The Study On The Risks Of Quotation For Overseas EPC Projects

The "go out" and "One Belt And One Road" strategy implemented in China in recent years,This has brought great opportunities for Chinese contractors to carry out infrastructure construction and international production capacity cooperation.The number of overseas projects that they participated in has continued to increase,and the EPC mode was getting more popular,some of which were driven by the investment.However,some EPC projects has failed due to improper quotation,thus the risk of bidding quotation is worth studying.In this paper,the author has screened out and analyzed risk factors in quotation from the aspect of international contractors’ position by analyzing the EPC operation process,project environment and combining with past management eaperience and put forward the planning of risk control through analysis of four cases,to make the quotation both competitive and profitable.After statistical analysis and factor analysis to the preliminary selected Risk factors,we have identified 10 top factors affecting the accuration of quotation:whether the contractor has carried out on-site investigation and deep survey,whether the main quantity on which quotation is based is accurate,social security status in the area where the project located,the design capacity of the EPC contractors,the particularity of the origin of the project,enterprise strategy and risk appetite,interference by the owner to the contractor in management process,pre-stage responsibilities borne by the contractor which originally belongs to the owner,internal cooperation,supplier monopoly,etc..The paper analyzes the sources of quotation risk of international EPC project from five aspects of uncertainty of project environment,capital uncertainty and integrity of the owner,terms of the contract,comprehensive capability of the EPC contractor and the organization of quotation process,and puts forward response measures for the risks in early stage investigations,construction plan,organization of quotation process and decision-making process in the bidding process.In the last section,the author provides four international EPC projects with different risk characteristics,to verify the feasibility and reliability of risk management through risk identification,assessment and response and later stage feedback.