2 1 EPC project general contracting process control points (attached)

EPC is a general contracting mode of engineering, which is the integration of engineering procurement and construction (EPC is engineering (design) and procurement (construction)).

General contracting refers to the whole process or several stages in which the owner entrusts the general contracting enterprise to contract the design, procurement, construction and trial operation of the construction project according to the contract. (Excerpted from GB/T 50358-20 17 Management Specification for General Contracting of Construction Projects)

Advantages of general contracting of projects

For the owner, compared with the traditional mode of bidding separately for design and construction, the advantages of EPC project general contracting mode mainly include:

The contractual relationship is simple and clear. EPC project general contracting mode simplifies several contracts signed in the past such as design, construction and procurement into EPC project general contracting contract. The contract subject is simplified, the contract relationship is simple and clear, and the owner's management responsibility, audit workload and the number of risk sources in the construction process are greatly reduced, which is helpful for the owner's initiative in management.

Communication channels are more direct. EPC project general contracting mode is a contracting mode integrating design, procurement and construction. This general contracting mode, which brings together highly specialized and familiar division of labor units, is helpful to reduce communication links, improve project work efficiency and construction speed, scientifically and reasonably allocate project duration and realize project optimization.

At the same time, due to the bidding of EPC general contracting project, bidders need to complete a certain depth of drawing design when compiling bidding documents, which greatly increases the bidding cost of bidders, thus reducing random registration and insincere bidding behavior to a certain extent, and improving the pertinence and effectiveness of bidding to a certain extent.

Projects suitable for general contracting mode

For projects with clear construction content and mature technical scheme, the general contracting method is applicable. (Quoted from the Measures for the Administration of General Contracting by the Ministry of Housing and Urban-Rural Development)

Bidding stage of project general contracting

The owner shall complete the project approval, approval or filing procedures before the contract is awarded. Enterprise investment projects that adopt the general contracting method will be contracted out after being approved or put on record. In principle, government investment projects that adopt the general contracting method should be contracted out after the preliminary design approval is completed; Among them, government investment projects that simplify the approval documents and procedures in accordance with the relevant provisions of the state shall be awarded after the approval of the corresponding investment decisions. (Quoted from the Measures for the Administration of General Contracting by the Ministry of Housing and Urban-Rural Development)

Therefore, when the general contracting mode is adopted, the design is generally divided into two parts, one part is the scheme and preliminary design content, which is completed before the general contracting bidding, and the other part is the construction drawing design, which is included in the general contracting bidding scope.

When the total construction period of the project permits, the general contracting tender will be conducted after the preliminary design is completed and the preliminary design review is completed.

Content requirements of bidding documents

The owner shall, according to the characteristics and needs of the project subject to tender, prepare the tender documents for the general contracting project, which mainly include the following contents:

(1) Instructions to Bidders;

(2) bid evaluation methods and standards;

(three) the main terms of the contract to be signed;

(4) Project objectives, scope, design and other technical standards required by the Employer, including clear requirements for project content, scope, scale, standards, functions, quality, safety, energy conservation, ecological environment protection, construction period and acceptance;

(five) the information and conditions provided by the owner, including the hydrogeological, engineering geological and topographic survey data completed before the signing of the contract, as well as the feasibility study report, scheme design documents or preliminary design documents. ;

Format of bidding documents;

(seven) other materials required by the bidder.

The owner may put forward the performance guarantee requirements in the tender documents, requiring the tender documents to specify the contents of subcontracting according to law; If there is a maximum bid price limit, it shall be clear about the maximum bid price limit or the calculation method of the maximum bid price limit.

It is suggested to use the model text of the general contracting contract formulated by the Ministry of Housing and Urban-Rural Development in conjunction with relevant departments.

(Quoted from the Measures for the Administration of General Contracting by the Ministry of Housing and Urban-Rural Development)

The scheme and preliminary design unit can participate in the project general contracting bidding.

The project proposal, feasibility study report, preliminary design document preparation unit and its evaluation unit of government investment projects shall generally not become the general contractor of the project.

If the tenderee of a government-invested project discloses the completed project proposal, feasibility study report and preliminary design documents, the above-mentioned units can participate in the bidding of the general contracting project of the project and become the general contracting unit of the project after bid evaluation and selection according to law. (Quoted from the Measures for the Administration of General Contracting by the Ministry of Housing and Urban-Rural Development)

Risks borne by the owner

(1) The price of main engineering materials, equipment and labor fluctuates more than that agreed in the contract compared with the bidding base period price;

(2) Changes in contract price caused by changes in national laws, regulations and policies;

(3) Changes in project cost and construction period caused by unforeseen geological conditions;

(four) the change of project cost and construction period caused by the owner;

(5) Changes in project cost and construction period caused by force majeure.

The specific content of risk sharing shall be agreed by both parties in the contract.

Encourage owners and general contractors to use insurance to enhance their risk prevention capabilities.

(The above is quoted from the Measures for the Administration of General Contracting by the Ministry of Housing and Urban-Rural Development.)

Contract and measurement

Lump sum contract should be adopted in the general contracting of enterprise investment projects, and the contract price form should be reasonably determined in the general contracting of government investment projects. If lump sum contract is adopted, the total contract price will generally not be adjusted unless it can be adjusted as stipulated in the contract.

The owner and the general contractor may stipulate the measurement rules and valuation methods of the general contractor in the contract.

(The above is quoted from the Measures for the Administration of General Contracting by the Ministry of Housing and Urban-Rural Development.)

Characteristics and control suggestions of general contracting mode of engineering

Compared with the traditional mode of bidding separately for design and construction, the general contracting mode of the project is the integration of design and construction and equipment procurement. Other contracts are the same, such as entrusted services such as cost consultation and project supervision, and special projects such as municipal facilities are still entrusted by the owner alone.

Therefore, the management and control problems encountered in the general contracting mode will also be encountered in the traditional bidding mode of design and construction. However, because the general contracting mode is an integrated form of design and construction, the bidding scope and contract agreement are different from the traditional mode, so the possible solutions are different after encountering the same problem.

In order to better analyze and solve the problem, first of all, from a fair and reasonable point of view, we analyze the responsibilities of both parties in the general contract as follows:

(1) The owner should bear external environmental risks, such as the risk of demand change, such as policy risk, such as the risk of specification change, such as the risk of price increase.

Because these risks, no matter which contracting mode is adopted, are unpredictable by the contractor, and have little correlation with the contractor's management level and decision-making ability, but are closely related to the overall environment in which the construction period is located.

It is appropriate for the owner to bear such problems that will be encountered and faced by any construction mode and any contracting enterprise.

(2) The general contractor of the project shall bear internal implementation risks, such as management risks, quality risks, safety risks, risks caused by quality changes of drawings, risks of professional design conflicts, and risks of mismatch between drawings and project progress.

Due to the risk of drawing quality change, conflict between professional designs and mismatch between drawings and project schedule, these risks are often borne by the owner in the traditional mode, but by the general contractor in the general contracting mode.

Based on the above analysis and responsibility allocation, we have the following suggestions on the management and control of the owner under the general contracting mode (simple quality, safety and schedule control, because it is very mature in the traditional mode, the construction management part under the general contracting mode can still exist alone, and will not be mentioned in the following suggestions. The following suggestions focus on the characteristics of the general contracting mode for analysis and suggestions):

Risk control of demand change

The risk of demand change mainly includes functional demand change and quality demand change. The change of functional requirements is mainly manifested in the building function itself, such as adding functional rooms and equipment such as canteen, rain room and sports room, as well as roof greening and leisure facilities. The change of quality demand is mainly manifested in indoor and outdoor decoration effect, landscape effect, night lighting decoration effect and so on.

The risk control of demand change is mainly realized through the following aspects:

(1) As the preliminary scheme and preliminary design are part of the tender documents for general contracting of the project and the basis for bidding, the preliminary work should reach a certain depth requirement, and fully understand and express the needs of the owner. For government investment projects, there is a special preliminary design review, but the review experts may not have sufficient communication with the owners, and often can only conduct a purely technical review of the design and budget estimate itself. Therefore, it is suggested that the owner must provide basic information, organize relevant departments and experts to conduct reconnaissance and full communication, and ensure that the integrity of the preliminary design is reviewed on the basis of fully understanding the owner's needs. For projects without mandatory preliminary design review, the owner should refer to government-invested projects and organize relevant experts to review them to ensure that the decision-making risks are controllable.

(2) The technical requirements in the tender documents shall be detailed and accurate. The technical requirements in the tender documents should be a very detailed construction drawing design task book, which should fully express the key parts and quality requirements that the owner cares about. It is suggested that the owner organize relevant departments and experts to review the technical requirements in the bidding documents to ensure that the decision-making risks are controllable.

(3) The scoring method should be targeted, and the evaluation of bidding documents should be detailed and accurate. In the traditional construction general contracting bidding, most enterprises are competent except for special projects with targeted requirements for construction technology. In bidding, although the standardization degree of bidding documents of many enterprises is quite different from that of the actual project department, it is difficult to open the gap in the technical bid score at the bidding stage. In general contracting bidding, design drawings are an important part of bidding documents, and the project is highly targeted, so it cannot be replaced by standard bidding documents, and must be compiled in a targeted manner. Excellent design drawings and accurate understanding of the owner's needs are of great significance to the implementation of the overall project. Therefore, the proportion of design documents in the scoring method should be expanded, and the design ability and design understanding of the project owner's needs should be evaluated. At the same time, specific scoring rules should be set according to the owner's concerns.

(4) The cost index of each special project should be equivalent to the overall quotation level, and should be similar to similar buildings. In the EPC project general contracting bidding stage, it is objectively difficult to realize the in-depth bidding of all-professional drawings and construction drawings, but the bidding quotation is all-professional and full-range, and once unbalanced quotation is adopted, it will be very risky in the later stage. In order to prevent unbalanced quotation, the cost indexes of special projects such as decoration and garden landscape should be evaluated according to the Assessment Methods for Preventing Unbalanced Quotation of General Contracting of Construction, so as to ensure the consistency of the quality of each special project from the source.

② Risk control of drawing quality

Design is an important part of the general contractor, and the quality and progress of drawings play a very important role in the quality and progress of the overall project.

Drawing quality risks include not only the safety risks caused by the general contractor's substandard drawings and lowering the design standards, but also the tenderee's ability to provide professional and excellent construction drawing design services according to the requirements of quality and time schedule, and more importantly, the tenderee's ability to provide full-professional design planning and collaborative design management services.

The risk of drawing quality is suggested to be controlled from the following aspects:

(5) the general contractor's previous design experience and performance, as well as industry credit evaluation;

(6) General contractor's previous general contracting management experience, performance and credit evaluation;

(7) Whether there is integrated design or integrated design management system and ability in the bidding documents of the general contractor of the project, whether there are institutions and persons in charge of overall overall management of various specialties and special designs in the bidder structure, and the establishment time, qualifications and performance of relevant institutions and personnel.

(8) The construction drawing design results of the general contracting unit of the project, in addition to the drawing review organization required by the state, suggest entrusting experts or a third party to conduct a comprehensive review and evaluation on the economy, durability and advanced practicability of the construction drawing design results. The construction drawing design results shall be released and implemented after being confirmed by the owner.

(3) Selection mechanism of tendering units

(9) On the scoring method, the design part in the bidding documents should be scored according to the control requirements of demand change.

(10) The composition and experience of the bidder shall meet the technical characteristics of design, construction and procurement of the project subject to tender.

(1 1) The bidder shall have institutions and full-time personnel responsible for the management and coordination of general contracting. It should be noted that the construction general contracting management focuses on the overall management of construction based on drawings, which is not the same dimension as the overall management of design, construction and procurement. Under the general contracting mode, the institutions and full-time personnel for general contracting management and coordination are indispensable.

(12) The tender documents shall contain professional and meticulous management measures for general contracting of the project, which shall be formulated in combination with the characteristics of the project.

(D) Process management risk control

At this stage, the general contractor of the project has both design and construction qualifications, and some design and construction teams form a consortium to bid. When forming a consortium to bid, there are two types: design unit and construction unit.

(13) No matter which type of general contractor wins the bid, it is necessary to improve the general contracting implementation plan, compile the implementation details and assign special personnel to manage the general contracting according to the requirements and scheme of the bidding documents and the characteristics of this project. Enterprise qualification does not fully represent the ability of the project department, so the assessment and supervision of the project department should be strengthened. The owner should set assessment methods in the bidding documents and contracts, and conduct targeted assessment management in the management process to ensure the orderly management of general contracting.

(V) Risk control of design progress

(14) After winning the bid, the general contractor will decompose the project progress plan according to the time limit and time limit nodes agreed in the contract, and at the same time, according to the project progress plan, considering the time of drawing review, prepare the design progress plan of each specialty and special project, and organize relevant work as planned.

(vi) Risk control of procurement management

(15) After winning the bid, the general contractor shall decompose the project schedule according to the time limit and time limit nodes agreed in the contract, and at the same time, prepare the procurement work plan according to the project schedule and design progress, and organize relevant work as planned.

(16) The owner shall specify the brands, materials or grades of the equipment and materials mainly involved in the tender documents, and the bidder shall specify the brands or grades corresponding to the tender offer in the tender documents.

(VII) Risk control of additional changes

(17) For the change of drawings, the reasons for the change shall be made clear and used as the final settlement basis. The reason for the change of the owner's demand should be considered when settling accounts.

(8) Process control of drawing optimization

(18) Because no matter what construction method is adopted, due to the short design cycle at this stage, the change and negotiation of drawings caused by imperfect or incomplete drawings are objective. In order to balance this part of the expenditure, the general contractor should be agreed and encouraged to optimize the drawings. In order to give consideration to the interests of the owner, when agreeing and encouraging the general contractor to optimize the drawings, the control system for drawing optimization should also be clearly stipulated in the bidding documents or contracts.

(9) Process control of measurement audit

Drawings and bill of quantities will be provided when the project is generally contracted, but objectively speaking, the drawings at this time are incomplete and insufficient. If the construction drawing review is not carried out, the design of special construction drawings such as curtain wall deepening, decoration, landscape and night lighting is often not carried out or is quite different from the standard depth, and the equipment room combined with municipal facilities has not yet been combined with the specific requirements of the professional commission office. Therefore, the bill of quantities at this time is not detailed and accurate.

(19) Therefore, both parties to the general contracting contract should reach an agreement on the pricing principle of the total contract price and the measurement and payment rules in this process.

(20) When the fixed lump sum contract is adopted, it is recommended to audit the incremental part, but not the part in the contract. During the construction, the progress payment shall be measured and paid according to the completed position and proportion. Fixing lump sum contract is beneficial to total price control and arousing the enthusiasm of the general contractor. It is suggested that the owner try to adopt the fixed lump sum contract.

(2 1) When adopting the rate bidding, the process measurement and completion settlement can be carried out according to the fluctuation ratio of the winning bidder. Rate bidding seems to be clear in measurement, but it can't be clear about the part without quota and budget price, especially for special projects such as decoration and landscape, but the biggest disadvantage of rate bidding is that it is not conducive to total price control, because it is an open contract and is not conducive to mobilizing the enthusiasm of the general contractor, which needs the attention of the owner.

Risk control of professional subcontracting

Objectively speaking, all construction general contractors will subcontract mechanical and electrical installation, decoration engineering, curtain wall engineering and other professional projects, as well as the general contractor of the construction section. Therefore, the owner should pay attention to the professional subcontracting and management mechanism of the general contractor.

After winning the bid, the general contractor of the project shall submit the professional subcontracting plan for project implementation, specify the professional subcontracting plan, credit requirements and management requirements of professional subcontracting, and implement it after being reviewed by the supervision unit and the owner.

Extended reading:

Advantages of EPC general contracting mode

1)EPC general contractor is responsible for the implementation process of the whole project, not as a separate subcontractor to build the project, which is conducive to the overall planning and cooperative operation of the whole project, can effectively solve the problem of the connection between design and construction, reduce the intermediate links between procurement and construction, and smoothly solve the contradiction between practicality, technology and safety in the construction scheme;

2) The scope of work and responsibilities are clear, and the responsibilities and risks during construction can be transferred to the general contractor to the greatest extent;

3) The total contract price and construction period are fixed, and the owner's investment and construction period are relatively clear, which is beneficial to cost and schedule control.

4) Give full play to the advantages of all parties in project management and achieve the project management objectives;

5) Liberate the owner from specific affairs, pay attention to the main factors affecting the project, and ensure the general direction of project management.

Shortcomings of EPC general contracting mode

1) The owner mainly supervises the EPC contractor through the EPC contract, with a low degree of participation and control during the project implementation;

2) The owner transfers the project construction risk to the EPC contractor, so the selection of the contractor is very important. Once the contractor has major problems in management or finance, the project will also face great risks;

3)EPC contractors have great responsibilities and high risks, and they will consider managing input costs, profits and risks when undertaking general contracting projects, so the project cost level of EPC general contracting contracts is generally high;

4) It is quite different from the traditional construction mode, so it is difficult for the owners of traditional industries to understand and cooperate with the contractor's work.

EPC management process and main flow chart

1) Flow chart of EPC general contracting construction mode

2) Flow chart of 2)EPC general contracting construction mode plan management

3) Management flow chart of the implementation process of 3)EPC general contracting construction mode

4) 4) Flow chart of tracking control of EPC general contracting construction mode

5)EPC general contracting construction mode contract management flow chart and risk analysis

6) 6) Flowchart of bidding stage of EPC general contracting construction mode

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