Studies Of The Applications Of Life Cycle Cost On Bidding Management In State Grid Corporation Of China

State Grid Corporation of China carries the responsibilities to provide safe and reliable electricity to the society. In the current market environment of rapid development of electrical grids and never-ending changes and improvements of electrical grid equipment, the quality of transmission and transformation equipment has become an important factor that may restrain the development and affect reliability of electric grids. Therefore, how to procure optimal cost-effectiveness products and maintain high quality equipment is one of the most important tasks at the beginning of engineering and construction project management.Since2005, the headquarter of State Grid Corporation of China has started large-scale bidding for major equipment and materials of all the new transmission and transformation projects of220kV and above. The procurement price of equipment reduces due to strong competitions between a large number of bidders, but the malfunction rate of equipment increases. To select a proper method and strategy for bidding and procurement has become a focal point of the project implementation process, and also an important part of the project quality management and risk management control.By analyzing the current status and characteristics of bidding management in State Grid Corporation of China, this thesis proposes the Life Cycle Cost (LCC) method for bidding and procurement, improving the traditional method that separates the operation phase from the construction phase by taking into consideration both the one-time procurement cost and the maintenance cost in the procurement phase. The detailed processes of LCC bidding are elaborated in the thesis, by establishing the LCC bidding model, determining the equipment suitable for LCC bidding, developing LCC bidding flow charts, and proposing the verification method in the operation phase. The successful application of LCC bidding on220kV transformer in Taihe. Jiangxi. has been a good example to popularize the LCC method to the bidding management in State Grid Corporatior of China.