ABSTRACT
At the award of the EPC Lump Sum based contract, sometimes the awarded price goes down below the floor price due to competition. Although a 10% reduction in the estimated price can improve the financials of the Project and provide good news to the Owner, the bad news is that the Contractor transfers this loss as much as possible to Vendors by selecting Vendors of less repute, but such a strategy boomerangs eventually. When these Vendors understand that the Contractor is in a state of urgency needing the manufactured equipment from the former due to Project criticality being known to have increased with delaying dispatch, they can adopt arm-twisting strategies to have their cost claims and unapproved change orders settled before the dispatch of the equipment. The Contractor thus faces a bitter consequence.
