Engineering Procurement Construction Research Articles

Review of Cost Control Research in Prefabricated Construction under EPC Mode

Aims: Amidst the accelerating global urbanization and growing demand for sustainable development, prefabricated construction emerges as a pivotal transformational force in the construction industry due to its efficiency and environmental friendliness. This paper comprehensively reviews cost control research in prefabricated construction under the EPC (Engineering, Procurement, Construction) model. Study Design: The study adopts a literature-based approach, incorporating findings from domestic and international scholars, to uncover the critical issues and challenges in cost control within the EPC framework. Additionally, it analyzes the application of technological innovations such as BIM (Building Information Modeling) and DEMATEL (Decision Making Trial and Evaluation Laboratory) in cost control, offering a theoretical foundation and practical guidance for prefabricated construction under EPC. Place and Duration of Study: The research spans various regions globally, examining recent practices and theoretical advancements in cost control for prefabricated construction projects under EPC over the past decade to ensure timeliness and comprehensiveness. Methodology: The methodology encompasses a systematic literature review to construct a theoretical framework, coupled with an analysis of case studies showcasing effective cost control measures. Furthermore, the study explores the utilization of BIM and DEMATEL to enhance cost prediction accuracy, process monitoring, and decision-making support. Results: The findings reveal that the EPC model facilitates more systematic and efficient cost control in prefabricated construction. The application of BIM significantly improves cost forecasting precision and process transparency, enabling timely cost deviation identification and correction. DEMATEL effectively identifies key cost drivers and their interrelationships, informing targeted cost control strategies. Conclusion: This paper underscores the significance of cost control in prefabricated construction under the EPC model and highlights the pivotal role of BIM and DEMATEL in enhancing cost control effectiveness. It concludes by advocating for deeper integration of prefabricated construction with the EPC model to propel the green, intelligent transformation and sustainable development of the construction industry.

Evaluation of Influencing Factors on the Supply Chain of Prefabricated Buildings under Engineering Procurement Construction Model: A Case Study in China

Evaluation of Influencing Factors on the Supply Chain of Prefabricated Buildings under Engineering Procurement Construction Model: A Case Study in China

How Do Developers Influence the Transaction Costs of China’s Prefabricated Housing Development Process? An Investigation through the Bayesian Belief Network Approach

The implementation of prefabricated housing (PH) has become prevalent in China recently due to its advantages in enhancing production and energy-saving efficiency within the construction system. However, stakeholders may not always fully realize the benefits of adopting PH due to the emergence of transaction costs (TCs) in the development process of such projects. This study investigated the strategies for developers to make rational choices for minimizing the TCs of the PH project considering their own attributes and external constraints. A Bayesian Belief Network model was applied as the analytical method, based on surveys conducted in China. A single sensitivity analysis indicated that developers influence the TCs of PH through the following three most impactful factors: prefabrication rate, PH experience, and contract payment method. Integrated strategies are recommended for developers in various situations based on a multiple sensitivity analysis. Developers facing challenges due to high prefabrication rates are advised to reduce the risks by procuring highly qualified general contractors and adopting unit-price contracts. For developers with limited PH experience, adopting the Engineering–Procurement–Construction procurement method is the most efficient way to reduce their TCs in the context of China’s PH market. This study contributes to the current body of knowledge concerning the effect of traders’ attributes and choices on TCs, expanding the application of TC theory and fulfilling the study on the determinants of TCs in construction management.

Critical factors influencing the cost in engineering–procurement–construction (EPC) projects: A case study of prefabricated buildings (PBs) in China

Critical factors influencing the cost in engineering–procurement–construction (EPC) projects: A case study of prefabricated buildings (PBs) in China

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.

Exploration on the Innovation Model of County Urbanization Development with the Resource Constraints in China

The 14th Five-Year Plan for China proposes to promote the urbanization process from a county perspective, presenting an unprecedented opportunity to develop county urbanization. However, in the context of relatively limited resources, insufficient funds, and comparatively lower land values in Chinese counties, how to promote county urbanization remains the primary challenge, which has not been studied yet. This study first analyzes the necessity of promoting county urbanization from four dimensions: national development strategy, industrial policy development, local government status, and enterprise development demands using literature research and survey interviews. Based on field research conducted in 32 counties in China, the strengths, weaknesses, opportunities, and threats (SWOT) analysis is carried out on the county urbanization process in this study. By analyzing the developmental status and challenges of major urban areas, expansion areas of counties, and their surrounding countryside, this paper proposes a “three-level gradient integration” concept for the spatial integration of county urbanization. Furthermore, the mechanism of multi-agent linkage to promote county urbanization was explored based on the theory of urban governance and the characteristics of county urbanization. Subsequently, relying on the analysis of policies, such as land acquisition and integrated land improvement, and adopting modes, such as “Investor + Engineering Procurement Construction + Operation” (investor + EPC + O) and renovate–operate–transfer (ROT), we propose a pathway for promoting county urbanization through the linkage of government, enterprises, and residents. This study provides insight into promoting the county urbanization process. Additionally, each country faces the common issue of how to use limited resources to promote regional development, and this article can provide valuable insights and inspiration for addressing this shared issue by the principle of adapting to local conditions and adhering to the concept of efficient market and proactive government.

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.

Research on EPC Construction Mode of China Informatization Project

EPC(Engineering, Procurement, Construction) has a history of decades in global development, has been introduced to China for more than 40 years, and is widely used in China's chemical, electric power, construction, energy, and other construction projects. With the development of informatization in China, the construction mode of informatization projects continues to evolve, and the EPC construction mode has also been applied and promoted in the informatization industry and has promoted the construction efficiency of informatization projects. The author analyzes and studies the development of EPC in China and the application and practice of EPC mode in informatization projects, and makes a case analysis through the EPC construction mode practice of informatization projects. Through the analysis and case study, the author provides reference and reference for the construction of informatization projects using EPC mode in the development of the digital economy in China.

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.

Building the world's largest Chemical Looping Combustion (CLC) unit

The world's largest Chemical Looping Combustion (CLC) demonstration unit is being built close to the city of Chengdu in China. The design and construction of the unit, as well as the coming testing, is done within the CHEERS project, which is a collaborative project between Europe and China. The funding (∼25M€) comes from several of the project partners, in addition to EU's Horizon2020 and China's Ministry of Science and Technology (MOST). TotalEnergies has been responsible for the Front-End Engineering Design (FEED) study. The investment decision from December 2021 marks the transition from the R&D studies and design phases to Engineering, Procurement, Construction (EPC) and testing phase. The EPC phase has been led by Dongfang Boiler Co.,Ltd, and the demonstration unit is located at their technology development site in Deyang City, outside Chengdu in China. It is designed for a thermal input of 2–4 MW and includes two different reactor configurations. The first configuration is optimized for conversion of pet-coke, while the second one is tuned towards conversion of lignite. The oxygen carrier (OC) that will be used for the demonstration unit (ilmenite) will be presented, together with an overview of the various OC materials that were tested at various scales (up to 150 kWth) during the first part of the project. In addition, results from testing of a cold mock-up of the unit is presented. Finally, an overview of plans for the rest of the project is given, together with some thoughts related to intercontinental collaboration in highly collaborative projects, such as CHEERS.

Research on Collaborative Mechanisms of Railway EPC Project Design and Construction from the Perspective of Social Network Analysis

With the promotion of Engineering Procurement Construction mode in railway construction projects, collaborative management between design and construction has faced increasing challenges due to complexities of the participants and the various professional fields involved in railway EPC projects. This paper aims to analyze the issues present in the collaborative management of railway EPC project design and construction. Utilizing the social network analysis methodology combined with the Wuli–Shili–Renli (WSR) system methodology, a network model was established to explore relationships between design and construction management. This study investigates network-influencing factors and proposes targeted measures to enhance project management efficiency. The findings indicate that coordination and communication mechanisms, organization building, interface management systems and design management systems represent core network elements that significantly impact railway EPC collaborative management. These elements are closely related to other network factors. The research not only advances design and construction coordination theory, but it also introduces new ideas for engineering practice.

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.

A rationale-augmented NLP framework to identify unilateral contractual change risk for construction projects

Construction projects often see owners who exert their dominance by modifying the standard contracts without contractors’ prior consent. This can lead to undesirable outcomes for contractors, thus referred to as unilateral contractual change risk (UCCR) in this study. As such, identifying UCCR proactively becomes essential for contractors, particularly in engineering-procurement-construction (EPC) projects where the claim scope is limited. Although natural language processing (NLP) has shown promise in the identification of UCCR, it faces difficulties due to the high cognitive demands required. To fill the gap, we propose a rational-augmented NLP framework that emulates human reasoning to identify UCCR in EPC contracts in an explainable and effective manner. The framework (1) leverages NLP techniques to disassemble contract text into features that draw the attention of human readers for obligation-related comprehension, and (2) generates a coherent sequence of intermediate reasoning steps using a customized Microsoft Excel and-in interface to identify predetermined categories of UCCR. Our framework, which achieves an outstanding F1 score of 0.87, is trained on a widely used standard form of EPC contract. It also presents a user-friendly interface for contractors to discern any intentional or malicious acts committed by the owner during the contract stage. Furthermore, our methodology can be adapted to enhance risk management in other sectors.

Cost Overruns in Engineering Procurement Construction (EPC) Fabrication Oil and Gas Megaprojects in Malaysia: The Issues of Resource Allocation (5M)

Cost Overruns in Engineering Procurement Construction (EPC) Fabrication Oil and Gas Megaprojects in Malaysia: The Issues of Resource Allocation (5M)

Business Strategy Proposal for Solar Energy EPC Company

Catur Elang Energi (CEE), as one of the business diversifications of PT. Catur Elang Perkasa was established in 2020 to support Indonesian government to increase the new and renewable energy contribution in Indonesia by providing EPC (Engineering, Procurement, Construction) service for roof top solar power plant. In 2022, revenue generated from their operations is not good enough to achieve the target given by management. This research conducted to know the external and internal factor and propose strategy to improve CEE performance. This study further analyzes how the company runs its business from an external and internal perspective. This study uses external analysis such as PESTEL analysis, Porter’s five forces, and competitor analysis. Moreover, there are also internal analysis such as Segmenting, Targeting Positioning (STP) analysis, Marketing Mix. Then a further analysis was conducted by using a SWOT analysis to determine the strengths, weaknesses, opportunities, and threats of Catur Elang Energi business. Business Model Canvas used to define and communicate Catur Elang Energi business and TOWS Matrix will help Catur Elang’s develop its business and sales. the recommendation given include product development for solar energy related product, promotional campaign, developing agent network, and partnership with financial institution. Strategy implementation in the form of Gantt chart also made based on recommendation that can be implemented by PT. Catur Elang Perkasa.

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.