Research on Engineering Cost Risk Management in EPC Mode (How to Implement Engineering Cost Risk Management in EPC Mode)

The EPC (Engineering, Procurement, Construction) model is an engineering contracting model that assigns the design, procurement, construction, and other work of a project to a single contractor, responsible for the design, procurement, construction, and management of the entire project, in order to minimize the customer's engineering investment and project cycle, and improve engineering efficiency and quality. However, the EPC model also carries certain risks, especially in terms of project cost. Therefore, in order to effectively control the engineering cost risks under the EPC mode, necessary research is needed.

1. Analysis of Engineering Cost Risk Sources under EPC Mode

The engineering cost risk under the EPC mode mainly comes from the following aspects: firstly, the engineering cost risk under the EPC mode comes from improper control of the engineering budget. This is because in the EPC mode, the budget control ability of the engineering contractor is weak, which easily leads to cost overruns and seriously affects the effectiveness of engineering budget control. Secondly, the engineering cost risk under the EPC mode comes from lax engineering management. Due to the relatively loose engineering management standards under the EPC mode, loopholes are prone to occur in engineering management, resulting in unreasonable engineering costs and affecting engineering cost efficiency. In addition, the engineering cost risk under the EPC mode may also come from environmental factors. Due to the complex engineering environment under the EPC mode and the difficulty in controlling project progress, it often leads to unnecessary expenses in project cost.

2. Research on Engineering Cost Risk Management Scheme under EPC Mode

In response to the engineering cost risks under the EPC mode, relevant institutions should take appropriate measures and develop effective risk management plans. Firstly, it is necessary to establish a reasonable engineering budget control system, improve the budget control level of engineering contractors, and effectively control engineering costs; Secondly, it is necessary to strengthen engineering management, establish a sound management standard system, and establish effective management mechanisms to ensure reasonable project costs; In addition, it is necessary to establish a comprehensive environmental monitoring system and take effective measures to control the progress of the project, in order to avoid unnecessary expenditures on project costs.

3. Research on Engineering Cost Risk Management Technology under EPC Mode

In the EPC mode, applying reasonable engineering cost risk management techniques can help to more effectively control engineering cost risks and improve engineering efficiency. Firstly, risk-based budget control techniques can be adopted to dynamically adjust the project budget based on changes in risk sources, in order to effectively control the project cost; Secondly, improved management techniques can be adopted, utilizing modern management concepts and implementing unified management standards and mechanisms to effectively control project costs; In addition, intelligent environmental control technology can be adopted to establish a comprehensive environmental monitoring system, take effective measures to control project progress, and reduce project cost expenditures.

Case study on engineering cost risk management under EPC mode

The case study of engineering cost risk management under EPC mode can also provide valuable experience for researchers. For example, in the EPC mode construction of a water conservancy project in Anhui Province, in order to effectively manage project cost risks, the construction party adopted measures such as establishing a unified budget control system, implementing unified management standards, and improving environmental monitoring systems, effectively controlling project cost risks, saving project investment, and accelerating project progress.