Study The Procurement Management Of The Electric Power Construction In EPC Project

In the construction of some large-scale electric power facility such as transformer substation,EPC(engineering\procurement\construction) mode gradually become a prevalent one in terms of construction management. Enforcing contract in a periodical delivery system in EPC mode, construction unit aims to reduce project investment outlay and avoid investment risk so as to achieve a quick return. For this reason, more concentration must be put on the limited time for a project. Meanwhile, EPC project demands a high control level of the contractor, who encounters both economic risks caused by fluctuations in price or exchange rate and major external risks. Therefore, it is an urgent issue for Hengyuan company to develop itself all around in the electric power construction market by employing the EPC mode to prevent contract risk and achieve both social and economic benefits.To carry out an EPC project, project purchasing, including purchasing materials and service, plays a key role in connecting design and construction. The quality and efficiency of purchasing management will affect its design and construction and determine the final effect of EPC and the profit of the project. Therefore, purchasing management is of great importance to an EPC project.According to the EPC mode, the contractor is expected to obtain all materials such as the main equipment, materials, fragment data, standby redundancy, and responsible for selecting and controlling labor subcontracting. As a link in the EPC project, purchasing management helps to make sure that the design and construction go well side by side, and purchasing efficiency directly contributes a lot to the design and construction, and the final implementation of the project as well. So purchasing management is supposed to link all parts well. It must be designed in advance in a project, which offers specifications, models, and technical requirements. While purchasing, the full understanding of the key material suppliers'production capacity, fiduciary duties, and supplying schedule is helpful to settle down the price of materials beforehand. Only by analyzing the feasibility of design parameter and picturing the purchasing status, can the company put forward some specific purchasing programs and select the qualified suppliers according to the key indices for Purchase Control. Only in such a positive response can the company make the design parameter work. The good quality and efficiency of purchasing determines an effective implementation of a blueprint, which ensures a good beginning. As a proper connection between purchasing and construction, efficient purchasing management can not only meet the needs of gaining more economic interests but also the overall construction scheduling, according to which, the purchasing department arranges the time and the order for accepting constructional materials and make sure everything done in an orderly manner. For this reason, purchasing management is a powerful guarantee for design alteration, schedule variance, the quality improvement, risk reduction and profit gains.Besides searching for multiple suppliers, the company needs to promote a co-operation between specialists and labor sub-tractors while enforcing the EPC program. Therefore, as an essential part of purchasing management, the efficient management of subcontractors also contributes to the final success of the project. From this perspective, the thesis probes into the power construction on the basis of refining & petrochemical integration by Hengyuan Company, and expounds the subcontracting concept, subcontracting patterns, and the coordination with subcontractors designated by construction unit.Concerning its vital status in the power construction enterprises, the procurement ranging from vast materials to various industries, needs to focus on reinforcing its management. On such theoretical foundation, the thesis takes the case of EPC of the power construction which based on refining & petrochemical integration by Hengyuan Company, to analyze the present problems with its purchasing management in the perspective of strengthening supply chain management and optimizing purchasing performance appraisal, and throw some light on some reforming measures concerning the total cost of ownership, purchasing platform and the effectiveness of purchasing performance appraisal.