Study On Risk Management Of Hunan Industrial Equipment Installation Co. Ltd Bidding Phase

As the engineering construction market is confronted with fiercer competitions, engineering projects are carrying more uncertainties and greater risks. Since the bidding period is the primary stage for construction companies, risks of the bidding stage will determine the fate of the project, even of the entire company. However, awareness of and competence in risk management of engineering projects are still backward in China, which is at a preliminary stage, to be exact. The situation in China too often fails to meet the crying needs of the construction companies that risk management competencies must be developed. Under such circumstances, this paper is devoted to helping the companies to identify, analyze, and evaluate the risks at the bidding stage more properly, and to find ways to reduce risks and enhance competencies for risk management.In this paper, a case study of Hunan Industrial Equipment Installation Co., Ltd.(hereinafter referred to as "Hunan Installation") is presented in which the risk management issue at the bidding stage is discussed. First, the paper probes into and analyses Hunan Installation’s state of operation and risk management at bidding stage, as well as the internal and external problems in the bidding process. The paper identifies the external environmental risks, stakeholder risks, documentation risks, and risks in the bidding process. Second, it formulates principles underlying the Risk Management Index System and establishes the FAHP-based Bidding Risk Assessment Model. This study applies the Risk Management System to Hunan Installation, and employs the risk management method of "risk mitigation, risk avoidance, risk transfer, risk exploitation", so as to manage the risks of the bidding stage more effectively. Finally, the paper proposes an optimized solution to Hunan Installation’s risk management at bidding stage.The paper selects Project A as an exemplification. Having been empirically tested for validity and reliability, the risk management methods proposed in this paper do improve Hunan Installation’s risk management competency.