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9/10/2013 2
This is NOT where you want
to find your valve handle…
Project Engineering – Safety Moment
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9/10/2013 3
…especially when it came
from HERE!
Project Engineering – Safety Moment
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9/10/2013 4
…from this high!
Project Engineering – Safety Moment
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• Scott Brandenburg – BASF – Owner
• Bob Reymond – Burns &McDonnell – Engineer
• Willie Lefever – Performance Contractors – Constructor
• Matt Wilson – Mitsubishi Polysilicon - Moderator
Project Engineering – Why? Where? How Much?
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OWNER
Scott Brandenburg
Vice President Engineering and Maintenance
BASF Corporation
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• 25+ years experience
• Engineering and Maintenance
• US and Europe
• Executed projects with 8 different Engineering companies
• Contracts: LSTK, EPC, EP, E, Reimbursable
• 4 Joint Ventures
• Types: Environmental driven, Emergency rebuild, New
Technologies, Turnarounds, Grassroots Ethylene Complex
•
Scott’s Background
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• Too much turnover on Project Team (Owner, Engineer,
Constructor). Loss of knowledge setbacks occur.
• Too much cut and paste engineering delays attention to design
issues until HAZOP unearths them
• Size of job- if not staffed properly causes delays and quality
issues especially if Contractor over-focuses on cost
• Late deliverables by Owner or Engineer impact Construction
contractor, causes misalignment
• Large project=large risk, without good Project Engineering can
lead to short sighted decision making
What contributes to an “Unsuccessful Project”? And how I lived through it.
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• Lack of understanding between Contractor and Owner
regarding HAZOP and Pre-startup Safety review by
EPC contract
• Contractor uses “blackbox” approach for package units
• Contract revisions and incentives not used early
enough to address potential delays and responsibilities
late in the project
• Operations/Maintenance input ignored
• Turnover packages/responsibilities between
Construction and Commissioning and Operations is not
well defined.
Unsuccessful Projects (continued)
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ENGINEER
Bob Reymond
Vice President, Projects
Burns & McDonnell
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ENGINEER
Bob Reymond
Vice President, Projects
Burns & McDonnell
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• 25+ Years Experience
• 17 Yr Engineering Firms / 3 Yr Owner
• Mostly EPC / Some engineering only
• International and Domestic
• Power, Nuclear, Petrochemical, Foods
• Most projects $100MM - $500MM
• Largest project $2 Billion
Bob’s Background
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• Owner project objectives well defined
• Alignment of goals
• Good scope definition; discipline
• Safety & Constructability considered early
• Disciplined planning process
• Realistic schedule expectations
• Design effort correlates to project size & complexity
Engineering a “Successful Project”
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• Significant external change
• Vendor information
• Engineer staffing
• Project Schedule
Engineering into Crisis
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Unacceptable Compression
Inefficient Schedule
Engineering Quality vs. Schedule
Schedule Length
Engineering Quality Acceptable
Schedule
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CONSTRUCTOR
Willie Lefever
Vice President
Performance Contractors, Inc.
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• 35 years experience
• Primarily US construction, (1) international
• 10+ EPC or EPCM projects
• Contracts: LSTK, CPFF
• Power, Refining, Petrochemical, Upstream
• Types: Grassroots, Expansion, Environmental, Retrofit
• Technology led- vendor/contractor partnering
Willie’s Background
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“Successful Project”
• Lump Sum EPC - $50+MM
• Proven process technology (reference plant basis)
• Clear project objectives
• Contract strategy alignment
• Defined Project Risk- all parties
• Clear roles and responsibilities (all contracting parties)
Willie’s Project Example(s)
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“Not So Good” Project
• Lump Sum EPC - $50+MM
• Technology and Schedule driven project
• Inexperienced technology provider in EPC project lead role
• EPC Contractor prime : construction subcontractor relationship
• Incomplete scope definition
• Segregated EP and C schedule
Willie’s Project Example(s)
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“Successful Project”
• Cost savings
• Ahead of schedule
• Client achieved business objectives
“Not So Good” Project
• Front end engineering & procurement delays
• Scope creep/quantity growth
• Construction schedule compression/excess costs
Willie’s Project Example(s)
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• Fill out an index card
• Text – 251-377-4495
Questions?
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Our project is:
• Process Industry
• $200M
• Green field
• Technology provided and not cutting edge
• 5 Full Time owner’s engineers for PM and support
• Project is EPC
• Permits done by owner
Cost of Project Engineering and Impacts on Project?
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How much for Project Engineering?
• PE reduces costs.
• Last cost item to look at.
• Who cares?
• Somebody cares.
Cost of Project Engineering?
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How much for Project Engineering?
Answer:
• Front end? 1-2%
• Detailed design? 8 – 12%
• Construction Management? 6 – 8%
• Start up assistance? 1-2%
• Documentation and Clean up? Included above.
A Definitive Answer
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• How does it happen?
• What are the consequences?
Cost
Schedule
Quality
• How do you get it just right?
Project Engineering Over / Under
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The Experts Say:
CAUSES • Underestimation.
• Lack of definition.
• Engineering costs become significant.
• Schedule delays, costs increase, ripples through entire project.
SOLUTIONS • Plan to get it right.
• Experience in all the right places.
• Get construction involved early.
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• Fill out an index card
• Text – 251-377-4495
Questions?
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• How does project engineering minimize the impact of an ever evolving design?
• How do you know when to kill the engineer, finish construction and start up?
• Is this the sole responsibility of the Owner?
Ongoing Design – Scope Creep
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• Discipline, discipline, discipline.
• Learn when to FREEZE! Live with it.
• Engineers abhor a vacuum. An engineer will fill the schedule.
• Rods up, pencils down.
• Accountability: Project manager, owner. Hold engineers accountable to schedule.
• Could be EPC contractor depending on contracts.
Famous Sayings
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• Definition of Project Controls – Part of the project team dedicated to making sure we do what we’re supposed to do.
• Why is this needed?
• Is it a good thing?
• How to determine if it is worth the cost?
• Keys to execution
Project Controls
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• Absolutely necessary.
• Can’t manage project by “feel”?
• Cost should be minimal.
• Focuses on forecasts, not the past.
• Early warning system.
• Develop the correct project metrics and monitor religiously.
We all agree!
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• Fill out an index card
• Text – 251-377-4495
Questions?
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• Project Engineering is the key component to a successful project. How do we make sure each participant understands and accepts the appropriate risk?
• When is the appropriate time to have clear understanding? Why can’t we get it done at the beginning?
• How can we stay out of court?
• Ultimately – Is the owner responsible?
RISK is not just a Board Game.
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Risky Business
• Clear and concise and
proven contract
language.
• Address risk and
problems immediately,
DO NOT WAIT!
• Agree on Project Risk
Matrix.
• He who controls risk
should take
responsibility.
• Anna Karenina Project
Model
• Owner should allocate
risk contractually.
• Some risks only the
Owner can have.
• Owner has to live with
it.
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• One trend among owners is to have third party oversight of the Engineer and/or Constructor.
• Why is this needed?
• Is it a good thing?
• How to determine if it is worth the cost?
• Keys to execution
Third Part Oversight
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• Inexperienced Owner
• Limited resources available.
• Roles defined and communicated
• Danger of competing agendas
• Adds cost and redundancy
• Owner has to evaluate his/her Project toolbox
Survey says!
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• How can Project Engineering influence:
• Construction?
• Operations?
Safety
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• Design for construction techniques and risk
• Constructability reviews
• Include construction and operations in all safety
reviews
• Detailed planning on sequence of construction
• Project Engineering need to insure mindset
Safety Pays:
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• How do you integrate a third party technology provider into the project team?
• Owner?
• Engineer?
• Constructor?
• How do you handle the risk?
Third Party Technology Providers
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• Contractual synergy – all parties
• Assigning risk adds cost
• Define responsibilities and deliverables
• Performance guarantees
Get it straight up front
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What is the biggest hindrance to communications:
• Owner to Engineer?
• Engineer to Constructor?
• Owner to Constructor?
Then how to improve?
Communications
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• Owner be full time present.
• Talk, don’t email.
• Get goals aligned and check often.
• Meet face to face.
• Then talk some more.
Get Personal:
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Project engineering becomes more critical?
• Craft labor shortage/ skill deterioration?
• Professional labor shortage?
• Modularization in all it’s forms
What is the Future? Is the Future Now?
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• Blatant advertisement – Go to the forums on this stuff.
• Send in evaluations
Matt says:
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