The Contract Risk Management In International EPC Projects:from The View Of Contractors

Nowadays, EPC (Engineering, Procurement, Construction) contract is now widely used. The Contractors shall be responsible for the overall project, which means contractors’contract risk will be increase, so the study of EPC contract risk management is necessary. People have done some research, but there are some limitations:there are few studies about contract risk management in international EPC project, especially FIDIC contract, and there are limited practice cases from the perspective of the contractors; people always study contract Risk Management with qualitative method, more quantitative method is needed; we are lack of systematic study of the problem in specific international project, and specific measures to prevent and control risks in the contract management system needs to be improved.This paper first discusses the EPC mode and contracts, risk theory, and utility theory. Based on these theories, then use FIDIC contract terms to identify the contract risk from the perspective of the contractors, and combined the terms with risk to analysis. Then the paper combines risk multidimensional theory and the utility theory to create a new method for international EPC contract risk evaluation. And use this method to analysis and evaluate an international EPC project case, put the method into practice. At last, this paper gives some recommendations to deal with the contract risk of the international EPC project from the perspective of the contractors, and proposes to establish an international EPC contract risk management system, then gives a dimensional model system based on three dimensions. It has theoretical and practical significance.