Research On Risk Assessment Of Material Procurement For International EPC Projects

Under the impetus of the "Going Global" strategy and "The Belt and Road" initiative,China has made considerable progress in contracting foreign projects delivered by Chinese contractors.Engineering Procurement Construction(EPC)has been widely adopted by owners and contractors in international engineering business on its advantages of effectively integrating and allocating resources with the continuous development of international engineering business.Material procurement is the core process in EPC project delivery,which is the basis of realizing the design intention and ensuring the continuous construction of the project.However,the project work is less carried out when the international EPC engineering project contract is signed.There are many variables in the process of material procurement,which makes contractors face complex and diverse risks in the process of procurement.Although many domestic scholars have carried out fruitful research on material procurement management of international engineering and EPC projects,they have not paid enough attention to material procurement risk management of EPC projects,and the research results have certain limitations.Therefore,how to analyze and evaluate the risk of material procurement systematically in international EPC project in order to realize the optimal management of material procurement in the whole process of the project has become an urgent subject to be studied.This paper studies from the perspective of Chinese contractors based on the requirement of the practical problem and the shortcoming of the theoretical research.In this paper,literature research,questionnaire survey,mathematical modeling based on Bayesian network and other methods are used to carry out the research.The risk evaluation index system,risk status evaluation criteria and risk evaluation model of international EPC project material procurement are constructed,and the risk evaluation criteria and control strategies of international EPC project material procurement are put forward.The specific research contents of this paper are as follows:The risk of material procurement is decomposed step by step,and 24 main risk factors are identified based on the existing research results and cases of material procurement risk.Risk factors are screened according to expert experience and knowledge.Finally,an evaluation index system of material procurement risk is established,which includes 2 first-level indicators,11 second-level indicators and 23 third-level indicators.The risk level of material procurement is divided into probability level and risk loss level based on the analysis of relevant literature.The risk state evaluation matrix of material procurement is constructed,and the risk state is divided into three states: H,M and L considering the occurrence probability level and risk loss level.The sample data required for modeling is obtained through questionnaire survey.A material procurement risk assessment model based on mathematical model-Bayesian Network is built with the help of GeNIe 2.0 software.12 key risk factors of material procurement are identified by backward reasoning and sensitivity analysis using risk assessment model.The risk assessment and control criteria for material procurement are proposed based on the established risk assessment model.Relevant control strategies are proposed according to the identified 12 key risk factors.