Bid Price Factor for an EPC Project

by Larry R

The winning bid/proposal is often the Bidder who submits with the lowest price.
Therefore to be competitive in Plant Business field, Bidder has to prepare a low
and sound price.

Price is composed mainly of direct and indirect cost. Indirect is a secondary

portion of the total cost and is driven by direct cost. While direct cost is the
main portion of the total cost, this is influenced first by procurement and then
construction cost.

Procurement cost is a result of BQ or BM done by engineering & design efforts. A

well optimized design plant can bring BQ or BM and cost down.

As a concept, an (oil & gas) plant has series of process equipment which drives the
related bulk items. This is I believe where Lang Factor was formulated.

Project Proposal team shall bear in mind that EPC bidding is not only about price
competition but also its a design competition, since the design & engineering
effort drives the direct cost then overall bid price.