EPC

Pre - Qualification

E-P-C
Pre - Qualification

Economically most preferable bid

Lowest Bid

Direct Negotiation

Bidding Competition

Functionality based

Quantity based

Design & Build

Multiple Contracts

Fixed Sum

Cost Reimbursable

Incentives

Incentives

Untraditional Contract Regulations

Traditional Contract Regulations

EPC

Time, cost, quality and scope Diversification Organization Break-down Structure Uncertainty, Risk Work Breakdown Structure

E-P-C

Owners need for flexibility

Need for contractor involvement

Complicated due to specialist work Complexity, involves many branches Sustainability Market Project organization preferences Criticality

Juridical laws Standards and routines Frequency of Projects Contract Strategy Spectrum

 State of the economy:- One of the driving factors for contractors without work they will go broke comes down to market position. With the slow down in activity contractors may well be prepared to or forced to consider bidding where there is higher exposure to risk or price. Almost always these Contracts end up in dispute because the contractor needs to use a claims process to make up for the low cost. Risk:- The contractor has to apply sensible price to take on that risk. Problems arise when pricing involved in allocating that risk does not match up to what it actually costs. Risk aversion can be detrimental to contractors because they lose their skills set in a no-risk environment. Risk increases the efficiency and performance of a contractor it hones their skills.