【Haichuan EPC】EPC project management in the preliminary and initiation phases (

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Based on GB/T50358-2017 \"Code for Management of General Contracting of Construction Projects\" and practical experience in project execution, the EPC project can be generally divided into the following stages from a procedural perspective: 1. Pre-project stage； 2. Project initiation phase ； 3. Project implementation phase ； 4. Project closure phase ； The above four phases, based on the logical sequence in time and space of the project’s critical path, constitute the overall process management of an EPC project. Among them, the three controls, three management aspects, and one coordination function (progress control, cost control, quality control, contract management, HSE management, information management, and overall coordination) are interrelated and run through the entire process of an EPC project, from the initial stages to its completion. I. The preliminary work for a project includes: marketing, project bidding, and contract signing ； 1. Marketing: Focusing on customers and their needs, it involves collecting information on overall construction projects, analyzing and filtering that information, and integrating internal and external resources to keep track of the selected projects. During this process, key aspects such as the background of the project owner and the main stakeholders, the scale of the project, commercial terms, risk factors, construction timeline, market demand, favorable conditions, and unfavorable factors are analyzed. 2. Project bidding: After selecting potential bidding projects, prepare for the bidding process. The main tasks include: registering for bids, purchasing tender or bid documents, pre-bid evaluation (identifying requirements, ensuring compliance, assessing risks, and optimizing proposals), preparing project bid documents, submitting these documents, paying the bid deposit, and receiving the notice of award for the project. 3. Contract signing: After receiving the notice of award, draft the contract, conduct contract negotiations, review the contract, sign it, and provide the performance bond. II. Project initiation phase The key indicator of the project initiation phase is that the owner issues a formal letter of award to the EPC contractor; any documents issued prior to this do not carry any contractual binding force for initiating the project. Includes: organization establishment, project handover, preparation and submission of key preliminary documents, project kickoff meeting, preparation of project procedure documents, project quality classification, and project planning. 1. Organization establishment: The organization is structured based on the principle of selecting only the most capable individuals, thereby minimizing the number of staff members. This helps to reduce internal communication barriers and improve efficiency. The main considerations include the personnel’s experience (whether they have worked on similar projects and how successful those projects were), their strong willingness to participate, their ability to work as part of a team, and whether the current number of projects allows them to dedicate sufficient time to their work. Based on these factors, an organizational chart is created, along with definitions of the functions of the project department and the responsibilities of each position. Appointment of project manager: A person with the necessary qualifications and experience, as approved by the client, who shall be granted a written power of attorney by the legal representative of the enterprise ； Establishing a project department and appointing a project team: The core members include the project manager, the technical leader of the project, the procurement manager, the design manager, the construction manager, and the cost control manager; other members are organized and nominated by the respective managers, and the composition can be adjusted based on the company’s cost management practices, the availability of talent, as well as the specific requirements of the project. After the organizational structure and personnel information are determined, the company’s human resources department stamps and publicly announces the appointment procedures. 2. Project handover: After winning the bid, the marketing team presents project details to the project manager in a meeting, with the aim of helping them understand the risks and benefits outlined in the contract, so that appropriate strategies can be developed for future actions. Its information includes, but is not limited to: the contract and the owner’s main requirements ； Project control budget (cost control, estimated gross margin indicators, gross margin warning indicators) ； List of Owner’s Communication Methods ； Project background and scope description ； Strategies for project bidding (whether to carry out targeted secondary business planning in order to develop business strategies) ； List of suppliers and subcontractors proposed by the owner ； Project bid sections, scope, and list of contents ； Project overall plan/strategy ； Key stakeholders. 3. Preparation and submission of key documents in the early stage of the project: including, but not limited to, the project performance bond required by the contract (financial arrangements) ； Advance payment guarantee ； Insurance required by the contract (business financial arrangements) ； Project organizational structure diagram, 60-day outlook plan (the 60-day plan can be generated through the management system after the overall project plan is established, with subsequent detailed breakdown of each element of this 60-day plan) ； Project Level-4 Schedule Plan (milestone plan, individual project plan, sub-project plan, detailed task plan) (to be submitted to the owner for approval within 2–4 weeks after award of contract) ； Project procedure documents (design, procurement, construction, QHSE); the quality department prepares work lists and codes based on the project’s characteristics, with each department responsible for drafting its own documents). 4. Project kick-off meeting: At this stage, the project kick-off meeting is generally divided into two parts, namely the EPC party’s kick-off meeting and the owner’s kick-off meeting. Before the owner holds the project kickoff meeting, an internal project kickoff meeting is held by the EPC party; the main items on the agenda include: the company’s senior management officially appointing the project manager/project deputy manager ； A project manager announced the other members of the project management team ； The project manager explains the scope of work and the technical aspects that require attention ； The contract/fee control section outlines the main components of the project’s cost structure as well as potential issues that need to be taken into account during the project’s execution (such as changes to the scope of work, claims, etc.) ； Contract briefing (key points and special aspects of the contract) ； Determine the key priorities and arrangements for the next steps (task allocation, work standards, process, and timeline) ； List of temporary facilities for the project, etc ； Summary table for management expense planning. The owner holds a kick-off meeting, usually within a week of the award of the contract, to discuss major and fundamental issues such as the project’s technical approach. Main content: Introduction of participants from both sides ； Introduction to the management processes of both parties (especially the procurement methods and procedures for items that require purchase by the owner) ； Clarification of major business and technical issues ； Other related special requirements. 5. Prepare project procedure documents: The quality department takes the lead in establishing the overall task list and coding, with each department responsible for completing its respective tasks ； Procedure Work Inspection and Confirmation Form ； Matters related to license acquisition (such as local project license applications, permit applications, tax registration, etc.). 6. Project quality classification: In accordance with the principle of dividing the project into sections based on the scope of the contract, and since the preliminary design has not yet been completed, reference can be made to the main design elements and measures related to various specialties in each individual component/unit within each section, as outlined in the project feasibility study. In accordance with the rules for classifying units, sub-units, and sub-projects outlined in GB/T50300-2021 \"Unified Standard for Quality Inspection of Building Construction\" and SH/T3508-2021 \"Unified Standard for Quality Inspection of Petrochemical Installation Projects\", a comprehensive classification is carried out using the mind mapping tool Xmind. In principle, the classification should go down to the sub-projects level, but it is preferable to reach the inspection batch level as well, so as to provide options for formulating plans at the team level later on. Inspection batches should be classified in accordance with the requirements of the relevant construction quality inspection standards specific to each specialty; generally, the following standards are used (with specific requirements determined based on the needs of each specialty in a particular project): For pile foundations, GB50202-2018 \"Standard for Quality Inspection of Building Foundation Engineering\" and JGJ106-2014 \"Technical Specification for Testing Building Piles\" are applied ； Foundations and subfoundations shall comply with GB50202 \"Code for Acceptance of Construction Quality of Building Foundations\" ； The superstructure (steel structure) shall comply with GB50205-2020 \"Code for Acceptance of Construction Quality of Steel Structure Engineering\", and (concrete) GB50204-2015 \"Code for Acceptance of Construction Quality of Concrete Structures\" ； Decoration and finishing work shall comply with the standard 50210-2018 \"Quality Acceptance Standards for Building Decoration and Finishing Works\" ； Roofing works shall comply with GB50207-2012 \"Code for Quality Inspection of Roofing Works\" ； Water supply, drainage, and heating shall comply with GB50242-2002 \"Code for Acceptance of Construction Quality of Building Water Supply, Drainage, and Heating Systems\" ； Ventilation and air conditioning engineering shall comply with GB50243-2016 \"Code for Acceptance of Construction Quality of Ventilation and Air Conditioning Engineering\" ； Building electrical engineering is in accordance with GB50303-2015 \"Code for Acceptance of Construction Quality of Building Electrical Engineering\" ； Energy-saving projects for building envelopes are carried out in accordance with GB50411-2019 \"Code for Acceptance of Construction Quality of Building Energy-saving Projects\" ； Intelligent systems shall comply with GB50339-2013 \"Code for Quality Acceptance of Intelligent Building Projects\" ； Elevator systems shall comply with GB50310-2002 \"Code for Acceptance of Construction Quality of Elevator Projects\" ； The roads are selected in accordance with the specific specifications outlined in the overall transportation plan ； Outdoor floor works shall comply with GB50209-2010 \"Code for Acceptance of Construction Quality of Building Floors\" ； Underground pipelines and auxiliary structures (well chambers) follow the regulations for water supply and drainage ； Process media and utility pipelines shall comply with GB50184-2011 \"Code for Acceptance of Construction Quality of Industrial Metal Piping Projects\" and GB50268-2008 \"Code for Construction and Acceptance of Water Supply and Drainage Piping Projects\" ； Dust removal air ducts and process air ducts shall comply with GB50243-2016 \"Code for Acceptance of Construction Quality of Ventilation and Air Conditioning Engineering\" ； For the installation of static equipment, the corresponding construction quality acceptance specifications are selected in accordance with the requirements specified in the pipeline design documents ； Furnace construction (by industry): for the petrochemical industry, SH/T 3534-2012 \"Code for Acceptance of Construction Quality of Petrochemical Furnace Projects\"; for the metallurgical industry, GB 50309-2017 \"Quality Acceptance Standards for Industrial Furnace Masonry Works\" ； Movable equipment shall be used in accordance with SH/T 3538-2017 \"General Specifications for the Construction and Quality Inspection of Petrochemical Machinery and Equipment Installation Projects\", in conjunction with SH/T-3508; compressors shall follow the specifications for their construction and quality inspection ； Electrical installation work shall be carried out in accordance with SH/T3552-2021 \"Code for Construction and Quality Inspection of Petrochemical Electrical Engineering\" and SH/T3507/3543 ； The instrument control installation work is carried out in accordance with SH/T3551-2013 \"Code for Acceptance of Construction Quality of Petrochemical Instrumentation Projects\", GB50093-2013 \"Code for Construction and Quality Acceptance of Automation Instrumentation Projects\", and SH/T3507/3543 as a whole ； Telecommunications engineering is implemented in accordance with SH/T3563-2017 \"Specifications for Construction and Acceptance of Telecommunications Projects in Petrochemical Industries\" and SH/T3507/3543 ； In fire protection installation projects, the fire water system is applied in accordance with GB50974-2014 \"Technical Code for Fire Water Supply and Fire Hydrant Systems\" and SH/T3507/3543. The fire alarm system follows GB50166-2019 \"Construction and Quality Acceptance Standards for Automatic Fire Alarm Systems\". For fire resistance protection, the fireproof layer of steel structures is designed in compliance with GB50205-2020 \"Construction Quality Acceptance Standards for Steel Structure Projects\", while the fireproof layer of equipment is regulated by SH/T3096-2001 \"Quality Inspection and Evaluation Standards for Petrochemical Equipment Installation Projects\" ； 7. Project planning: The planning content consists of the following: ① Project overview (basis, background, installation, process, characteristics of reactors/equipment, layout features, scope of work) ； ② Project Work Breakdown Structure (basic work breakdown structure classification, WBS coding, WBS coding description) ； ③ Project management objectives (schedule objectives, quality objectives, HSE objectives) ； ④ Analysis of project implementation conditions (contract terms, EPC contract, subcontracting agreements, site conditions, management environment) ； ⑤ Project organization structure and human resource requirements (project organization structure, human resource needs, job responsibilities (project manager, construction manager, control manager, design manager, procurement manager), administration, quality, HSE, engineers, schedule control engineer, material control engineer, cost control, financial officer, area manager, etc.) ； ⑥ Project control principles (specific methods for budget preparation and cost control, contract management and control principles, schedule control principles, material control principles, document control principles, and feedback principles) ； ⑦ Subcontracting Planning (Key Focus) ； ⑧ Communication and coordination procedures (communication list, requirements and format for correspondence, meetings (regular), meeting minutes, document control (documents sent to the owner, submission of design documents, submission of procurement documents, submission of construction documents, submission of planning-related documents, requirements for weekly and monthly reports, change management)) ； ⑨ Design implementation plan (design scope and main item numbers based on the specific project, design principles, design requirements, design schedule, and milestones) ； ⑩ Procurement implementation plan (procurement scope, procurement principles, procurement methods and strategies, control strategies, procurement procedures and regulations, principles for determining the list of suppliers, procurement schedule and milestones) ； ⑪ Project construction implementation plan (construction management organization method, construction management plan, construction organization and management, general construction principles, civilized construction management, construction technical plans and measures, construction cost control and contract management, construction layout, construction HSE and quality management) ； ⑫ Project Quality Management Implementation Plan (Quality Management Organization, Quality Management Plans (Design Phase, Procurement Phase, Construction Phase)) ； ⑬ Implementation plan for management (HSE management organization, HSE management plan, general HSE requirements, requirements for the design phase, requirements for the procurement phase, requirements for the construction phase) ⑭ Implementation plan for the project’s “competition, learning, emulation, assistance, and surpassing” approach to management (guiding principles and objectives, activities (competing in work safety, project quality, project progress, cost savings, and integrity building), forms of these activities (identifying gaps, learning from experience, emulating role models, assisting those who are lagging behind, surpassing benchmarks), implementation steps (determining key points for activity planning, execution, and evaluation based on the progression of the project)) ； ⑮ Project IT Management Implementation Plan (project electronic document management, on-site network setup, video conference system) ； ⑯ Planning of temporary project facilities (construction layout, plan for temporary facilities – offices, living areas, storage spaces, gates and access control systems, toilets, fences, and signs promoting civilized behavior) ； ⑰ Plan for the allocation of office and administrative supplies for the project ； ⑱ Project efficiency supervision (general requirements, tasks and specifications, work plan, key areas of supervision – engineering design management, engineering construction projects, bidding processes for material procurement, quality, safety and schedule management, fund management, project completion inspection, management of waste materials, timing for supervision) ； ⑲ Project budget planning (project budget plan, project management fee budget, temporary facilities and HSE costs, budget management procedures) ； ⑳ Project risk analysis and countermeasures (schedule risk, procurement risk, quality risk, HSE risk, cost risk, contract risk, management risk).