【Haichuan EPC】Procurement Management during the Project Implementation Phase

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Project Procurement Management (1) Management Contents ① Formulate the \"EPC Project Procurement Management Regulations\", the \"Regulations on the Addition of Qualified Suppliers to the List\", and the \"Work Procedures for Equipment/Project Procurement\". ① The design manager coordinates with various specialized designers to prepare a comprehensive list of equipment and materials to be purchased； ②In accordance with the overall schedule, the project defines the key time points for issuing inquiry documents, conducting technical discussions, holding tenders, selecting the supplier, signing contracts, and delivering the goods to the site for each item on the list ； ③Purchase requisition for accepting design submissions and project approvals (specifying delivery time and place, equipment and material specifications, data sheets, unit/quantity, applicable standards and specifications, cost control targets or limits) ； Based on the aforementioned work procedures, the Procurement Department needs to further organize or carry out the following tasks: ① Determine whether centralized procurement is necessary ； ②Market research to select suppliers ； ③Supplier qualification review ； ④Bidding, bid opening, and award of contract ； ⑤Business negotiation ； ⑥Sign the contract ； ⑦Contract execution tracking ； ⑧Inspection of goods upon arrival ； ⑨Put into storage ； ⑩Outbound ； ⑪Payment ； ⑫Final inventory count to determine remaining equipment/materials ； ⑬Prepare a summary of the overall project procurement. (6) Common procurement items for chemical engineering projects ① Equipment (towers, reactors, vessels (Class I, Class II, Class III), heat exchangers, air coolers, storage tanks, pumps, fans, compressors, lifting equipment, complete sets of equipment, etc.) ； ②HVAC equipment ； ③Piping materials (flanges, valves, bolts, fittings, gaskets, pipes) ； ④Electrical/equipment materials (cables, wires, grounding electrodes, communication alloy pipes, electrical trunking, electrical materials, explosion-proof electrical materials) ； ⑤Electrical/equipment categories (transformers, cabinets, security monitoring and communication equipment and accessories, control switches and lighting distribution boxes, electric heating elements, lighting fixtures, etc.) ； ⑥Instrumentation items (instrumentation equipment, cabinets, instrument trays, instrument pipes and valves, instrument tubing, cables and wires, etc.) ； ⑦Fire protection products (fireproof putty, fireproof spraying materials, cables, fire protection equipment and accessories, fire trucks, diesel generators, etc.) ； ⑧Structural elements (steel structures, steel plates, steel grilles, steps) ； Non-installation items (materials and three types of reagents to be prepared before driving, as well as equipment for office use, daily life, and sports) (7) Tax management: ① Tariff reductions for imported equipment: A list of equipment eligible for tariff reduction is established in accordance with **relevant regulations; contracts are signed based on these reduction requirements. The list of eligible equipment is drawn from the “Catalogue of Major Technical Equipment and Products Supporting Development (2025 Edition”). ②Value-added tax deductions: The scope of equipment eligible for value-added tax deductions is determined in accordance with the Interim Regulations on Value-Added Tax of the People’s Republic of China and its implementing rules. For chemical industry projects, such equipment is generally classified as equipment used in production and operations. Under relevant regulations, input tax credits can be claimed for machines, mechanical devices, transportation tools, and other equipment, tools, and instruments related to production and operations that have a useful life of more than one year, whether purchased by value-added tax payers (including those acquired through donations or in-kind investments), manufactured internally (including through modifications, expansions, or installations). (8) Job responsibilities: ① Design: Determine material specifications, prepare material purchase orders, plan for material quantities and batch control, and recommend the use of safety factors. ② Procurement: Determine procurement and delivery deadlines, carry out purchases, conduct intermediate inspections, urge timely delivery, handle transportation, and perform acceptance checks. ③ Construction: The main responsibilities are to inspect materials upon receipt and to control their dispatch. For acceptance and storage in category A, it is necessary to first establish comparison data for materials/equipment (comparisons are made in three aspects: the purchase request list, the contract list corresponding to the purchase request, and the delivery list from the supplier’s contract); in principle, this data should be updated each time something arrives ； Arrange the equipment, personnel, and site resources based on the delivery schedule, contents, and real-time transportation information ； B Initial inspection: archive the license plate before unloading, and verify that documents such as the packing list, material list, quality documents, shipping order, or invoice are complete ； Group C is responsible for unloading, unpacking, counting, inspecting, and drawing conclusions ； The inventory verification and acceptance process shall be completed within 3–5 days. In the case of any shortages or damages, a report shall be prepared, procurement shall be informed, and the manufacturer shall be notified promptly ； Once the D verification results are consistent, fill out the material inspection notice to inform the relevant parties of the joint inspection, and issue as well as return the purchase arrival and inspection forms ； For equipment and materials delivered directly to the site, the handover and dispatch procedures are carried out directly based on the inspection report ； F After each batch of programs is executed, classify and create documents for that batch of deliveries, while keeping electronic records ； (9) Common tables: The list of common tables is not exhaustive; adjustments may be made to add or remove tables depending on the scale of the project and the requirements of the relevant company’s system. ①Level 1, Level 2, Level 3 plans ； ②List of procurement methods, procurement request form ； ③Comprehensive Bid Evaluation Weighted Scoring Table ； ④Manufacturing supervision plan ； ⑤Flight inspection plan ； ⑥Unboxing and Inspection Record ； ⑦Arrival Inspection Notice ； ⑧Inbound/Outbound tables ； ⑨Inbound/Outbound and Inventory Status Verification Form ； ⑩List of spare parts (separately listed for spare parts included with the product and those intended for use over a period of two years) ； ⑪Random Data List Table ； ⑫On-site sporadic procurement request approval form ； ⑬Payment application form. (10) Methods and contents of contract-based supervision: ① The manufacturer is required to submit documents such as the manufacturing plan, inspection plan, and manufacturing inspection procedures (to be provided within 15 days of contract signing) ； ②The manufacturer prepares the supervision and inspection plan ； ③The supervision staff break down the supervision and inspection plan in detail, down to monthly plans ； ④Determine the timing and location for supervision in accordance with the production plan⑤ The client sends personnel to the factory to carry out supervision ； ⑥Organize the supervision and inspection reports; notify the manufacturer of any issues so that they can be resolved and the process closed out ； ⑦Such as static equipment manufacturing supervision: inspection of the manufacturer’s quality assurance system ； ⑧Proof of primary and secondary materials ； ⑨Material identification ； ⑩Regulation of compressed originals ； ⑪Re-inspection and supplementary material testing and reports ； ⑫Bonding forms of composite materials and non-destructive testing after bonding ； ⑬Check the external dimensions of the equipment, the orientation of the pipe openings, and the installation dimensions of the internal components ； ⑭For equipment that requires overall heat treatment, it is necessary to check the installation of attachments, as well as the specifications and quantities of components or shims; no further welding is allowed after the overall heat treatment is completed ； ⑮Insulation resistance testing, leakage testing, tightness testing for key and special equipment, as well as hardness testing of the surface in contact with the medium after heat treatment ； ⑯After the hydrostatic test, check whether the water has been completely drained and whether there are any impurities ； Pressure test of the tube side and shell side of the heat exchanger equipment ； ⑰Inspection of the heating furnace includes checking the material of the convection tubes, verifying the quality of the refractory materials, examining the material of the burner nozzles, as well as conducting simulations and test adjustments of the burners before they leave the factory. (11) Completion of procurement and settlement: ① The supplier shall submit invoices and supporting documents (factory acceptance certificate, arrival inspection report, delivery note, inventory receipt report) in accordance with the payment terms specified in the contract ； ②Payment/guarantee management by the procurement department, review of invoices and payment requests, internal approval within the procurement department ； ③Payment/guarantee management by the procurement department: fill out the contract payment application form, along with supporting documents such as the contract settlement statement ； ④Modified according to the financial opinion ； ⑤The chief accountant, finance director, project manager, and general manager approve the payment requests ； ⑥The finance department handles the payment procedures ； ⑦Purchasing regularly checks finances with the finance department and suppliers ； Note: When making the final payment, make sure that the supplier has submitted all the required documents in accordance with the terms of the purchase contract. Material settlement ① After the project is completed and handed over, inventory of the remaining spare materials at each subcontractor’s site and at the installation site is taken, and these materials are returned to the warehouse ； ②The procurement department conducts a differential analysis and summary of the total number of purchase requests, total quantity requested, quantity contracted, quantity received, quantity stored in inventory, quantity issued, inventory level, and quantity returned for the project, thereby producing a comprehensive material settlement report. This report should identify the causes of any discrepancies and outline measures to handle the remaining materials.