Contract Design and Game Analysis of Schedule and Quality Control of EPC Project

D. Liu, S. Cai, P. Huang, and H. Song (PRC)


Hydropower engineering, EPC, decision making, schedule incentive, quality control, game theory


Engineering-procedure-construction general contract has been already applied widely in many fields, including hydropower engineering. More studies inclined to schedule incentive but not integrated quality control contract design. Because of no supervision engineer to be responsible directly for the owner, it is of great difficulty for owner to control both schedule and quality effectively. How to ensure engineering quality and completion on schedule considering the contractor’s benefits maximization? It is an extremely important problem to be solved when the owner designs contract. Therefore, in this paper, Contract Design of EPC project in hydropower engineering integrated schedule incentive and quality inspection, which can encourage contractor to speed up schedule as well as improve quality. Based on this contract, game models of schedule incentive and quality control between owner and contractor are respectively developed with owner’s completely receiving quality information and owner’s inspecting under certain level. Furthermore, optimal strategies are worked out and optimal contract is achieved, which result in Win-win relationship between owner and contractor.

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