting Project

The purpose of Engineering Procurement Construction (EPC) general contracting project schedule management is to ensure that the project meets its deadlines, and it plays a critical role in contract performance. In comparison to the domestic general contracting model, project management and coordination are more complex for the general contractor of international EPC projects. As a result, scientific project schedule process control is critical to effectively ensuring project duration, saving project costs, improving project management level, and project quality, and ensuring that the project achieves the promised advantages for both the contractor and the owner. Through the research and analysis of the status of the schedule management of the Indonesia B Project Phase II cement project, corresponding optimization measures are proposed for the project schedule process control.

A Bi-Objective Optimization of Portfolio Risk Response Strategies in Oil and Gas Projects

Risk management and control of project risks have been the intrinsic characteristics of high-rise oil and gas projects in a changing of engineer-procure-construct (EPC) projects. In this research, a novel bi-objective optimization model for the best mixture of projects is proposed. The first objective focuses on maximizing profits and efficiency of risk responses, and the second objective aims at minimizing project direct cost including machinery, human, and material costs to implement proper risk responses over a planning horizon under uncertainty. In this model, risks of the projects are controlled by time, quality, and cost constraints, and the most optimum risk response strategies (RRSs) are selected to eliminate or reduce the impacts of the risks. Thus, the combination of optimum projects with the best RRSs can be selected for an organizational portfolio model. As this model is complex and difficult to solve, another novelty of this paper is to propose a novel hybrid metaheuristic as a combination of red deer algorithm (RDA) and particle swarm optimization (PSO) to address the proposed optimization model. Multi-objective assessment metrics are also employed to have a comparison among this hybrid metaheuristic and its individual ones. Finally, to assess the proposed solution method and the developed model, the empirical result and sensitivity analysis are carried out. Some large-scale high-rise EPC projects and their associated risks are evaluated as our test cases in this study and managerial insights are concluded from the results.

A modified particle swarm optimization for risk assessment and claim management in engineering procurement construction projects

Abstract From project beginning to completion, different kinds of risk factors influence the performance of construction schedule and construction project cost and time. Usually, the integrated risks are allocated via the project management contract assessment. The construction claim involves huge crashes based on project time and cost, which accomplishes successful claim management. In this paper, we proposed a Modified Particle Swarm Optimization (MPSO) algorithm-based claim management system via the Engineering Procurement Construction (EPC) concept. This context considers both project time and cost are the objective functions. The construction process satisfies the minimum requirements of the engineer in order to obtain these objective functions. Next to that, the project managers view the document in case of project time and delay to take the final decision. This article utilizes the MPSO algorithm to achieve an efficient better system quality along with the EPC based claim management system with minimized project cost and time. The case study based on the refinery plant project is analysed. The experimental results demonstrate minimum project time and delay based on the MPSO algorithm and it evaluates better system stability and effectiveness.

Assessing Risk on The Engineering Procurement Construction (EPC) Project from The Perspective of The Owner: A Case Study

Risk is part of infrastructure projects, and EPC projects are no exception. Risk is a consequence of uncertainty conditions. In construction projects, the risk cannot be predicted because there are a lot of uncertainties in predicting problems [1]. The risks in different types of contract projects would also be different, because of the different characteristics of each contract. In this study, the risk of construction projects was reviewed based on the project life cycle of the E.P.C (Engineering Procurement Contract) contract. The aim of this study is to analyze the risk from the perception of the owner of the project with the Engineering, Procurement, and Construction contract type. Primary data collected were in the form of identification and assessment of the impact and risk probability obtained by interviews and questionnaires. Data analysis was done with the Risk Breakdown Structure method to determine the risk ranking. The risk analysis of the Engineering Procurement Construction project from the owner’s perception showed that the majority risk was risk in the low category (46%), then moderate risk (27%), and high risk (27%).

Analysis of synergy degree and its influencing factors in hydropower EPC project management

The use of engineering procurement construction (EPC) mode is currently a trend in hydropower engineering construction. The clarification of the internal relationship between hydropower EPC projects and the realization of synergy has great significance in improving management efficiency and implementation effect. In this work, a three-dimensional system and a system model of hydropower EPC project management synergy are constructed. The mechanism and factors that influence the degree of management synergy are analyzed on the basis of management synergy theory. Furthermore, the evaluation index system and the degree of synergy model are established, and grey relational analysis is utilized to identify the key factors that affect the synergy degree. Thus, this study aims to facilitate the hydropower EPC project management synergy, provide a quantitative method for synergy degree evaluation, and propose corresponding promotion strategies. Results show that the order degree of each subsystem presents a steady upward trend. Specifically, the order degree of the subsystem at the trial operation stage is low, which is the major restriction on the further improvement of the synergy degree of EPC project management. The key factors in improving the synergy level of hydropower EPC project management are mainly concentrated in the information and organization synergy subsystems, including the construction degree of information platform, the performance of functions, the timeliness of information transfer, and the functions of the information platform.

Enhancing Risk Management by Partnering in International EPC Projects: Perspective from Evolutionary Game in Chinese Construction Companies

Research on risk management in Engineering–Procurement–Construction (EPC) projects has received increasing attention. It is essential to integrate the resources of all participants into the risk management process optimally from the perspective of evolutionary games. The conceptual risk management model in the delivery of international EPC projects is developed in the study. Based on the data from an industry survey, the model has been validated. The path analysis shows that partnering not only directly contributes to interface management and risk management, thereby improving project outcomes, but also has a positive impact on risk management through enhanced interface management. The case study illustrates how partnering has a close linkage with interface management and risk management to achieve superior project performance, confirming the analysis of evolutionary game. The results suggest that contractors’ success in applying partnership can play an exemplary role for other contractors, and governments can create a favorable environment to stimulate participants using win–win philosophy for better infrastructure development.

Mapping Delay Risks of EPC Projects: A Case Study of A Platform and Subsea Pipeline of An Oil and Gas Project

More than 80% of oil and gas projects around the world experience delays, which may result in huge financial implications to the contractors and the owners. Therefore, it is important to manage delay risks factors to meet the target of project completion dates. The purpose of this study was to map delay risk factors of Engineering, Procurement, Construction (EPC) projects using a case study of a platform and subsea pipeline of an oil and gas project. Data was collected through observations and analysis of project documents, and interviews with respondents in managerial and engineer levels. A total of 28 delay risk factors was identified and quantified in terms of their probabilities and impacts. This research found 1 extreme risk (4%), 15 high risks (54%), 11 medium risks (39%) and 1 low risk (4%). The top five risk factors include, i.e. contractor’s financial capability, delay in delivery of long-lead items, changes in the project scopes, delay of detailed engineering design (DED), lack of experience of contractors. These findings are beneficial for contractors and owners of oil and gas projects to understand delay risks better and to formulate risk mitigation strategies properly.