1. Introduction
Prefabricated building, also known as industrialized or modular building, has a wide range of connotations. On the one hand, it is an innovative method to move part of the work from a construction site to a factory [
1,
2]. The components are mass-produced and assembled on-site to form the final buildings. On the other hand, the assembly-built approach represents the integrated capabilities of the construction supply chain [
3,
4]. Compared with traditional cast-in-place buildings, it is universally acknowledged that prefabricated buildings can improve production efficiency, shorten project duration, and reduce energy consumption [
2,
5,
6]. As one of the main pillar industries in China, the construction industry has been growing rapidly in recent years [
7], while also posing great challenges such as overwhelming amounts of waste generation and increasing resource consumption [
8,
9]. As a result, prefabricated buildings have been considered a sustainable practice in the construction industry [
10], which can benefit China by improving environmental sustainability, achieving higher quality, and enhancing construction innovation [
11]. Since 2016, national and local governments have successively introduced policies to promote their advancement. For example, the Chinese government has required that the proportion of prefabricated buildings in new construction be increased to 30% by 2026 [
12]. However, so far, it is striking to note that the proportion in existing building is still comparatively low, only about 5% [
13].
In recent years, a growing number of practitioners in China’s construction industry have recommended integrating design and construction (e.g., DB) in projects [
14]. In 2016, the
“Several Opinions on Further Strengthening the Management of Urban Planning and Construction” issued by the State Council set important goals for promoting prefabricated buildings. It emphasized that the EPC mode should be the focus of construction project management, which provided a new direction for the innovation of prefabricated buildings [
15]. EPC (Engineering–Procurement–Construction) is an internationally accepted construction project organization and implementation model [
16]. The general contractor is responsible for the design, procurement, and construction of the whole project, and finally delivers it to the developer in good condition [
17]. In other words, the general contractor has almost total management of a project. Different from other contracting modes, the EPC mode can effectively promote modernization, specialization, and integration, which can solve problems of cohesion difficulties (e.g., different stages, specialties, technology, and management) in the construction industry [
16,
17,
18]. However, the supply chain involves multiple stages in prefabricated buildings, including design, production, transportation, and hoisting; any disruption that occurs at the upper part of the supply chain affects subsequent stages [
19]. These construction activities form a complex system in the precast supply chain, leading to the need for a systematic management mode. Accordingly, the adoption of the EPC mode is a targeted way to solve the obstacles in the development process of prefabricated buildings. In this way, the manufacturing and assembly processes can be systematically considered from the design stage. Furthermore, the organization of general contract management guarantees the integration of prefabricated building design, production, and construction, which is conducive to the realization of lean construction [
14,
15]. Therefore, for prefabricated buildings, the application of the EPC mode is not only a national policy requirement but also an inevitable measure for them to achieve high-quality development in the future.
As a new construction method, prefabricated buildings have brought forth opportunities and challenges to the construction industry. As of today, the development of prefabricated buildings in China is still in its infancy [
20]. A few barriers remain in promoting prefabricated buildings in China’s architecture, engineering, and construction (AEC) industry, such as incomplete policies and regulations, immature market cultivation, an imperfect industrial chain, and inadequate construction technology [
21]. A review of the literature on prefabricated buildings in recent years has revealed several gaps, including: (1) existing studies have targeted the risks of prefabricated buildings in China and rarely linked them to the EPC mode; (2) the professional understanding of the risk perception of the EPC mode has been insufficient, despite many risks having been identified in previous studies; and (3) there have been limited assessment methods for prefabricated buildings using EPC.
Given these research gaps, this study aimed to investigate the risk perception of professionals regarding prefabricated buildings when adopting EPC in China, after referring to the situation in other countries (this study focuses on the prefabricated concrete structure, which is a very popular structural form in the development of prefabricated buildings in China). The main objectives of this study were: (1) to identify major risks involved in the adoption of EPC in prefabricated buildings; (2) to establish a relatively complete prefabricated building risk-assessment system for the EPC mode by obtaining the views of Chinese practitioners; (3) to construct a comprehensive risk-evaluation method with grey system theory. Moreover, the method was applied to a real project to conduct a risk assessment and determine its risk level. The risk-evaluation system applicable to prefabricated buildings using EPC that was established in this study can be used as a checklist for stakeholders to identify potential risks. Using the comprehensive evaluation method, the impact of different risks can be calculated, which fills a significant gap in the body of knowledge regarding risk assessment. Such a method has a practical application value, in that it can help general contractors focus on critical risks that may be encountered in actual assembly projects. Moreover, the findings may be useful for general contractors to seek ways to hedge the risks of prefabricated buildings under the EPC mode in both developed and developing countries.
5. Case Study
5.1. Background Information
In this study, a new middle school project was selected to illustrate the application of the comprehensive assessment method. This project was located in Nanjing, China, and was funded by Nanjing North Park Investment Property Co., Ltd. The total project cost was 380 million RMB and the total floor area was more than 50,000 m2. This project adopted the EPC management mode, with China Construction Eighth Bureau No.3 Construction Co., Ltd. as the general contractor, and required an assembly rate of over 40% (prefabricated concrete structure). The ground buildings were divided into three parts, teaching building, complex building, and student canteen, and the teaching building was made up of four independent buildings connected as a whole, for a total of six buildings. These buildings all had a frame structure. Both onsite and offsite construction methods were applied in this project. The standard floors were constructed using assembly structures, including precast beams, stairs, slabs, and non-load-bearing external walls. The basements and nonstandard floors still adopted traditional construction technology.
The general contractor was affiliated with China State Construction Engineering Corporation Limited, which is the largest contractor in China’s construction industry. The contract scope in this project included the design (conceptual design, shop drawing design, and in-depth design of components); construction; and procurement (materials, mechanical equipment, and tools). Since the EPC contractor undertook almost all of the tasks with a fixed price, it was a great challenge for them to take all or most of the risks.
5.2. Project Implementation Risk Assessment
Due to the lack of databases related to prefabricated buildings, the data for this case was collected by interviewing key members of the project. The selection criteria for the interviewees stated that they should have a senior position or play an important role in the project. A total of 12 managers or engineers (two groups) from the design, procurement, and construction divisions were invited to complete the risk assessment.
Prior to determining the risk level of the project, one group was interviewed to score the indicators in the risk-assessment system proposed above. The scale for scoring (
Table 8) is widely used by scholars to study project management [
71,
74]. After obtaining a score for each indicator, their weights could be calculated based on
Section 4.2. The scores of this group are listed in the
Appendix A and
Appendix B.
Through the equations in
Section 4 above, the risk level of the selected case could be determined. Due to the limited space, the detailed calculation procedure is not described here but is shown in
Appendix B.
6. Results and Discussion
The procedure outlined in the above section allowed us to calculate the risk level of the project based on the comprehensive evaluation method.
Table 9 summarizes the findings of this study. The evaluation value was 3.3203, suggesting that the project risk was at a medium level. Furthermore, the AHP–EWM approach was adopted to assess and rank the weights of different indicators regarding the final performance of this project. As a result, the ranking of the primary indicators in the evaluation system was as follows: construction (0.4814); design (0.2298); procurement (0.0885); management (0.0864); nature (0.0570); and policy (0.0251). These results could help general contractors to identify critical factors that might incur heavy losses for a project, and thus they should pay more attention to these factors and take targeted measures to avoid the occurrence of these risks.
Management risk
The results of the case in this study indicate that the impact of management risk is relatively small but that it is an aspect that cannot be ignored. As a first step, to promote EPC general contracting in prefabricated buildings, the management ability of general contractors should be continuously improved. It can be found from the aforementioned results that U11 accounted for a large weight (0.5451) within the management risk category. The strategic positioning of the general contractor should be intensively intelligent and technological. It is difficult to deliver effective supply chain management of prefabricated buildings by simply adopting a general contracting mode based on “design + production + assembly construction”. EPC general contracting management is not simply the superposition of design, production, procurement, and hoisting. It goes beyond the project to the level of business operation and development strategy. Therefore, the EPC mode should highlight the significance and essence of prefabricated building supply chain management, emphasizing its integration and coordination capabilities, mastery of market resources, and integrated management of various specialties to achieve greater benefits.
Design risk
The design risk reflects the scale and structure of a prefabricated building, which can determine the components and materials required. In this case, the weight of the design risk ranked second. Therefore, the control of the design was comparatively necessary to manage the risk of the whole project. The quality and cost must be strictly controlled from the beginning of the design, and the design needs to play a leading role in realizing the systematic construction requirements [
23]. In the meantime, the design units should carry out an overall analysis of the project from design to procurement, production, and assembly, aiming to ensure the coordination of each step [
39]. The results of this case reflected that the design risk mainly lay in the in-depth design, which had a weight of 0.3420, ranking first in the design risk category. The in-depth design is constructed by collecting the final version of the construction drawings and the technical data of various professions (architecture, structure, equipment, and refined decoration). After checking the drawings, communication with the relevant professionals is undertaken to confirm any unclear or contradictory details [
75]. However, in practice, professionals rarely list the key points of components in the in-depth design. In the design of prefabricated buildings, errors and omissions of precast components can only be avoided by close cooperation between various professionals and participants.
Procurement risk
Unlike in the traditional management mode, design and procurement in EPC can intersect reasonably, since the materials required for the whole process of a construction project are also determined in the design stage. The purchasing personnel can share the product model, market price, and supplier information with designers and engineers so that the three parties are able to jointly choose the best option to meet the procurement needs [
15]. Procurement procedures include purchase, transportation, transfer, and delivery, so a detailed procurement plan is required during the construction process. The calculation results revealed that the procurement risk focused on the quality defects and transportation damage of prefabricated buildings. Since the quality defects of raw materials are an obstacle to the smooth delivery of a project, the general contractor should establish a sound material supplier review system to ensure that their qualifications meet the requirements of the project. Meanwhile, the general contractor should also offer appropriate incentives (e.g., exclusive supply, quality exemption, and technical support) to outstanding suppliers. Furthermore, the precast component transportation problem has also become a major focus for general contractors. Due to the wide variety and large size of precast components, if they are not placed in the transport vehicle correctly, and the protection measures of the vehicles on both sides of the guardrail are insufficient, component damage is likely to occur.
Construction risk
In this project, construction risk occupied the largest weight, which means that it was the biggest obstacle to the smooth implementation of the project. This is a peak investment stage for EPC general contractors, so more attention should be paid to the cohesive management of the design, procurement, and construction, and the coordination between various professionals should be conducted effectively. For prefabricated buildings, the Gordian knot of the construction stage is the lifting of the precast components, which requires elevated machinery and strong connections. The results of the selected case study can also verify this conclusion. Among the construction risk indicators, U46 (temporary support system with poor stability) held the largest proportion of weight (0.4956), far greater than the others. It is well known that assembly is a new method and that components are put together onsite. The temporary support system is a necessary tool for the installation, fixation, and adjustment of components [
57]. After the precast components are hoisted in place, they are fixed to the completed structure through temporary supports [
58]. The location and quantity of temporary supports ought to be set based on the specially designed plan, and the shape of the components and other factors should be considered thoroughly to form a stable triangular support system. Temporary supports, precast components, and completed structures need to be anchored with reserved bolts rather than temporary frills. In addition, the choice of machinery in construction is also a key risk to consider, according to the results of this project. The precast components are usually relatively large, requiring more extensive safety precautions and a greater reliability of lifting machinery when they are hoisted on site, which is a dangerous risk in construction management. To solve this problem, it is necessary to develop a reasonable scheme for lifting. In this case study, it should be explicitly determined whether it is the choice of machinery or the disclosure of technical quality and safety information that needs to be addressed.
Economic risk
The economic risk runs through the whole construction process in EPC assembly projects. Moreover, the distribution of risks between the developers and general contractors is quite different from other management modes, with the general contractors taking on almost all the risks. On this occasion, it was found that the weight of economic risk associated with the developers was the largest. In practice, in the EPC mode some developers may deliberately delay payment for completed engineering tasks or force contractors to bring money into the contract and drive the price down excessively. Furthermore, the cost of prefabricated buildings is higher than that of traditional cast-in-place buildings. Therefore, the relevant behaviors of developers should be considered seriously by the general contractors at the beginning of a project.
Policy risk
In the case study, policy had the least impact on the final determination of the risk level, which is inconsistent with the findings of previous studies by Jiang et al. [
76]. The main reason for this may be that the project was based in Jiangsu, which is one of the provinces selected to demonstrate the assembly construction method in China. Compared to other provinces, Jiangsu has more beneficial policies, in terms of both technology and management, which provide a guarantee for the advancement of prefabricated buildings. For the comprehensive development of prefabricated construction in China, different provinces should learn from the examples of these demonstration provinces and employ appropriate policies as well as measures to promote high-quality growth in combination with their advantages.
Natural risk
Natural risks are inescapable and unstable. Even if they present a relatively low probability of occurrence, they can have a terrible impact on the progress of a project. Therefore, general contractors should devise emergency plans in advance. The natural risks of EPC prefabricated building projects mainly include geological and climate risks. General contractors should consider the geology and conduct a thorough survey before the commencement of the building on the site. With regard to the climate, it is necessary to master the meteorological data of the site. Taking into account the rainfall, temperature, and seasonal characteristics, general contractors should implement different targeted measures to succeed in their projects.
7. Conclusions
Despite the fact that the implementation of the EPC mode in prefabricated buildings has been emphasized by the Chinese government, there have been few studies to address the risks of combining prefabricated buildings with EPC. Accordingly, this study took the risks of EPC assembly projects as its research target, and “risk identification/evaluation/handling” was the central focus. After summarizing the research situation at present, the risks of EPC prefabricated buildings were identified and analyzed through a literature review and questionnaire survey. On this basis, this study established a relatively suitable risk-evaluation system that can provide references for general contractors to carry out risk assessments. In order to effectively obtain the weight of each risk and complete the comprehensive evaluation, an improved weighting algorithm (AHP–EWM) was established, combining subjectivity and objectivity. In addition, using the grey system theory, this study also proposed a risk-assessment model that was applied in a real project. In this case study, a grey–fuzzy comprehensive evaluation method was used to calculate the risk level. Additionally, the AHP–EWM analysis found that the construction and design risks had greater impacts. In conclusion, this study contributes to the body of knowledge on adopting EPC in prefabricated buildings, which has practical application value for general contractors in risk management. Specifically, the current study points out the typical risks that arise when implementing prefabricated buildings in a country (e.g., China). It serves as a foundational work that can be extrapolated on to further investigate the adoption of the EPC mode for prefabricated buildings.
Of course, some limitations to this study must be acknowledged. In fact, there are still few assembly-type projects using EPC, which meant that our research lacked a certain amount of data support. This study only investigated the current risks in China, and so the results are limited by region. In addition, the subjective views of interviewees also had an impact on the results of the data collection. Hence, a relevant database should be established to include more case studies in future works, which could enable practitioners to benefit from big-data analysis to obtain more reasonable results.