【Haichuan EPC】How to break the dilemma of design that ignores costs? ? ?

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Design, in EPC projects, serves as the cornerstone that firmly guides the overall direction of the project. As a critical technical task, its impact on project costs is akin to a domino effect – one change triggers a chain reaction with direct and significant consequences. However, in the actual progress of EPC projects, a series of tricky issues related to design costs kept emerging one after another, posing significant obstacles to the smooth advancement of the projects. For example, there are discrepancies between a project’s estimated cost list and the preliminary design, as well as missing items. During the design of construction drawings, the preliminary design is continued to be used or additional elements are added based on it, resulting in significant cost overruns. There are many unexpected aspects to EPC project operations. For example, in some projects, when the construction drawing design firm purchases basic data from the preliminary design firm, it is difficult to ensure the authenticity, completeness, and accuracy of such data. If the construction drawing design and the preliminary design are carried out by the same party, and the construction party is allowed to proceed with construction based on the drawings without reviewing the preliminary design estimate, the project is very likely to deviate from its objectives. In traditional list-based bidding projects, designers often overlook costs. The construction drawing budget is generally prepared by specialized cost professionals or third-party consulting firms; designers only need to ensure that their design work passes the review process. In landscape engineering design, people often focus on whether the design will be approved by the client, ignoring costs; this issue is even more pronounced in specialized EPC projects, which require higher overall capabilities from the personnel involved. Faced with these problems, it is not easy to find appropriate solutions. Increasing costs to hire more staff is one approach, but it is extremely difficult to change people’s minds and decisions. Some approaches to addressing problems: 1. The contractor reviews the quantity of work: The contractor needs to thoroughly understand the preliminary design documents and carefully review the quantity of work involved. 2. Compare budget costs with estimated costs: Prepare a budget based on the construction drawings, and compare it with the costs outlined in the estimate documents to ensure that the actual expenses do not exceed the estimated amount. 3. Strengthen communication with the design unit: Conduct further discussions with the design unit after fully understanding the basic information. 4. Prepare a compelling proposal: Prepare a thorough proposal and complete cost calculations before submitting it, to ensure that the suggestions are convincing. 5. Establish a cost feedback mechanism: During the project implementation process, a real-time cost feedback mechanism should be put in place to collect cost data on a regular basis. This data should be compared with the design progress and construction progress; whenever cost deviations are detected, the design or construction plans should be adjusted promptly to keep costs within acceptable limits. The issue of design costs in EPC projects is like a complex chess game, full of challenges and opportunities. Only by conducting an in-depth analysis of the causes of the problems, applying a variety of solutions, and continuously improving the overall capabilities of personnel, can one effectively manage this situation, overcome difficulties, ensure the smooth progress of EPC projects, and achieve both economic and social benefits