EPC project owner and contractor design decision analysis based on game theory
ZHAO Yue1, QIANG Maoshan1, WANG Hao2
1. Institution of Project Management and Construction Technology, Department of Hydraulic Engineering, Tsinghua University, Beijing 100084, China; 2. Department of Hydraulic Engineering, Tsinghua University, Beijing 100084, China
Abstract：The engineering-procurement-construction (EPC) method is frequently used in construction projects because this method integrates all aspects of design and construction into one process. This method differs from the design-bid-build(DBB)method in which the design and construction steps are sequential. An important factor for smooth and effective implementation of an EPC project is how involved is the owner early in the design process. This study used game theory to analyze the effects of the owner's level of involvement and the contractor's design optimization decisions in an EPC project with a numerical analysis of the more applicable two-sided optimization strategy for engineering practice. The results show that increasing the profit and cost ratio in the optimization process reduces the importance of the owner's level of involvement in the design process. For profit and cost ratios less than 1.2, the owner being heavily involved in the design has an optimal compatibility with a specific proportion of the risk assumed by the owner while for ratios greater than 1.2, the importance of the owner's level of involvement in the design process increases with increasing proportion of the risk assumed by the owner. Overall, the owner having limited involvement in the design with an design optimization by the contractor is the most advantageous strategy. Practical suggestions are given to help the industry better understand and more effectively use EPC.
赵越, 强茂山, 王淏. EPC项目业主与承包商设计决策博弈[J]. 清华大学学报（自然科学版）, 2021, 61(10): 1195-1201.
ZHAO Yue, QIANG Maoshan, WANG Hao. EPC project owner and contractor design decision analysis based on game theory. Journal of Tsinghua University(Science and Technology), 2021, 61(10): 1195-1201.
[1] WANG T F, TANG W Z, QI D S, et al. Enhancing design management by partnering in delivery of international EPC projects:Evidence from Chinese construction companies[J]. Journal of Construction Engineering and Management, 2016, 142(4):4015099. [2] 林正航, 强茂山, 袁尚南. 大型国际工程承包商核心能力模型评价[J]. 清华大学学报(自然科学版), 2015, 55(12):1309-1314, 1323.LIN Z H, QIANG M S, YUAN S N. Core competency model for mega Chinese international contractors[J]. Journal of Tsinghua University (Science and Technology), 2015, 55(12):1309-1314, 1323. (in Chinese) [3] DU J, EL-GAFY M. Using agent-based modeling to investigate goal incongruence issues in proposal development:Case study of an EPC project[J]. Journal of Management in Engineering, 2014, 31(6):05014025. [4] EYBPOOSH M, DIKMEN I, TALAT BIRGONUL M. Identification of risk paths in international construction projects using structural equation modeling[J]. Journal of Construction Engineering and Management, 2011, 137(12):1164-1175. [5] GALLOWAY P. Design-build/EPC contractor's heightened risk:Changes in a changing world[J]. Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, 2008, 1(1):7-15. [6] GU X, GENG Z, XU W, et al. Hierarchy probability cost analysis model incorporate MAIMS principle for EPC project cost estimation[J]. Expert Systems with Applications, 2011, 38(7):8087-8098. [7] KOKKAEW N, CHIARA N. Modelling completion risk using stochastic critical path-envelope method:A BOT highway project application[J]. Construction Management and Economics, 2010, 28(12):1239-1254. [8] YANG L R. Exploring the links between technology usage and project outcomes[J]. Construction Management and Economics, 2007, 25(10):1041-1051. [9] YEO K T, NING J H. Integrating supply chain and critical chain concepts in engineer-procure-construct (EPC) projects[J]. International Journal of Project Management, 2002, 20(4):253-262. [10] 唐文哲, 王腾飞, 孙洪昕, 等. 国际EPC水电项目设计激励机理[J]. 清华大学学报(自然科学版), 2016, 56(4):354-359.TANG W Z, WANG T F, SUN H X, et al. Game analysis of design incentive for delivering international hydropower EPC projects[J]. Journal of Tsinghua University (Science and Technology), 2016, 56(4):354-359. (in Chinese) [11] 宋海滨, 郝生跃, 任旭. 基于演化博弈论的EPC总承包项目内知识转移主体研究[J].科技管理研究, 2016, 36(17):177-184, 215.SONG H B, HAO S Y, REN X. Research on knowledge transfer agent in EPC general contract project based on evolutionary game theory[J]. Science and Technology Management Research, 2016, 36(17):177-184, 215. (in Chinese) [12] ZHANG X, FANG J. Design of EPC bidding mechanism based on game theory[C]//International Conference on Construction and Real Estate Management. Guangzhou, 2017. [13] ZTA A, KMEN N. Risk analysis in fixed-price design-build construction projects[J]. Building and Environment, 2004, 39(2):229-237. [14] 王卉. EPC总承包项目的设计要素研究[D]. 天津:天津大学, 2006.WANG H. Study of engineering factor in EPC projects[D]. Tianjin:Tianjin University, 2006. (in Chinese) [15] FIDIC. Conditions of contract for EPC/turnkey projects[M]. 2nd ed. Geneva:FIDIC, 2017. [16] ZHANG S B, LIU X Y, GAO Y, et al. Effect of level of owner-provided design on contractor's design quality in DB/EPC projects[J]. Journal of Construction Engineering and Management, 2019, 145(1):4018121. [17] HERAVI A, COFFEY V, TRIGUNARSYAH B. Evaluating the level of stakeholder involvement during the project planning processes of building projects[J]. International Journal of Project Management, 2015, 33(5):985-997. [18] GIBBONS R. An introduction to applicable game theory[J]. The Journal of Economic Perspectives, 1997, 11(1):127-149. [19] 范云龙. EPC工程总承包项目管理手册及实践[M]. 北京:清华大学出版社, 2016.FAN Y L. EPC general contracting project management manual and practice[M]. Beijing:Tsinghua University Press, 2016. (in Chinese) [20] LEE C Y, CHONG H Y, LI Q, et al. Joint contract-function effects on BIM-enabled EPC project performance[J]. Journal of Construction Engineering and Management, 2020, 146(3):4020008. [21] 王洁, 章恒全. 项目联合体EPC模式下基于考虑风险的Shapley值的收益分配模型[J]. 土木工程与管理学报, 2016, 33(2):110-117.WANG J, ZHANG H Q. Revenue distribution model based on the Shapley value considering the risk under the EPC model[J]. Journal of Civil Engineering and Management, 2016, 33(2):110-117. (in Chinese) [22] FIDIC. Conditions of contract for construction[M]. 2nd ed. Geneva:FIDIC, 2017.
2021, Vol. 61 
