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RECOVERY OF MACHINERY AND EQUIPMENTFOLLOWING DISASTER INCIDENTSFOR EQUIPMENT OWNERS AND USERS

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Contents

1.0 IntroduCtIon 2 2.0 ContamInatIon/damageto 4 equIpment 2.1 Firecontamination 4 2.2 Watercontamination 62.3 Impactdamage 7 3.0 stabIlIsatIonofequIpment 8 CondItIon 4.0 assessmentofContamInated 12 equIpment 5.0 reCoveryofmaChIneryand 14 equIpment 6.0 WhoIsbestplaCedtorespond 17 todIsasterInCIdents?

7.0 CostofreCoveryversus 20 replaCement 8.0 reCoveryofInsuredequIpment 21 9.0 Warranty/maIntenanCe 22 ContraCtIssues questIonsandansWers 24

Theoccurrenceofadisasterisadevastatingexperienceforanyorganisation,especiallyfortheshareholdersandemployees.

Thefirstconsiderationofseniorpersonnel,afterensuringthesafetyof theemployees, isusually "howdowe rein-statebusinessoperationswiththeminimumofdelay?"

Commonly,seniorpersonnelareinundatedwithtasksre-quiringtheirurgentattention,andinformationandadvicereceived from various parties involved or wishing tobecome involved. The task of determining the optimumcourseofreinstatementfortheorganisationisoftenverydifficult.If,however,alldecisionsregardingreinstatementarebaseduponeconomics,includingthecostofbusinessinterruption, then reinstatement in the most effectivemanner will almost always be achieved. Resuming busi-ness operations, within the shortest period of time,shouldbetheunderlyingbasisforalldecisionsmade.

Unfortunately, progress being made by persons taskedwiththereinstatementprocess istoooften inhibitedbyconflicting opinions presented by equipment suppliers,advisorsandequipmentrecoveryspecialists.Havingfre-quently witnessed such situations over the past years,the technical team at BELFOR pooled their ideas, andproduced this simple guide, in order to assist personstaskedwiththe reinstatementprocess, inquicklyunder-standingthekeyissues.

Thisguidecoverscriticalconsiderations,suchas:

• Theeffectofcontaminationincidentsupon equipment

• Essentialfirstmeasuresnecessarytostabilisethe conditionofequipment

• Assessmentoftheconditionofequipment,andthe basisfordeterminingthemosteffective reinstatementoption

• Therecoveryprocess

• Selectingappropriateserviceproviders

• Costsofrecoveryversusreplacement

• Warrantyconsiderations

BrianWhitmoreManagingDirectorBELFOR(Asia)PteLtd

EquipmentUser

OEM

RecoverySpecialist

1.0IntroduCtIon

In cases of disaster incidents caused by fire, water, orother chemical residues, or in cases of impact damagetomachineryandequipment,significantsavingswhichmighthavebeenmadeinrespectto:

• Minimisationofbusinessinterruptioncosts• Capitalcostofreplacementequipment• Preservationofclientbase

are often lost, due to the manner in which the initialreaction to the disaster incident is handled. Personsinvolvedinacontamination/damageincidentforthefirsttime are often unaware that sophisticated technicalequipmentcanbesuccessfullyrecoveredandrecommis-sioned, in a relatively brief period of time, if processedbyaprofessionalengineeringrecoveryspecialist.

Many equipment users regard the original equipmentmanufacturer(OEM)asbeingtheauthorityinregardtoallmatters concerning technical equipment. It is acknowl-edged that the OEM has many skills. The OEM initiallydesigned, manufactured, and supplied the item in ques-tion, and has usually installed, commissioned and sinceservicedtheequipment.

Recovery of technical equipment, following the occur-renceofdisasters, however,notonly involvesutilisationof several of the above competencies, but principallyrequiresadditionalskillswhicharenotnormallyavailablefrom the OEM. Tasks such as total dismantling remotefrom the OEM facility, treatment of all components forthe removal of contaminants/corrosionand reassembly,allcarriedoutonanurgent24houraroundtheclockbasis,are tasks which the OEM is almost never equipped orsufficientlyskilledtocarryout.

Consequently theOEM,whenquestionedconcerning thefeasibility of carrying out recovery of contaminated/damaged equipment, will tend to advance the opinion

significantsavingsareoftenlost,duetothemannerinwhichtheinitialreactiontothedisasterincidentishandled.

recoveryinvolvesutilisationoftheskillsofarecoveryspecialist.suchskillsarenotnormallypossessedbytheoem.

that recovery of the affected equipment is “technicallynot feasible”. This opinionmay be correct in respect totheskills of theOEM, but is not correct in termsof thewiderrangeofservicesavailableworldwide.

There are professional recovery specialists availablewho have the skills required, in order to carry out thecritical decontamination phase of the recovery project,enablingtheOEMtocompletetheprojectbycarryingoutrecommissioningandrepairactivities(whererequired).

Insummary,recoveryofalmostanytypeofmachineryandequipmentcanbecarriedouttothehighestinternationalstandards,withoutlossofperformanceorreliability,andwithout a reduction in the useful lifespan of the equip-ment,whenajointandco-operativeapproachisadoptedbythethreeprincipalpartiesinvolved.

theoemwillinvariablyadvancetheopinionthatrecoveryis“technicallynotfeasible”.

almostanytypeofcontaminatedtechnicalequipmentcanbesuccessfullyrecovered.

ajointandco-operativeapproachwillproduceanexceptionallyhighqualityresult.

beforerecovery afterrecovery

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2.0ContamInatIon/damagetoequIpment

equipmentlocatedattheseatofthefire,hasusuallysufferedthermaldamage,andcannotberecovered.

equipmentlocatedsomedistancefromtheseatofthefiremaynothavebeenexposedtodamaginghightemperatures,andcanoftenberecovered

theburningofpvCoftenproduceshydrochloricacid.

Immediatelyfollowingafireincident,equipmentisusuallycontaminatedonly,notdamaged.Contaminationcanberemovedsuccessfully.

electricalfailurecanoccurwhenequipmentremainsenergised.

Contamination/damage to machinery and equipment ismost commonly caused by incidents involving exposureto fire, water or impact. Each situation affects theequipment in a differentmanner, and therefore requiresadifferentrecoveryapproach.

2.1fireContamination

Afire incidentcan leadtoequipmentbecomingexposedtohightemperatures,potentiallycorrosivecontaminationin gaseous form, and electrically conductive contamina-tionintheformofsoot.

• damageCausedbyhightemperatures Allcomponentshaveadesignedmaximumratedtem- perature.Oncethismaximumtemperature ratinghas beenexceeded,permanentdamagewillusuallyoccur. Once damaged, individual components of equipment mustbereplacedwithnewcomponents.

Equipmentlocatedattheseatofthefireoftenexperi- ences permanent damage to a substantial number of components. Recovery, in such instances, often becomesuneconomicaltocarryoutinrespecttothese items, due to the largenumberof componentswhich requirereplacement(withspareparts).

Equipment located further from the seat of the fire may well have not been exposed to damaging tem- peratures at all. Such equipment can usually be economicallyrecovered.

• Contamination

In a typical fire situation, a chaotic reaction occurs, with numerous materials and compounds being con- sumedbyfire.Theensuinggasandsmokecontainsa multitude of chemical elements, due to the chemical reactions which occur. Furthermore, in many fire situations, a significant quantity of PVC materials isconsumed.

PVC, when consumed by fire, will produce chloride. When combined with high ambient humidity levels, hydrochloric acid corrosion cells are initiated on exposedmetallic surfaces. These corrosion cellswill continue indefinitely, unless thorough decontami- nation measures are undertaken, as a matter of urgency.

Theimportantpointtonoteisthatinitiallyfollowinga fire,sootandotherfireproductscanbeclassifiedas surfacecontaminationonly,andthiscontamination can be removed. At this point in time, damage has not normally occurred. If, however,contamination is not immediately removed from metallic surfaces, or stabilisation (corrosion inhibiting) measures are not implemented,corrosionmayoccur,leadingtodamage. It is important tounderstandthedifferencebetween contaminationanddamage.

• electricaldamage

Very often, electrical equipment remains energised, at least during the initial stages of a fire incident. As soot deposits (which are conductive) build up between electrical conductors (on printed circuit boards, wiring connectors etc.) an increasing risk arises of short circuits occurring. Short circuits can causedamagetooccurtothecomponentsinvolved.

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2.0ContamInatIon/damagetoequIpment

floodorfireextinguishingwaterusuallycontainscorrosivecontaminants.

electricalfailurecanoccurwhenequipmentremainsenergised.

reinstatementofimpactdamagedequipmentsimplyinvolvesremovalofthedamagedcomponents,andreplacementwithnewcomponents.

2.2 WaterContamination

Asituationwherewater ingresstomachineryandequip-ment occurs (either by dripping, spraying or flooding)can lead toequipmentbecomingexposed topotentiallycorrosive contamination, and electrically conductivecontamination.

• Contamination

Purewaterinitselfisgenerallynotharmfultocompo- nentsofequipment.Infactde-ionisedwateriswidely utilised in the precision cleaning of electronic and othersensitivecomponents.

Water which enters equipment in an accident or uncontrolled situation is seldom pure, and usually containspotentiallycorrosivecontaminants.

Drying procedures will evaporate and effectively remove water, however, water borne contaminants whichenteredtheequipmentwillremainoncomponent surfaces. As with fire contamination, provided that professional recovery techniques are employed, this contaminationcanbeeffectivelyremoved.

• electricaldamage

As with fire contamination, electrical damage can occur to electrical and electronic equipment, during wateringress,whentheequipmentremainsenergised. Moisture can cause short circuits to occur, leading todamagetocomponents.

Onceindividualcomponentshavebeendamaged,such componentsmustbe replacedwithnewcomponents, aspartoftherecoveryprocess.

2.3 Impactdamage

Impact damage to equipment (which most frequentlyoccursduringtransportationoperations),oftenresultsinpermanentdamageoccurringtoanumberofcomponentsinthevicinityoftheimpact.

Frequently,allothercomponentsofthemachineorequip-mentaretotallyunaffected.

Recovery of such equipment simply involves removal ofdamagedcomponents,andthefittingofnewreplacementcomponents (spareparts), followedby recommissioning.Itseldomoccursthatsuchworkcannotbecarriedoutinthefield.

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3.0stabIlIsatIonofequIpmentCondItIon

specificactionmustbeundertaken,inordertohaltorcontrolongoingcorrosion.

oncetheconditionoftheequipmenthasbeenstabilised,thereisusuallysufficienttimeavailabletoaccuratelyassessthesituation,andmakeinformeddecisions.

Inordertopreserveequipmentfromfurtherdeterioration,followthespecificadviceforwardedbytherecoveryspecialist.

essentialequipmentstabilisationmeasures

In the majority of instances, corrosion, precipitated byfire, soot, smoke, water or a combination of these,progressively attacks componentry. Deterioration willcontinueunlessspecificactionisundertakenintheformof stabilisation measures, in order to halt or controlongoingcorrosion.Inorderforrecoverytoremainaviableoption following a contamination occurrence, it isessential that the equipment is protected from furtherdeterioration as quickly as possible. A delay of only afewdays,orinsomeinstancesafewhours,instabilisingthe condition of equipment can make the differencebetween recovery remaining economically viable, orbecominganuneconomicalproposition.

As soon as a contamination incident has occurred, anexperienced recovery specialist should be contacted, inorder to implement detailed stabilisation measures toprotectequipmentfromfurtherdeterioration.

suchproceduresprovidesubstantialbenefits

• Retains the opportunity to recover equipment (in technical terms), while the viability of the various reinstatementoptionsareevaluated.

• Enhancesthepotentialsalvagevalue(shouldreplace- ment eventually be proven to be the more viable reinstatementoption).

The costs of implementing detailed stabilisationmeas-uresseldomexceed2%ofthecostofnewreplacementequipment.Whenfullprofessionalstabilisationmeasureshave been implemented, a salvage value of 10-15% ofthe replacement price of the equipment can usually besecured. On this basis, stabilisation measures providesubstantialbenefits,irrespectiveofwhethertheeventualsolution involves recovery of existing equipment, orreplacement with new equipment, and therefore such measures should be implemented in all disaster situ-ations, as a matter of course.

Following the implementationofstabilisationmeasures,thereisthenusuallysufficienttimeavailabletocarryoutdetailed engineering assessments of the condition ofequipment, in order to determine whether the mosteconomicallyviableoptioninvolvesprofessionalrecoveryofexistingequipment,or replacementofexistingequip-mentwithnewequipment.

actionswhichshouldbeundertakenasamatterofurgencyfollowingacontaminationincident:

fire

• Disconnectequipmentfromallelectricalpowersourc- es, including backup batteries and uninterruptible power supplies (UPS systems). At power distribution cubicles, remove fusesandsecurecircuitbreakers in the“off”position.

• Open windows and doors and use fans, in order to removesmokefromthepremises.

• Removeportableequipmenttoaclean,dryarea.

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3.0stabIlIsatIonofequIpmentCondItIon

Inordertopreserveequipmentfromfurtherdeterioration,followthespecificadviceforwardedbytherecoveryspecialist.

stabilisationmeasuresshouldbeimplementedwithoutdelay.

duringtheperiodpriortocommencementofrecoverywork,additionalstabilisationmeasuresmaybefoundtoberequired.

• Preserve exposedmetallic surfaces and other corro- sion prone surfaces of mechanical equipment with a suitablepreservative.

Industrialdustandfire-extinguishingpowder

• Disconnect all dust-sensitive equipment from power sources.

• Donotoperatedust-contaminatedequipment.

• Seal off the area from further dust infiltration and eliminatethedustsource.

• Change theair filtersonequipmentwhich is required tocontinuetooperate,beforerecoveryiscarriedout.

• Keepequipmentasdryaspossiblewhereverfire-extin- guishingpowderispresent.

Importantnote:

The stabilisation (corrosion prevention) measures out-linedabovewillonlyminimisetherateofdeteriorationofthe equipment. Thesemeasureswill never fully halt theprogressionofcorrosion.

Accordingly,duringtheperiodpriortocommencementofrecoverywork, theconditionoftheequipmentshouldbefrequentlyre-assessed.Whereit isevidentthatdeterio-ration is occurring at an unacceptable rate, additionalstabilisationmeasuresshouldbeimplemented.

Where it is necessary to move equipment from theaffectedarea,treatallequipment,regardlessofapparentcondition,asiftheequipmentwasnewundamagedequip-ment,duringallhandlingandstorageoperations.

• Where building repairs have commenced, protect all equipmentwithwaterproofsheeting.

• Enclose contaminatedelectrical/electronicequipment inwaterproofsheeting. Installportabledehumidifiers, inordertoreduceambienthumiditytolessthan40% RelativeHumidity(RH).

• Preserve exposed metallic surfaces and other corro- sion prone surfaces of mechanical equipment with a suitablepreservative.

• Controlaccesstoaffectedareas, inordertoprevent furtherspreadofsmoke,sootand/orwatercontami- nation from the fire source, to areas containing equipment,whichmayyetbeuncontaminated.Water

• Immediately disconnect equipment fromall electrical power sources, including backup batteries and UPS systems.Atpowerdistributioncubicles,removefuses andsecurecircuitbreakersinthe“off”position.

• Ifwaterenteredthroughtheceiling,protecttheequip- mentwithplasticsheeting.

• Remove excess water from walls, floors, sub-floors, heatingducts,etc.byvacuumextractionandwiping.

• Removeallwetfurniture,packagingmaterials, filters, etc.

• Turn on heating systems, in order to aid the drying process.

• Enclose contaminated equipment in plastic sheeting. Installportabledehumidifiers,inordertoreduceambi- enthumiditytolessthan40%RH.

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RecoveryOption

ReplacementOption

Total Reinstatement Cost

Equipment Reinstatement Cost

Business Interuption Cost

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4.0assessmentofContamInatedequIpment

objectiveassessmentsshouldbecarriedoutbyskilledengineers.

Keyinformationconcerningboththerecoveryoptionandthereplacementoptionshouldbecompiled.

theviabilityofbothoptions,inengineeringterms,iswellproven.

theviabilityofoptions,infinancialterms,shouldnowbecompared.

Followingstabilisationofcontaminated/damagedequip-ment,itisrecommendedthatanobjectiveassessmentoftheconditionofallaffectedequipmentbecarriedoutbyengineers fully trained and experienced in carrying outsuchassessments.Itisalsonecessary,incertaincircum-stances, that the OEM is involved, in order to provideinformation concerning the availability of replacementspareparts.

TheOEM,meanwhile,shouldalsoconcentrateonassem-bling informationconcerning theavailabilityandpriceofnewreplacementequipment.

TheobjectiveofboththerecoveryspecialistandtheOEMshouldbe toprovide to theequipmentowner,within theshortestperiodoftime,allinformationnecessary,inordertoallowthemtomakeaninformeddecision,baseduponeconomics,concerningthemostviablecourseofactionto follow (i.e. recovery of existing equipment versus re-placementofexistingequipment,withnewequipment).

In order to make an informed decision, the equipmentownerrequirestoknowthefollowinginformation.

1.recoveryofexistingequipment(recovery specialist)

• Recoverycost,includingthesupplyofsparepartsand recommissioning.

• Realistic estimation of the time required, in order tocompleteallrecoveryactivities.

2.replacementwithnewequipment(oem)

• Cost of purchase, delivery, installation, upgrading of services (if required), commissioning, retraining of staff, inventory of spare parts etc. associated with thesupplyofnewequipment.

• Realistic estimation of the time required, to com- pletealloftheaboveactivities,whicharerequired, in order to replace the existing equipment, with new equipment.

3.businessInterruptionCost(equipmentowner)

• Thedaily costof business interruption incurred, asa resultofnonoperationoftheequipmentinvolved.

Withtheaboveinformationavailable,therelativeviabilityofthetwooptionscanbeassessed:

recoveryoptionCost=Recoveryprice+(Daysofbusinessinterruptionxdailycostofbusinessinterruption)

replacementoptionCost=Replacementprice+(Daysofbusinessinterruptionxdailycostofbusinessinterruption)

With the above information in hand, the decision con-cerningwhethertorecoverexistingequipment,orreplaceexisting equipment with new equipment is usually astraightforwardmatter.

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5.0reCoveryofmaChIneryandequIpment

therecoveryprocessisa3phaseoperation.

equipmentwillbereturnedtoservice,freeofcontamination,andperformingtooemspecifications,withoutlossofreliabilityorlifespan.

fireorfloodingincidentscausecontaminationofallinternalcomponentstooccur.

suchcontaminationnecessitatesfulldismantlingoftheequipment,followedbyanaqueousbasedprecisioncleaningprocess.

Onceithasbeendeterminedthatrecoveryofequipmentwhichhasbeenaffectedbyfireorfloodingincidentswilltake place, there are 3 distinct phases of the processwhichareusuallyrequired:

phase1decontamination

phase2recommissioning/repair

phase3Warranty/maintenanceContractreinstatement

Theobjectiveoftherecoveryprocessisalwaystoachievethefollowingresult:

1. Removal of all contamination introduced by the contamination incident in question, such that the equipment meets, upon completion of the work, predeterminedinternationalstandardsofcleanliness, appropriatetothetechnology inquestion.Therecov- ery specialist should be required to guarantee that appropriate standards of cleanliness are met in all instances, and support this claim by providing at leastaoneyearwarranty.

2. Reinstatement of the functional capability of the equipment, in compliance with the original manufac- turer’s specifications, or alternative specifications agreed with the client, prior to commencement of work.

3. The return of the equipment to normal service, with- outlossofreliability,orlifespan.

phase1decontamination

As described previously, contamination introduced byfire or flooding incidents usually permeates throughoutequipment subassemblies, contaminating difficult toaccess crevices and interstices, the surfaces of whichoftenperformfunctionscriticaltothereliableoperationoftheequipment(insideelectricalplugsandsocketsareagoodexampleofsuchsituations).

In order to achieve complete removal of contamination,which is required in order to produce a certifiable andwarrantable result, it is necessary to dismantle theequipment, to the degree that every surface becomesaccessibletotherecoverytechnicianduringtheprecisioncleaningprocess. Inmostsituationstotaldismantlingisrequired,inordertoachievethis.

Due to thedegreeof dismantlingandsubsequent reas-semblyrequired,therecoveryprocessrequiresarelativelyhighdegreeofinvolvementofhighlyskilledengineersandtechnicians, which accounts for levels of costs arising,asoutlinedwithinsection7.0.

Following dismantling, a detailed precision cleaning proc-ess is carried out, utilising aqueous based cleaningagents. This precision cleaning process includes thefollowingmainsteps:

• Pre-cleaning

• Main cleaning including, corrosion removal (employing highpressuresprayingtechniques)

• Rinsing (including medium pressure rinsing utilising de-ionisedwater)

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6.0WhoIsbestplaCedtorespondtodIsasterInCIdents?

followingdecontamination,testingandrecommissioningisrequired.

onoccasions,defectivecomponentsareidentifiedduringtherecommissioningphase,requiringthatrepairworkbecarriedout.

recoveryoftechnicalequipment,followingcontaminationincidentsinvolvesskills,notnormallyavailablefromtheoem.

• Drying (including high volume warm air, and vacuum dryingtechniques)

Following theprecision cleaningprocess, theequipmentmustofcoursebereassembled.

phase2recommissioning/repair(ifrequired)

Oncethedecontaminationprocesshasbeencompleted,the reassembled equipment requires to be recommis-sioned, in a similar manner to the way in which theequipment was commissioned, by the original manufac-turer,wheninitiallyinstalled.

The process of recommissioning will ensure that theequipmentrecommencesoperationsmoothlyandsafely.Therecommissioningengineerwill identifyandcarryoutminoradjustmentswhicharefoundtobenecessary,andensure that all functionswhich the equipment has beendesignedtoperform,areavailableandoperational.

Fromtimetotimeasmallnumberofdefectivecomponentsare identified, requiring that repair work be undertaken.This repair work should be undertaken, in the samemanner as repairwork is undertaken following a normal“inservice”failure.

Trained and competent technicians or engineers arerequired to carry out fault diagnosis work, in order todetermine which component has failed. Once a faultycomponenthasbeenidentified,thiscomponentisusuallyrequiredtobereplaced,withanewcomponent.

phase3Warranty/maintenanceContractreinstatement

Pleaserefertosection9.0forfurtherdetails.

Professionaldisasterresponse/recoveryrequires imple-mentation of the various activities covered withinsections3.0 to5.0.Theseactivitiescanbegroupedasshownbelow:

InitialIncidentresponseprocess

• Stabilisation• Inspection• Assessment• Definingoptions

recoveryprocess

• Decontamination• Recommissioning/repair• Warranty(maintenancecontract)

Many equipment users regard the original equipmentmanufacturer(OEM)asbeingtheauthorityinregardtoallmatters concerning technical equipment. It is acknowl-edged that the OEM has many skills. The OEM initiallydesigned,manufacturedandsuppliedtheiteminquestion,and hasusually installed, commissionedandsinceserv-icedtheequipment.

Recoveryoftechnicalequipment,followingtheoccurrenceofdisasters,however,notonlyinvolvesutilisationofsev-eral of the above competencies, but principally requiresadditionalskillswhicharenotnormallyavailablefromtheOEM. Tasks such as total dismantling remote from theOEMfacility,treatmentofallcomponentsfortheremovalof contaminants/corrosion and reassembly, all carriedoutonanurgent24houraroundtheclockbasis,aretaskswhich the OEM is almost never equipped or sufficientlyskilledtocarryout.

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RECOVERY EQUIPMENTTASK SPECIALIST MANUFACTURER

Initial Incident Response Process

Stabilisation, Yes No ExperienceAssessment,Defining Options Recovery Process Decontamination Yes No Experience Recommissioning/ Yes YesRepair (refer to note) Warranty Yes Yes (Maintenance Contract)

Consequently theOEM,whenquestionedconcerning thefeasibility of carrying out recovery of contaminated/damagedequipment,willtendtoadvancetheopinionthatrecovery of the affected equipment is “technically notfeasible”. This opinionmay be correct in respect to theskillsoftheOEM,butisnotcorrectintermsofthewiderrangeofservicesavailableworldwide.

The following table compares the range of servicesprovidedbyprofessionalrecoveryspecialistswiththoseprovidedbyequipmentmanufacturers.

rangeofskillsofrecoveryspecialistvsoem

Note: Capabilitymaydependuponavailabilityof technicalinformation.

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6.0WhoIsbestplaCedtorespondtodIsasterInCIdents?

Consequently,theoem,beingnotawareoftheexpertiseofrecoveryspecialists,willoftenadvancetheopinionthatrecoveryis“technicallynotfeasible.”

Ingeneral,equipmentmanufacturershavenoexperienceincarryingoutthedecontaminationphaseoftherecoveryprocess.

Ingeneral,equipmentmanufacturershavenoexperienceincarryingoutthedecontaminationphaseoftherecoveryprocess. It is due to this fact that specialist recoveryorganisationshaveevolved.

Itispreferablethattherecommissioningandrepairphaseoftheprojectbecarriedoutbytheequipmentmanufac-turer. If however, the equipment manufacturer fails toperformtheseservices,therecoveryspecialistcanoftenprovidesuchservicesdirectlyorviaathirdpartyserviceprovider,skilledintherecommissioningandrepairoftheequipmentinquestion.

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Scientific and medicalequipment

Recovery price, expressedas a % of equipment replacement price.

50%

0%Low Medium High

Number of machine componentsper $1,000 of capital cost

Textilemachinery

Range of typical recovery prices

Generalproductionmachinery

(Custom made) (Mass produced)

7.0CostofreCoveryversusreplaCement

8.0reCoveryofInsuredequIpment

Ingeneral,thetotalcostofrecoveryofmachineryandequipmentusuallyfallswithintherangeof5-40%ofthereplacementcostofequipment.

recoveryspecialistpersonnelarenottrainedininsurancematters.

thereareusuallyvariousinsurancecontractcomplianceissueswhichequipmentownersshouldbeawareof.

Consultyourinsuranceadvisers,inrespecttoallinsurancerelatedmatters.

The recovery price submitted by the recovery specialistdepends upon the combinationof at least the followingfactors:

• Complexityoftheequipment• Quantityofcomponents• Degreeofcontamination• Facilitiesavailableinwhichtocarryoutthework• Location• Timeframewithinwhichrecoveryisrequiredtobe completed• Replacementsparepartsrequired• Cleanlinessstandardrequired

In general, the total cost of recovery of machinery andequipmentusuallyfallswithintherangeof5-40%ofthereplacementcostofequipment.

Asthecostofcarryingoutrecoveryworkdependslargelyupon the quantity of components which are required tobe dismantled, precision cleaned and reassembled, therecoverycost,expressedasapercentageofthenewre-placementcostoftheequipment,tendstovaryaccordingtoindustrytype(refertothegraphbelow).

Contamination incidents involving machinery and equip-ment are very often the subject of an insurance claim.Personnel representing the recovery organisation areusuallynottrained in insurancematters.Thereare,how-ever, several principles which appear to apply to mostinsurance contracts, which an insured party should beawareof,concerningactionsrequiredinordertomitigatethe loss (stabilisation), and the issues surroundingentitlement to indemnification of repair costs versusreplacementcosts.

Inallcases,theinsuredpartyshouldseekfurtherclarifi-cation of obligations and entitlements under the termsof existing insurance contracts, from their insuranceadvisers.

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9.0Warranty/maIntenanCeContraCtIssues

theoemwillusuallydeclareexistingwarranties“nullandvoid”,followingacontaminationincident.

therecoveryspecialistwillprovideawarrantycoveringtheworkcarriedout.

Ifrequired,aperiodof “post-recoveryfullservice”canbeprovided,onamonthlyorannualfeebasis.

equipmentCoveredbyoriginalmanufacturer’sWarranty

Newmachinery and equipment is normally suppliedwitha manufacturer’s warranty, which in most instancesextendsforaperiodof1yearfromthedateofpurchaseby the end user. Following the occurrence of significantcontamination incidents, such as fire and flooding, theequipmentmanufacturerwillnormallydeclaretheexistingwarranty null and void, as the equipment has beensubjectedtoenvironmentalconditionswhichwerepoten-tially damaging and outside conditions specified by theOEMfornormalandreliableoperation.

Whena recovery specialist carriesout decontaminationwork, a warranty should be provided which guaranteesthat all contamination has been removed, and that theworkmanshipprovidedwasofahighstandard.Thiswar-rantycoverstheworkactuallycarriedoutbytherecoveryspecialist.

The warranty provided by the recovery specialist maynot include rectification of other faults, which maymanifest themselves following recovery, which wouldhaveoccurred,regardlessofwhetherornotthedisasterincident tookplace.Therefore, in thecaseofequipmentstill covered by the original manufacturer’s warranty, atthe time of the occurrence of a disaster, the basicwarrantyprovidedbytherecoveryspecialistmaynotfullyreplace thewarranty enjoyed prior to the occurrence oftheincident(refertosummary).

equipmentnotCoveredbyoriginalmanufacturer’sWarranty

Forequipmentwhichwasnotcoveredbyamanufacturer’sfullfunctionalwarrantyatthetimeofthecontaminationoccurrence, professional recovery of the equipment to

recognised international standards will effectively rein-statetheequipmentowner/usertopre-incidentcondition.

provisionofaperiodof“post-recoveryfullservice”

RegardlessofOEMwarrantyconditionsprevailingatthetime of the disaster incident, if requested, a period of“Post-RecoveryFullService” (equivalenttothemanufac-turer’soriginalwarranty)canoftenbeprovided,followingcompletionofrecoverywork.

“Post-Recovery Full Service” work can either be carriedout by the recovery specialist directly, or by the OEM.“Post-Recovery Full Service” is usually provided on amonthlyorannualfeebasis(inasimilarmannertoamain-tenancecontract),inadditiontothecostoftheprovisionofrecoveryservices.

summary

In all instances, the provision of a period of “Post-RecoveryFullService”issimplyamatterofeconomics.

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questIonsandansWers

q:howquicklycana recoveryspecialist recoverequipment?

q:Willthefunctionality ofequipmentbe impaired,orcould performance specificationsbe compromisedfollowing professionalrecovery?

q:Willthemediumand longtermreliability ofequipmentbe compromisedfollowing inadvertent contaminationand subsequent professionalrecovery?

questionsCommonlyaskedConcerning professionalrecoveryofequipment

a:A professional recovery specialist is totally commit- ted to providing a rapid response and can generally recoverequipmentwithinaperiodofdays.Timeframes for recovery are typically less than 25% of that re- quiredtoprocurenewequipment.

a:No, functionalityofequipmentwill notbe impairedor performance specifications compromised! If the re- coveryspecialistconsidersthatanitemofequipment can not be recovered to full “pre-incident” condition, they will recommend that the item should best be replaced,withanewitemofequipment.

Professionalrecoveryspecialistswillonlyrecommend professional recovery in situations where detailed technicalassessments,carriedoutbyengineers,have verified that the equipment can be returned to full pre-incident condition, in terms of full functionality, reliabilityandlifespan.

a:Reliabilityofequipmentwillnotbeaffected,provided thataspecialistcarriesoutprofessional recovery, in full compliancewith international standards.There is awealthoffullydocumentedevidenceavailable,gain- edoveratwentyyearperiod,whichoffersverification that reliability following recoveryexceedsorat least equalspre-incidentreliability.

a:In themajority of situations, yes! In instanceswhere the recovery specialist does not have the required expertise in-house to complete the final stages of recommissioning,andtheequipmentmanufacturerhas elected to deprive their client of such services, the recovery specialist can normally source assistance fromindependentthirdpartyspecialists.Thisincludes theprocurementandsupplyofmostspareparts.

a:Aprofessionalrecoveryspecialistwillprovide,asstan- dard, at leastaone year comprehensivewarrantyon all work carried out. Over and above this standard warranty, leadingrecoveryspecialistswillprovideany additional and reasonable degree of warranty cover which might be requested, or maintenance support, foraminimaladditionalfee.

a:Professional recovery specialistswill normally utilise international standards for levels of component cleanliness, such as the Joint Industry Standard ANSI/J-STD-001B.

Itisalsoadvisabletoselectarecoveryspecialistwho constantlyensuresthat theirprocessesaremeeting the expected levels of quality, through ISO 9000 certification,orequivalentauditingprocesses.

a:The ability of modern day electronic equipment to withstand high temperatures is misunderstood and under-estimated by the majority of people, including many engineers and technicians. Most integrated circuits and electronic components are specified to be able to withstand temperatures up to 125°C and often up to 150°C or higher. Following manufacture mostcomponentsarestress,or “burn in” tested, for extended periods of time, at high temperatures. Assembledprintedcircuitboardsareusually “reflow” solderedattemperaturesaround180°Cto200°C.

When a professional recovery specialist undertakes assessmentsof fire contaminatedequipment, based upon the condition of various materials used in the manufacture of the equipment, it is possible to establish, with sufficient accuracy, the temperatures which equipment would have been subjected to during the course of the fire. If it is considered that ambient temperatures present during the fire were likely to have exceeded the maximum temperature rating of individual electronic components, recovery of that particular item of equipment would not be recommended.

q:Canarecovery specialist professionallyrecover equipmentwithout thesupportofthe equipment manufacturer?

q:Canprofessional recoveryproceedif theequipment manufacturerrefuses toreinstatewarranties followingrecovery?

q:doestheworkcarried outbyprofessional recoveryspecialists conformtoany recognisedstandards?

q:Willelectronic componentsbe damagedasaresult ofthermalenergy fromafire?

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q:Willwater/moisture/ humiditydamage sensitiveelectronic components?

q:Whydodecisionsin regardtorecovery havetobemade, withahighdegree ofurgency?

a:Electronicequipment,whilstnotelectricallyenergised, isextremelyresistanttomoisture,anddirectcontact withwater.Theabilitytowithstandmoistureisvastly under-estimated by most people, including qualified engineersandtechnicians.

Following fabrication, semiconductor and most other typesofelectroniccomponents,areencapsulatedand hermeticallysealed,andthusareimpervioustomois- turepenetrationundernormalatmosphericpressures. Following assembly, most printed circuit boards are subjected to an aqueous based cleaning process, usually utilising high pressure spray cleaning tech- niques. Electronic printed circuit boards are required, by manufacturers, to be capable of withstanding immersion in various liquids, in order to survive the manufacturingprocess,inexcellentcondition.

Ingressofmoisture/water intoelectronicequipment, therefore,seldomcausesdamagetooccur(unlessthe equipmentwaselectricallyenergisedatthetimeofthe incident).Damagereallyonlyoccurs later, ifstabilisa- tionmeasuresare not implemented, and corrosion is allowedtodevelop.

a:Followingmostcontaminationsituations,thecondition of equipment will rapidly deteriorate, usually due to corrosion, to a degree that may result in profes- sional recovery becoming an uneconomically viable proposition.

If youareunable tomakeadecision toproceedwith recovery of equipmentwithin 24 hours, it is strongly recommended that stabilisation of the condition of the equipment be implemented, in order to minimise ongoing deterioration, whilst awaiting a decision on whethertorecoverorreplacetheequipment.

q:Whyshouldn’tthe equipment manufacturerbe directlyengagedto recoverthe equipment?

q:Whyshouldweutilise theprofessional servicesofarecovery specialist,in preferencetoa “cleaning”company?

questIonsandansWers

a:The majority of manufacturers will admit to having littleornoexperienceinthefieldofrecoveryoftech- nicalequipment,followingcontaminationbyfire,water, chemicalspillsetc.Whereamanufacturerisprepared toconsiderundertakingrecovery(themajorityappear to elect to decline undertaking such work) they will usuallyattempt“repair”oftheequipmentbyreplacing relatively expensive major subassemblies, which could otherwise be decontaminated by a recovery specialist.

This alternative approach to recovery by the equip- mentmanufactureroftenresultsinsignificantlyhigher recoverycosts,andriskduetoresidualcontamination affecting those components not replaced, combined with longer periods of business interruption, than couldotherwisebeachievedbyutilising theservices ofarecoveryspecialist.

a: Professionalequipmentrecoveryspecialistsareengi- neeringcompanies,specialisingsolelyintherecovery (restoration) of technical equipment following con- tamination/damage.

Theworkwhich is required tobecarriedout involves ahighdegreeofdismantlingoftheequipment,inorder to inspectandadequately treatallcomponentparts. This is the only method by which a consistent and warrantableresultcanbeachieved.Thehighstandard ofworkcarriedoutconstitutesprofessionalrecovery, and should not be confused with “general cleaning without dismantling” which is often unsuccessfully carriedoutby“cleaningcompanies”.

Professionalequipmentrecoverywasfirstestablishedas aviablealternativetoreplacementwithnewequipment, morethan20yearsago.Todate,tensofthousandsof successful recovery projects have been carried out worldwide, including examples of virtually every con- ceivabletypeofequipmentevermanufactured.

For Further inFormationplease contact:

singapore (regional head office)

BelFor (asia) pte ltdEmail: inquiries@sg.belfor.com

Japan

BelFor (Japan) co., ltdEmail: inquiries@jp.belfor.com

china

BelFor recovery services (shanghai) co., ltdEmail: inquiries@cn.belfor.com

taiwan

BelFor (asia) pte ltd - taiwan BranchEmail: inquiries@tw.belfor.com

www.belfor.com

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