Research On Dynamic Performance Incentive Mechanism Of EPC Project From The Perspective Of The Owner

The EPC general contracting mode has shortened the construction period and saved investment through the implementation of the in-depth crossover between the design,procurement and construction phases,which has been vigorously promoted in China in recent years.In EPC mode,the general contractor needs to bear higher risks than the traditional mode,and there are information asymmetry and inconsistent goals between the owner and the general contractor.In order to improve self-interests,the general contractor is likely to take advantage of information asymmetry to take opportunistic behaviors,thereby damage project output.The incentive mechanism can improve the interdependence between the contracting parties from an economic and psychological perspective through the adjustment of benefits,so that the principal and the agent’s goals tend to be consistent,reducing the harm caused by information asymmetry,as well as the opportunistic behavior of the general contractor.On the other hand,as the project progresses,the owner will obtain more information about the general contractor and the project environment.Using this information to further adjust the incentive mechanism will help improve the incentive mode of the project,thereby reducing the general contractor’s opportunistic behavior and improve project output.Therefore,how to build a scientific and effective dynamic performance incentive mechanism based on the owner’s perspective to maximize project output is not only a theoretical issue that has been discussed in the academic community,but also an important content that needs to be resolved in the practice of EPC general contracting projects.Based on the perspective of the owner,this paper constructs a dynamic performance incentive mechanism for the general contractor of the EPC project through mathematical modeling to achieve the optimization of the owner’s strategy and the continuous improvement of project output.First,combining the deficiencies of existing research and centering on the characteristics of EPC projects,using principal-agent theory to construct a static performance incentive model for EPC projects.Then,based on the static performance incentive model,a time-based incentive adjustment strategy is proposed.According to the performance information obtained from the evaluation of the general contractor,the owner uses Bayesian statistical methods to re-infer the type of general contractor and then improve the owner’s strategy.Finally,numerical analysis is carried out through calculation examples to prove the effectiveness of the static performance incentive mechanism and dynamic performance incentive mechanism,while analyzing the influence of the initial distribution of general contractor type parameters on the dynamic adjustment effect.This study provides a certain reference for the owner to successfully suppress the opportunistic behavior of the general contractor under the EPC mode.The research results of this paper aim to improve the incentive model of the owner in EPC projects,help the owners determine the incentive parameters reasonably,and use the performance information generated in the project process to dynamically estimate the type of general contractor,and continuously improve the value of the reward and punishment factor to realize the project continuous improvement of output.