Research On The Risk Evaluation Of Bidding Decision For The AP EPC Project

With the increasing competitiveness in the international infrastructure market,Chinese construction companies have gained more and more opportunities of participating in international EPC projects.The EPC project adopts a form of total-price-contracting and owns a larger profit margin.On the other hand,the general contractor undertakes most part of the risks in the project,as a result,it is more likely to suffer the large amount loss in the absence of effective risk management and control mechanism.Due to different cultures,trade rules and the international competition,the risk factors of international EPC projects are more complicated.In recent years,the examples of huge amounts of compensation paid by Chinese companies as suffering from failures in international EPC projects are not uncommon.To this end,this paper sets focus on the bidding decision problems of international port engineering EPC projects.It is expected that this study can strengthen the risk assessment ability,improve the scientificity of bidding decisions,and reduce the property losses of enterprises.In this paper,a factor hierarchy for risk evaluation in bidding decision with six first-class factors and thirty-eight second-class factors is constructed by considering the characteristics of port engineering and EPC projects,using the methods of specialist investigation and project case validation based on extensive references of public literatures.Based on this hierarchy,a quantitative risk evaluation model of bidding decision is built up by applying methods like fuzzy comprehensive evaluation,variable-weight etc.At the same time,a practical port project case which the author participated in,namely the AP EPC project,is utilized to verify the rationality and effectiveness of the proposed model.The results show that the application of variable-weight method can build a more reasonable risk evaluation model,avoiding the rigidity and limitation of the constant-weight model.Finally,risk control strategies are given and discussed according to risk states provided by the evaluation model.In summary,the quantitative risk evaluation model in this paper avoids the randomness and blindness in bidding decisions,enhances the pertinence of risk management and control,and provides valuable reference to the real-world bidding decision-making.