—The essential parameters in pricing policy in each
and every project are the detailed scope definition and the
duration of the project. These parameters are officially stated
by the client at the bidding stage.These information are the
basis for pricing in the engineering, procurement and
construction portions with respect to the services requested by
the Client.The engineering estimation is extracted from the
detailed scope of work in terms of required engineering
man-hour, purchasing, cost and construction bill of quantity.
The summation of EPC cost along with the contingency factors,
escalation and organization overhead will end up to project
pricing.The project pricing is a delicate issue and if it is
accurately and precisely carried out, the cash-flow and
organizational productivity will be improved and if something
is disregarded in pricing, the organizational performance will
adversely affected and end up to bankruptcy.At the bidding
stage, the project charter is deeply reviewed by marketing/
estimation department and the detailed project scope in
engineering, procurement and construction is extracted.
—Pricing Policy, EPC projects, Vendor.
Ali Mohammad Kimiagari is with the University of AmirKabir, Institute
of Technology, Tehran IRAN (e-mail: Kimiagar@aut.ac.ir).
Shahram Pejmannia was with the Chemical Engineering Department,
University of Sharif, Tehran IRAN. He is now with the Sazeh Consultant Co.
(e-mail: firstname.lastname@example.org) .
Mohsen Keivanloo, is with the University of AmirKabir, Institute of
Technology, Tehran IRAN (e-mail: email@example.com).
Cite:Fakhrnaz Lotfian, Ali Mohammad Kimiagari, Shahram Pejmannia, and Mohsen Keivanloo, "Pricing Policy in EPC Oil & Gas Projects," International Journal of Trade, Economics and Finance vol.1, no.2, pp. 207-210, 2010.