233471225 module 10 managing construction and completions participants manual rev0

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Managing Construction and

Completions

Project Management TrainingModule 10

Rev B 06/02/2008



© Copyright 2007 WorleyParsons Services Pty Ltd

This document has been prepared on behalf and for the exclusive use of WorleyParsons.This document may not be reproduced without the express permission of the Business

Process Owner

Level 12, 333 Collins StreetMelbourne Vic 3000 AustraliaTelephone: +061 3 8676 3500Facsimile: +061 3 8676 3505www.worleyparsons.com

WorleyParsons Services Pty Ltd ABN 61 001 279 812

Project Management Training Module 10 Managing Construction and Completions

Rev Descripti on Orig Review WorleyParsons App roval

Date

A Initial draft Joslin GuestJane Woodhead

Bruce LeighMike Reilly

B Issued for trial Jane Woodhead Bruce Leigh Mike Reilly 6/02/2008

C Issued with trial comments Bruce Leigh Mike Reilly Mike Reilly 26/02/08

0 Issued for Use Bruce Leigh Mike Reilly Mike Reilly 04/03/08



Rev 0 04/03/2008 Managing Construct ion and Complet ions Page i

Managing Construction and Completions

About this Module ..................................................................................................... 1

Overview of the WorleyParsons Pro ject Management Process ............................. 3 Overview .................................................................................................................... 4

Roles and Responsib ili ties ....................................................................................... 9 Role of the Project Manager ........................................................................................ 9 Role of the Construction Manager ............................................................................... 9

Construction Manager’s Responsibilities ........................................................... 9 Role of the Completions Manager ............................................................................. 10

Completions Manager’s Responsibilities ......................................................... 11

Project Planning ...................................................................................................... 14 Project Initiation ......................................................................................................... 14 Principles of Scheduling ............................................................................................ 14 Pre-mobilization of Construction................................................................................ 16 Construction Pre-mobilization Meeting ...................................................................... 16 Completions Pre-mobilization .................................................................................... 16 Completions Pre-mobilization Meeting....................................................................... 16 Construction Methodology (Brownfield vs Greenfield) ............................................... 17 Prerequisites / Critical Construction Inputs ................................................................ 17 Preliminary Construction Planning............................................................................. 18 Detailed Construction Planning.................................................................................. 19 Site Establishment and Logistics ............................................................................... 20

Constructabil ity and commissionability ................................................................ 23 Construction and Completions Teams Input into Execution Planning and Design ..... 23 Constructability Reviews............................................................................................ 24 Opportunities for Modularization and Pre-assembly .................................................. 26 Pre-assembly............................................................................................................. 26 Modularization ........................................................................................................... 26

Benefits of Modularization ......................................................................................... 27 Site Organization and Resource Management ...................................................... 31 Site Organization....................................................................................................... 31 Resource Management ............................................................................................. 35

Construction Staffing Plan ............................................................................... 35 Obtaining Suitably Experienced Staff, Subcontractors..................................... 35 Demobilization................................................................................................. 35

Communication and Team Work ............................................................................ 37 Project Culture, Trust and Team Work....................................................................... 37 Home Office and Site Office Communication and Teamwork .................................... 37 Contractor Communication and Team Work.............................................................. 37

Coordination .................................................................................................... 38 Cooperation..................................................................................................... 39

Issue Resolution ...................................................................................................... 40

Quality Management................................................................................................ 41 Construction Contractor’s Responsibilities for Quality Control ................................... 41 Inspection and Test Plans ......................................................................................... 42 Checklists and Rectification of Defects...................................................................... 42 Inspection Completion and Punch Listing .................................................................. 42 Quality Records ......................................................................................................... 42

Protocols for Construction Site Visits ................................................................... 43 Security Plan ............................................................................................................. 43



Page ii Managing Construct ion and Completi ons Rev 0 04/03/2008

Visitors....................................................................................................................... 43 Inducted but Infrequent Visits .................................................................................... 43 Surveillance Visits ..................................................................................................... 44 Dress Code................................................................................................................ 44

Health, Safety and Envi ronment (HSE) .................................................................. 46 Safety ........................................................................................................................ 46 Zero Harm ................................................................................................................. 46 Strategies for Promoting Safety................................................................................. 46

Risk Analysis ................................................................................................... 46 Contractor Selection ........................................................................................ 46 Other Strategies .............................................................................................. 47 Proactive Involvement of Key Construction Contractors .................................. 47 Health and Safety Plan.................................................................................... 48 Communication................................................................................................ 48

Environment .............................................................................................................. 49 Impact of Unforeseen Environmental Problems............................................... 49

Industrial Relations ................................................................................................. 50 Management of Construction Contractor Industrial Relations .................................... 51

Risk Management—Cons truct ion........................................................................... 53 Aligning with Corporate Zero Harm............................................................................ 53 Construction Risk ...................................................................................................... 53 Risk / Hazard Control................................................................................................. 53

Risk Assessment Register Management......................................................... 54 Mitigation Plans ......................................................................................................... 54

Const ruct ion and Field Procurement ..................................................................... 55 Types of Construction Contracts................................................................................ 55

Examples of Contract Types............................................................................ 55 Interface between Construction and Procurement........................................... 55 MARIAN .......................................................................................................... 56 Materials Management.................................................................................... 56 Third-party Suppliers and Their Subcontractors .............................................. 57

Managing Site Contracts ........................................................................................... 57

Vendor Representations.................................................................................. 57 Contracts Placed by the Customer .................................................................. 58

Construct ion Control and Report ing ...................................................................... 60 Construction Progress Measurement and Control ..................................................... 60 Measurement Tools and Methodologies .................................................................... 60

Construction KPIs............................................................................................ 60 Construction Progress ..................................................................................... 61 Construction Forecasts.................................................................................... 61 Contractor Performance Measurement............................................................ 61

Construction Reports................................................................................................. 62 Report Format ................................................................................................. 62 Construction Site Reports................................................................................ 62

Project Meeting.......................................................................................................... 63 Construction Project Meetings......................................................................... 63

Document Management .......................................................................................... 65 Controlled Documents ............................................................................................... 65 Document Control Procedure for the Construction Site ............................................. 65 Document Review and Sign-off ................................................................................. 65

Document and Drawing Libraries..................................................................... 66 Document Control Registers...................................................................................... 66

Completions—Commission ing and turnover to the Customer ............................ 67 Pre-commissioning.................................................................................................... 67 Commissioning.......................................................................................................... 67



Rev 0 04/03/2008 Managing Construct ion and Completi ons Page iii

Commissioning Stage 1 — Mechanical Completion ........................................ 67 Commissioning Stage 2 — Function Testing ................................................... 68 Commissioning Stage 3 — System Commissioning ........................................ 68 Commissioning Stage 4 — Start-up and Ramp-up .......................................... 69 Operation and Performance Testing................................................................ 70 Interim Turnover to the Customer.................................................................... 70

Interim Facilities Turnover ............................................................................... 70 Commissioning and Interim Turnover Documentation ..................................... 71 Completions Management Tool (CMT)...................................................................... 71

Change Management............................................................................................... 73 Overview ................................................................................................................... 73 Key Procedures for Construction ............................................................................... 73

Appendix A Glossary .............................................................................................. 75

Appendix B References .......................................................................................... 81

Appendix C Types of Construct ion Contracts ..................................................... 83 Comparison of contracts.................................................................................. 86

Appendix D Answers to Review Questions ........................................................... 88



Rev 0 04/03/2008 Managing Construct ion and Complet ions Page 1

ABOUT THIS MODULE

The Managing Construction and Completions module is a critical and complex part of

project management training. The module, Managing Construction and Completions,

provides training in process (es) that WorleyParsons uses to understand how constructionand completions are managed and progressed. This includes the relative responsibilities of

the Project, Construction and Completions Managers as part of the project team and

managing construction site activities. The principles and processes described in this

module are valid for all sizes of projects and business process, and to all regions / locations.

This module is the 10th module in the suite of WorleyParsons Project Management Skills

Development Training. The modules in the suite are:

Module 1 Project Initiation, Scope Management and Project Close-out

Module 2 Project Controls and Commercial Management

Module 3 Managing Project Risk

Module 4 Business Management Systems

Module 5 HSE Management

Module 6 Proposals

Module 7 Managing Project Quality

Module 8 Team Leadership and Communications

Module 9 Managing Project Procurement

Module 10 Managing Construction and Completions

These modules are primarily targeted at providing entry level training for personnelentering Project Management at the Project Engineer level, although they may be used to

enhance the skills of a wider set of personnel.

Module Learning Objectives

Following completion of this module you will have:

A basic understanding of what the Construction and Completions functions provide

to complete their part of an EPCM project.

An understanding of the methodologies and tools that will enable you to work withConstruction and Completions to successfully deliver a project.



Page 2 Managing Construct ion and Completi ons Rev 0 04/03/2008

Module Learning Outcomes

On completion of this module, you will be able to:

Understand the importance of having Construction and Completions involvement

early in project initiation with input into the Total Installed Cost (TIC) estimate, inputto Work Breakdown Structure (WBS), Layout / Model boundaries and planning

Understand the needs of Construction, including AFC drawings and materials being

available on time, and how this determines Engineering and Procurement priorities

Plan and incorporate constructability reviews and construction lessons learnt into

project design and contracting

Address design strategy opportunities for design standardization, modularization

and pre-assembly

Understand typical Construction and Completions organization charts and

associated roles and responsibilities

Have a basic understanding of the key processes used by Construction and

Completions

Understand the importance of HSE in Construction and Completions including some

key processes to achieve Zero Harm

Have a basic understanding of Industrial Relations (IR) requirements

Have a basic understanding of the typical progress reporting provided by

Construction and Completions.

Training Method

The WPMP Managing Construction and Completions training should be facilitated by a

trained facilitator. Case studies are provided.




OVERVIEW OF THE WORLEYPARSONS PROJECTMANAGEMENT PROCESS

This module covers the process by which projects are constructed and commissioned.

The Managing Construction and Completions module is a critical part of project

management. The principles and processes presented in this module apply to all five

phases of a project.

Figure 1. WorleyParsons Project Management Process




OVERVIEW

The primary objectives of WorleyParsons are to successfully deliver to a Customer the

specified project safely, on time, at the contract price and achieve a reasonable profit in

return for performance of its work.

Construction and Completions Management involvement through every stage of the

project, beginning with the original concept and project definition, yields the greatest

possible benefit to Customers.

What is Construction

Construction is the building, fabrication or assembly of any infrastructure on a site or sites.

Although this may be thought of as a single activity, in fact construction involves multi-

tasking. It may be likened to a very large and complex set of building blocks (such asLeggo) where detailed and structured layers of assembled items are crucial to the

success of all subsequent layers.

The construction site(s) are managed by the Construction Manager, supervised by the

Project Manager, with additional assistance provided by the Design Engineer or Project

Architect. Every construction project requires a large number of managers and skilled

tradesmen to complete the physical task of construction.

The construction process:

Commences during the Conceptual Design / Basis of Design (BOD) phase (i.e.

Identify/Evaluate) — where budget and schedule, organization structure,documentation and information requirements, supplier deliverables and site

requirements are identified. The Estimate will be required to capture the Customer

expectations, objectives and schedule constraints in forming a Total Installed Cost

(TIC) estimate into categories, such as quantities, labor hours, plant equipment and

material costs, fabrication, modularization, and installation, purchasing plans,

contracting strategy and the Project Execution schedule.

The Total Installed Cost (TIC) estimating information generated during proposal

phase provides the point of departure for the project budget (Control Budget). The

distribution of the project budget is an allocation process that results in each cost-

element receiving a budget that represents its value in the overall project (weighting-

process)The project Estimating Methodology by construction should include as a minimum;

Staffing levels

Temporary facilities

Equipment Requirements

Quantity and Scope Derivation.




Manual Labor Pricing.

Unit Manhours for Installation.

Productivity.

Pre-Assembly, Offsite Fabrication, Modularization.

Contractor’s Indirect costs.

Freight.

It is absolutely essential for Class 3 (end of Define Phase) and Class 4 (definitive)

estimates, that the Work Breakdown Structure (WBS) is agreed with the project

team and customer before commencing preparation of the estimate. It is therefore

very important that Construction and Completions have an input into the

development as once the Work Breakdown Structure (WBS) is defined, the cost

estimate is the point from which all project control processes commence. When

there is disconnect between the cost estimating, cost control and schedule

processes, a project will be extremely difficult to manage.

We have the opportunity to then collect history data that can be used for verification

of ‘norms’ and provide reference data for ‘order of magnitude’ type estimates.

Finally, we can demonstrate to our customers (and prospective customers) that we

have a solid process for managing their work and the skills and systems to back this

up.

Continues through the Front End Engineering Design (FEED) phase, engineering

and procurement, fabrication and construction and testing. (i.e. Define/Execute)

What is Completions

Completions describes the management, development, planning and site preparation for

the final stages of a project, where the new or upgraded plant and equipment is checked,

tested, commissioned and started up to first time operational status.

The completions process:

Commences during the Conceptual Design/Basis of Design (BOD) phase (i.e.

Identify/Evaluate) — where budget and schedule, organization structure,

documentation and information requirements, supplier deliverables and site

requirements are identified

Continues through the Front End Engineering Design (FEED) phase, engineering

and procurement, fabrication and construction and testing, and completions phases

(i.e. Define/Execute)




Ends in the completed and operating facilities being turned over to the Operator.

This Turnover is generally before the Project Closeout and formal turnover of

documentation and will therefore include an interim delivery of specific

documentation and data to enable the plant to be effectively and safely operated

and maintained.

What is Commissioning

Commissioning is the demonstration that the plant and equipment has been built to the

plans and specifications and performs to the design intent. Commissioning can also be

described as the field activities of the completions process.

The process of field commissioning:

Commences during the construction phase (Commissioning Stage 1)

Ends with the facility started up and turned over to the operator.



Rev 0 04/03/2008 Managing Con

Figure 2 Stages in Construction and Completions

BOD Basis of Design

FEED Front End Eng Design

Engineering

Procurement

FAT(Factory Acceptance Testing)

Construction/Completions Engineering Support

Construction Development & Preparation

Construction AttendPunchLists

Completions Development & Preparations

Commissioning Stage 1(Mechanical Completion)

Commissioning Stage 2(Function Testing)

Commissioning Stage 3 (System Commissioning)

Commissioning Stage 4(Start Up & Ramp Up)

Oper

Construction/Completions Procurement Support

Early FAT

Activity

Early FAT

Activity

Early Procurement

Activity

Early Const

Activity

Early Const

Activity

BOD Basis of Design


Engineering

Procurement


Construction/Completions Engineering Support








Oper

Construction/Completions Procurement Support

Early FAT

Activity

Early FAT

Activity

Early Procurement

Activity

Early Const

Activity

Early Const

Activity

BOD Basis of Design


Engineering

Procurement


Construction & Completions Engineering Support








Oper

Construction & Completions Procurement Support

Early FAT

Activity

Early FAT

Activity

Early Procurement

Activity

Early Const

Activity

Early Const

Activity




Review Questions

Q1 What are the two objectives that you will expect to be satisfied at the completionof this module?

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Q2 Name four things that you will be able to do at the completion of this module.

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Q3 Briefly describe, a) Construction, and b) Completions.

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ROLES AND RESPONSIBILITIES

Role of the Project ManagerThe primary role of the Project Manager is to establish management processes and

controls that result in a successful project and is therefore ultimately responsible for the

total project delivery. On an EPCM project, this involves working with the Construction

(and Completions) Manager to ensure an integrated project delivery

Role of the Construction Manager

The Construction Manager is ultimately responsible for all construction activities, IndustrialRelations and HSE standards compliance relating to the project’s scope of work at the

construction site(s). As a result, the most important role of the Construction Manager is

single point accountability for the delivery of the construction scope of work.

The common responsibilities of a Construction Manager fall into the following eight

categories:

Safety Management and promotion of HSE culture

Construction Management Planning

Cost Management

Time ManagementQuality Management

Contract Administration

Construction Management

Industrial Relations.

Construction Manager’s Responsibilities

Construction Managers have the following responsibilities:

Single point accountability for the delivery of the project construction Scope of Work,

encompassing constructability during design and execution at site

Liaising with the Engineering Manager on the progress and status of engineering for

each plant facility inclusive of priority of design deliverables and sequence of events

Carry out constructability reviews on all project Workpacks



Page 10 Managing Constructi on and Completi ons Rev 0 04/03/2008

Liaise with the purchasing and contracts managers on the progress and status of

contract awards, scheduled milestone dates and priority long lead item purchase

orders

Prepare the construction contracting strategy proposed and implemented for the

project

Ensure that owner-procured items are being expedited in a timely manner to meet

the required on site dates

Monitor construction progress, in particular the critical path, in conjunction with the

Controls Manager, so that schedule slippage can be monitored and the effects

minimized

Monitor overall construction labor by discipline and that adequate staffing resources

are available to ensure that facilities are provided to fully service the site

requirements

Review the sequencing of activities, co-ordination of procedures and systems,

construction strategy proposed and implementation of the strategy for the project

Consult with the owner’s construction team and operations staff to ensure minimal

disruption to both operations and construction activities

Supervise the procedures for tag outs, outages and tie-ins to maximize existing

productivity, minimize safety risks and integrate with the project schedule

Ensure all mechanical completion activities are completed to the prescribed quality

and in line with the project schedule

Sign off system / commissioning packs and punch lists to the Completions Team

Provide construction support and resources during commissioning stages

Execute the project safety management plan and ensure the highest safety

standards attainable are achieved through good safety managementManage the Industrial Relations strategies and issues with other project team

members, including the Project Manager and the Human Resource / Industrial

Relations Manager

Ensure all environmental and community guidelines and requirements are met

Ensure that Change Management is functioning and that Completions are notified of

all changes.

Role of the Completions Manager

The Completions Manager is ultimately responsible for all completions activities, including

the planning and preparation for the site commissioning activities, and interim turnover of

the facilities to the Customer after start up. The Completions Manager inherits from the

Construction Manager the responsibility for the Site and its administration, including

Industrial Relations and HSE compliance. As a result, the Completions Manager

becomes the single point accountability for the delivery of the completions and

commissioning scope of work.




The common responsibilities of a Completions Manager fall into the following eight

categories:

Safety Management and continued promotion of HSE culture

Completions Management Planning, Development and Execution

Cost and Time Management

Quality Management

Site Operator interfaces

Site Administration after construction

Operator Training

Interim Facilities Turnover to the Customer / Operator, pending formal project

Turnover by the Project Manager

Completions Manager’s Responsibilities

Completions Managers have the following responsibilities:

Single point accountability for the delivery of the project completions Scope of Work,

encompassing commissionability during design and development stages

Liaising and coordinating with the Engineering Manager on the progress and status

of engineering for each plant facility inclusive of priority of design deliverables and

sequence of events

Liaising and coordinating with the Project Manager and Engineering Manager to

provide early completions input to the design process and ensure the engineering

design deliverables interface with the Completions Management Tool (CMT)

Facilitate the early selection and set up of the CMT

Carry out commissionability reviews on all project work packs

Liaise and coordinate with the purchasing and contracts managers on the progress

and status of contract awards, scheduled milestone dates and priority long lead item

purchase orders

Liaise and coordinate with the purchasing and contracts managers to provide

completions interest input to selected purchase orders and agreements, including

identification of completions requirements for Factory Acceptance Testing

Prepare the Completions Strategy, Completions Management and Completions

Execution Plans and Completions Schedule for the project

Ensure that owner-procured items are being expedited in a timely manner to meet

the required on site dates

Monitor construction progress, in particular the critical path, in conjunction with the

Controls Manager, so that schedule slippage can be monitored and the effects

minimized

Liaise with the Construction Manager and Constructor to ensure construction

completion is System focused




Ensure adequate resources (personnel) are identified, trained and available to

address the completions plan and schedule

Ensure adequate site resources (e.g. offices and accommodation; plant tools and

equipment; test instruments and equipment; fills and lubricants etc) are identified

and available to address the completions plan and schedule

Ensure adequate supplier support and specialists are identified and available to

address the completions plan and schedule

Liaise with Regulators and other Statutory Bodies as necessary during the

Completions process

Consult with the Customer operations staff to ensure minimal disruption to both

operations and construction activities

Select and implement the Permit to Work System, Tagging and Lockout and

Energization Notice systems to minimize safety risks and integrate with the project

schedule

Ensure all completions activities are completed to the prescribed quality and in line

with the project schedule

Prepare System handover/turnover packs and ensure all all signatures, check lists,

punch lists and agreed attachments are available

Provide completions support and resources during early operation and performance

testing

Execute the project Safety Management Plan and ensure all risks are reduced to an

ALARP level

Manage the Industrial Relations strategies and issues with other project team

members, including the Project Manager and the Human Resource / Industrial

Relations Manager

Ensure all environmental and community guidelines and requirements are met

Ensure that Change Management is functioning and that Completions are notified of

all changes

Deliver Customer operator training as identified in the Contract




Review Questions

Q4 Provide at least three of the common responsibilities of the construction

manager.

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Q5 How would you describe the single most accountable role of the Construction

Manager on the site?

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Q6 Is the Construction Manager the sole person responsible for Industrial Relations

on a project?

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Q7 Who is ultimately responsible for construction and project delivery?

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PROJECT PLANNING

The overall Project Schedule aligns the logic, precedence and duration for each

engineering, procurement, construction and completions task. Engineering, procurement,

construction and completions groups develop deliverable and requisition registers,identifying all deliverables to be produced on the project including defined Scopes of Work

for selected Contractors to perform.

The Project Schedule should be driven from the back end (i.e. starting at the facility start

up and turnover to the operator and working backwards). Therefore the Construction and

Completions Manager will influence the Project schedule and deliverables.

The developed scope of work may consist of a number of separate packages of work with

limited constraints and interfaces between packages. Priority in scheduling will be given

to those packages that are critical path to achieving the overall project start-up schedule

and/or that add greatest value, taking into account Operational constraints dictated byshutdowns and the logic that dictates start-up of the plant where applicable.

Early Construction and Completions involvement is absolutely necessary for all phases of

a project as stated on page 4, namely;

Proposals

All types of projects, and not isolated to EPCM styled projects.

There is no project that cannot benefit from Constructability and Commissionability

Reviews.

Project InitiationThe Construction Manager and the Completions Manager must ensure that the project

set-up fully considers the needs of construction and completions processes; and include

their input into the Engineering, Procurement, and Contract Plans and strategies.

The Construction Manager, working with the Project Management Team, should ensure

the Project WBS will meet with the minimum Contracting and Construction requirements,

thereby allowing the project team to track Engineering progress, deliver IFC deliverables

and materials, to suit the Contracting Packaging and Construction Sequencing.

For example by area, by work package (if required), by system.

Principles of Scheduling

Scheduling is dealt with in detail within Module 2 - Project Controls and Commercial

Management




The key considerations the Project Management Team should address to incorporate

Construction and Completions requirement into the Project Schedule are:

The Project Schedule should be driven from the back end

Early Construction and Completions involvement is absolutely necessary

Project WBS must meet with the minimum Contracting and Constructionrequirements

It must identify issue of key deliverables

Following initial approval, the schedule should be re-issued monthly as a minimum and

weekly during construction. Changes to contractual key dates and the baseline schedule

should be managed and agreed with the Customer by the Management of Project Change

(MOPC) process.

The timely availability of Approved for Construction (AFC) engineering deliverables and

the Required on Site (ROS) dates for procured equipment and materials to meet theConstruction Team’s needs is what should drive the Engineering and Procurement

Team’s schedules. These requirements are input into the planning process by the

Construction Team. A simplified example of the completions requirement, driving construction, and in turn

driving engineering and procurement would be:

A Fin Fan Cooling System – A Fin Fan Cooling System is required to be operational

by Day X.

To achieve this a commissioning period of say 5 days is required. Therefore the

constructor must complete construction by Day X – 5

The constructor requires 21 days to build the system (footings, structure, assemble

and fit cooling assemblies, tie in electrics etc). Therefore all equipment must be on

Site by Day X – 5 - 21

As the equipment takes 45 days to assemble, fabricate and deliver, the Purchase

Order must be issued by Day X – 2 – 21 – 45.

Assuming the supplier/fabricator does not require final engineering drawings until 5

days after purchase order issue; Engineering must be complete by Day X – 5 – 21 –

45 + 5




Construction Pre-mobil ization

The Construction Manager should complete pre-mobilization details with the Construction

Team.

The Construction Team with the help of the Construction Manager determines whether

sufficient backlog exists to support initial and ongoing field activities. The Construction

Team must ensure drawing and material deliverables exist to support as a minimum,

continuous construction activities avoiding unnecessary downtime and delays.

Materials Management, Procurement and Contracts will be responsible for supporting this

effort as it is the expectation that primary construction contracts would have been

awarded at this time in preparation for a notification to prepare to commence site

activities.

It is important that the Project Manager;

Ensures that the Construction Team does not mobilize too early, and

Ensures that the mobilization plan is based on an assured flow of ongoing work

Construction Pre-mobil ization Meeting

A pre-mobilization meeting should be held to determine if Construction should mobilize to

support the scheduled Start of foundations date, initial earthworks date and Temporary

Facilities installation.

The Project Manager is responsible for organizing and chairing the Construction pre-mobilization meeting attended by the project team and other invited parties. Predicted

dates for release of engineering information and documents and material / equipment

deliveries will be analyzed for the effect on the planned start of construction. A consensus

decision will be confirmed for holding the existing date or for the establishment of a

revised date. The Completions Manager may also be in attendance

Completions Pre-mobil ization

Prior to mobilization of the Completions Team, the Construction Manager will consult with

the Completions Manager to identify the site facilities, support and processes that will

remain after the Constructor demobilizes.

Completions Pre-mobilization Meeting

Prior to mobilization of the Completions Team, the Completions manager will arrange a

Completions HAZID to address safety and risk issues associated with the site

commissioning activities.




Construction Methodology (Brownfield vsGreenfield)

The inherent problems associated with Brownfield construction projects (on-shore and off-

shore) that differ from Greenfield construction projects (on-shore and off-shore) is theneed for early engineering and construction input into the design and plant layout to

determine a clear understanding of operational needs and risks associated with

construction installation, additional safety requirements, and tie-ins of piping / electrical /

instrumentation / control systems, equipment and commissioning activities.

There must be a very clear understanding that the need for additional constructability

reviews substantially increases for Brownfield Projects whereby Customer Operations and

Maintenance require an early input and a dedicated Tie-in Manager may be necessary

due to the complexity and nature of tying into live operating plant.

Emphasis is required to ensure that expected delays to construction will be captured inour estimate due to Operational interruptions and inherent conditions of a Greenfield

project e.g.;

Lower productivity

Length of time to obtain Work permits

Refer to:

Detailed Construction Planning Procedure, FCP-0004

Construction Preliminary Planning Procedure, FCP-0002

Construction Management Plan Task Sheet, FCP-9001

Prerequisi tes / Critical Construction Inputs

For the successful execution of a Project, effective planning is essential. Those involved

with the design and execution of the infrastructure must consider the:

Environmental impact of the job

Successful scheduling

Site safety

Availability of materials

Logistics (Road transport limitations, shipping schedules, resources etc)

Inconvenience to the public caused by construction delays

Preparing tender documents.




Comprehensive management through every stage of the project, beginning with the

original concept and definition of the project, maximizes the benefit to Customers from

Construction Management.

Preliminary Construction Planning

The purpose of preliminary construction planning is to ensure that construction

management issues are considered during the early phases of a project. The details of

the requirements are set out in the Construction Preliminary Planning Procedure, FCP-

0002.

The Construction Manager is responsible for:

Completing all the necessary construction preliminary planning

During the course of the preliminary planning, keeping the Project Manager

informed about issues and progress, and making recommendations to the Project

Manager where issues and needs identified may impact on planning by other

disciplines

Documenting the outcome of the preliminary planning in a Construction

Management Plan (CMP) outline.

The CMP is updated progressively as project planning progresses and throughout the Life

Cycle of the project. It is a component of the Project Execution Plan (PEP).

The Project Manager needs to ensure that this preliminary Planning is being done. This isthe case even for small projects and engineering projects where there is a need by a

Customer to have some form of construction activity to take place even by others.




Detailed Construction Planning

The purpose of detailed construction planning is to provide a basis and guidelines for

construction in the form of a Construction Management Plan (CMP). Refer to Construction

Management Plan Task Sheet, FCP-9001.

The CMP is developed by the Construction Manager. It is initially developed — as a

formalized and detailed plan — during the Define phase and is a key deliverable at the

gate prior to Execution. The CMP is further refined in the Execute phase (also sometimes

referred to as the Approved for Construction (AFC) stage) to reflect detailed design

completion.

Figure 3 Constructio n Management Plan

The CMP development typically addresses the following elements:

Incorporating constructability reviews and construction lessons learnt into design

Ensuring the design strategy address opportunities for standardization,

modularization and pre-assembly

Detailing scope, work packages, schedule, budget estimate and resourcing –

required as part of the overall project plan

Identifying Contracting Strategies

Construction Method statements (principles) which will be developed and expanded

to form a Workpack content

Defining construction organization structure and responsibilities

Issue to project team

Customer approval

Revise at Approved for

Construction (AFC) stage

E

X E C UT E

Review CMP

DE F I NE

Draft CMP




Identifying interfaces with other functional groups (engineering, procurement, local

community, operations etc.) both during design and construction

Identifying Customer approval requirements

Construction procedures / methods

Ensuring appropriate controls are in place to manage safety, environment, quality,

cost, schedule, community relations and documentation

Site layout including temporary facilities, materials storage / laydown areas, parking

etc.

As Project Manager you are responsible for:

Ensuring that the CMP is being prepared in accordance with the overall project

requirements

Reviewing and approving the CMP

Issuing the CMP to the Customer.

The goal is to issue the first draft of the CMP to the Customer within 45 days of contract

award, unless another timeframe is specified in the contract.

Site Establishment and Logistics

Before construction can begin it is necessary to set up site facilities and services. This is

sometimes overlooked or given a low priority when bidding or setting up a project.

However, the execution team cannot be mobilized to the site until the site is established

and the logistics of supplying labor, equipment and materials have been put in place.

Attention is needed to ensure that Legalities and Customer requirements are addressed

and agreed regarding who controls the site with respect to permits, access and security,

etc.

The Construction Manager is responsible for ensuring the site is established and all

utilities and services required are in place.

Site establishment includes considering:

Reviewing the Construction Management Plan (CMP)

Determining responsibilities at the site—Customer and other stakeholders

Reviewing Mobilization Plan and considering the support services requirements for

mobilization

Reviewing the Contracts Plan and confirming the contracts strategy




Reviewing the Project Insurances and confirming they are current.

Determining the project layout for all temporary facilities

Obtaining necessary licenses and permits

Consideration of required temporary facilities

Establishing utilities for and at the site, including Information and Communications

Technology (ICT) requirements

Establishing facilities at the site—for example, transport and storage,

accommodation, sanitary arrangements, fire and other hazard protection

Developing site administration procedures

Developing a HSE plan for the site which includes:

• Access to the site

• Site security

• Safety and training

• On-site accommodation and facilities

• Vehicle movement and access

• Trash and recycling facilities

Setting up the site offices and services

Developing a plan to resolve site-related issues

Developing site security procedure.

The requirements for site establishment are set out in the Site Establishment Procedure,

FCP-0005.

Review Questions

Q8 Name five key deliverables that the schedule gives to the project team.

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

Q9 What must the Construction Team ensure exists before construction

commences?

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________




___________________________________________________________________________

Q10 What things determine construction methodology and what are the differences in

associated risks?

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

Q11 Name three typical elements that make up the Construction Management Plan

(CMP).

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________




CONSTRUCTABILITY AND COMMISSIONABILITY

Construction and Completions Teams Input intoExecution Planning and Design

The Construction and Completions teams input into execution planning and design is

required early in a project’s development and needs to be continued through to execution

(from feasibility, through concept selection, FEED and detailed design). This input is

necessary to determine constructability, commissionability, maintainability, operability and

the project’s schedule.

Constructability and Commissionability addresses key questions about a project and links

them across disciplines and will address WorleyParsons’ commitment to maintaining

health, safety and environment. Constructability and Commissionability addresses thefollowing questions:

Can it be constructed and how best to do it efficiently?

• Contracting strategies

• Design and project schedules

• Sequencing

• Technical issues, including design tolerances and standardization

• Field data

• Existing facilities and operations

• Mobilizations

• Equipment requirements and suitability for construction

• Construction technology and techniques• Tie-in requirements and timing

• Transport requirements

• Completions techniques

Can it be maintained?

Can it be operated?

The purpose is to ensure that construction-related items are considered from Feasibility

through to Concept Selection, FEED and detailed design phases of the project. The

constructability assessment is governed by the Constructability Input Procedure, FCP-

0003.

Commissionability considerations are outlined in Commissionability Task Sheet (Doc No

WIP)

Construction shall ensure that the BOD covers all potential construction cases; these will

include Fabrication Location, transportation and installation techniques. As Project Manager, you are responsible for:




Ensuring constructability and commissionability input is being achieved early

enough in the project life cycle

Facilitating the resolution of conflicts between the Engineering, Procurement,

Construction and Completions schedules. The resolution need to be based on

robust logic and sequencing of the required work. Continued concerns in meeting

project target dates must be communicated to the Customer.

Constructability Reviews

Preliminary constructability and commissionability reviews can be conducted during the

tender or feasibility stages. More detailed and thorough reviews are conducted during

detailed design. Reviews are often conducted at the 10-20% and the 50-60% complete

stage. There are logistic and process benefits in conducting the early constructability and

commissionability reviews simultaneously.

Participants in any constructability and/or commissionability review should consist of the:

Project Manager

Project Engineer

Construction Manager

Completions Manager

Lead Design Engineers

Safety Manager

Quality Manager

Procurement/Contract Manager

Operations representatives (as required)

Customer (as required)

Construction Contractors

Note: Brownfield constructability and or commissionability reviews, inclusive of

additional planning, are key activities where access and congestion issues are

more appropriately addressed and planned for. These activities are more critical

for Brownfield than for Greenfield Projects and therefore should be carried out on

a more frequent basis.

As a minimum, constructability reviews include:

Safety, including safety in design

Interface with operations and other contracts

Tie-ins (Brownfield projects)




Ability to pre-assemble as much as possible off site or on the ground prior to

erection

Installation access

Transportability

Ease of construction

Standardization

Ease of Commissioning

Cost effectiveness

Fabrication, Installation and Completions methodologies to reduce schedule

A check that design cases cover ‘Construction Phases’ as appropriate and not just

operating conditions.

Constructability should be conducted using the Constructability Guideline, FCP-0056.

The outputs of the constructability reviews are:Inputs into all plans including BOD, which is part of the Project Execution Plan,

including appropriate input into the project schedule.

Specific constructability checklists across functions, scope and disciplines. These

checklists are formal project documents and meet all the document control

requirements. They must be approved by the project’s nominated Constructability

(Construction) Coordinator and meet minimum requirements as set out in EMS and

WPMP.

Action list for changes to design and procurement

Early planning for proper project activity sequencing, including Completions

activities, i.e. Commissioning Stages 1, 2, 3 and 4.Identification of any unusual factors affecting the construction of the project that are

solved during the development of the facility scope package. Issues include heavy

lifts requiring special equipment, schedules, manpower shortages, critical

shutdowns, and special plant requirements

Identification of any unusual costs to the project that are not identified by normal

estimating methods, including special cranes, equipment, or tools, additional

personnel, winterization, dewatering, special safety requirements

Identification of plans for staffing requirements, facilities, warehousing,

documentation, information flow, quality, safety, cost, and schedule

Identification of heavy lift / rigging plans requirements and the development of cost

options for major and complex lifts.




Opportunities for Modularization and Pre-assembly

This is the methodology and processes which are considered to best target minimum on

site construction hours and meeting the target commissioning schedule with the use of

preassembly and modularization.

At the outset of every project, we need to evaluate our Customer’s needs, the project’s

size, the installation site, and other factors to identify the most appropriate construction

option. Most large projects allow for some modular construction, and a combination of

modular and ‘stick-built’ erection may be called for in many cases.

Note: Stick-built construction refers to the building method where the entire project is

built at the job site piece by piece. Stick built construction builds outside on the

ground in all types of weather and has to work with material purchased for the

construction activities

Pre-assembly

Pre-assembly is the manufacture and assembly of a complex unit comprising several

components prior to the unit’s installation on-site.

The key concept is that of combining several high intrinsic-value components into a

finished ‘skid’ so that when delivered to site, only positioning and connection to services is

required before putting into service. Some prefabricated elements may be combined into

preassembled skids.

Note: Where a number of pieces of equipment are assembled onto a common steel

frame, this is known as a ‘skid’ and is shipped as a complete built up unit. For

example a skid could comprise of a pump, a motor, a lube oil system etc where

all of the components are connected, pre-wired and piped.

Modularization

Modularization enables a package of equipment, piping and the associated

instrumentation and electrics to be pre-installed into a box structure, which can then betransported to site.

Modularization is a technique which involves and affects all phases of design,

procurement and construction / erection. Modularization should be seriously considered

for all projects although the decision to use modular techniques is primarily aimed at

removing work from the operating site and is the obvious choice for off-shore projects. It

also impacts on ongoing maintenance and operation.




Methodology - modularization is a technique which involves and affects all phases

of design, procurement and construction / erection.

Early definition - process plant may be segregated into packages that can fit within

the defined module size.

Module grade levels - plant grade level is to be maintained giving good andunrestricted access in and out of the plant when operating.

Module configuration - defines the module use, for example process, pipe rack,

pump skids, dressed equipment or manufacturer’s package.

Module sizing - the setting of a size that will be maximised with the upper limits of

possibility having been defined.

Module contents – defines the equipment that will dictate the overall size and

layout of a module.

To fully support modularization, detailed engineering and design should be aligned to the

Modularization strategy i.e. 3D model boundaries should be aligned to the modularization

battery limits. This will assist with IFC deliverables and material MTO’s by module in later

detailed design.

It is essential Construction and Engineering agrees these boundaries prior to the start of

3D modeling and should be driven by the Construction Manager.

The Modularization approach needs to be determined early as it will influence the way in

which Engineering and Procurement will execute their work.

Benefits of Modularization

Modular construction offers a number of advantages over conventional ‘stick built’

construction:

The bulk of the fabrication and assembly are performed at external facilities, which

allows work to be performed under controlled working conditions

By reducing fieldwork, modularization minimizes the project’s impact on the

Customer site; a significant advantage when the installation site is an operating

plant

Modular construction minimizes lay-down space, an important benefit when the field

site is small or congested, and reduced delays due to adverse weather

Foundation requirements are often simplified with the use of modules

Modular construction results in fewer fitting errors and re-works by pre-fitting

components prior to shipment

Requirements for highly skilled labor on-site are minimal, an advantage in areas

where skilled labor is either costly or unavailable




Procurement is often simplified, especially when the installation site is located in an

area where raw materials and equipment are expensive or difficult to obtain

Modular construction can shorten schedules by allowing for concurrent processes,

such as fabrication, permitting and logistical arrangements.

Modular construction allows the work to be completed in a lower cost environment,perhaps overseas

A modular construction presents an opportunity to test and partly commission some

components and / or sub-system early.

Review Questions

Q12 At what phases of a project process are constructability reviews conducted?

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

Q13 At what typical percentage completions should constructability formally be

conducted during the detailed design phase?

___________________________________________________________________________

___________________________________________________________________________

Q14 Does the frequency rate for constructability reviews differ between Greenfield

and Brownfield projects and for what reasons?

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

Q15 Who in your opinion would be best suited to participate in constructability

reviews?

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________




Q16 What advantages are there in either Modularization or Pre-assembly as a more

suitable method of construction?

__________________________________________________________________________

__________________________________________________________________________




Activi ty 1—Group Discussion

Provide at least five examples that indicate the benefits that constructability gives to a project and

what they would mean for a project’s schedule and costs.




SITE ORGANIZATION AND RESOURCEMANAGEMENT

Site Organization

The key roles and reporting lines for the project should be set out in organization charts.

The required detail in the charts will depend on the:

Size and complexity of the job

Construction, Completions and contracting strategies adopted for the project

This generates the disciplines and numbers of personnel needed for the project.

Figure 4 shows a typical project organization chart. Figure 5 shows a typical Constructionsite organization chart. Figure 6 shows a typical Completions site organization chart.

The Construction Organization must be structured to provide the best supervision and

control of site activities.

The construction site needs to be staffed with personnel suitably experienced in the

management of Construction Contracts and the on-site activities.

The construction organization and staffing arrangements must be documented in a

Construction Staffing Plan, which is updated periodically.



Page 32 Managing Constructi on and Completi ons

Figure 4 Typical Home Office Organization Chart



Rev 0 04/03/2008 M

Figure 5 Typical Const ruct ion Site Organization Chart

ConstructionManager

ConstructionManagement

HSE

Manager *Construction

Engineering *

Construction

Inspection *Contract

Administ rat ion

Contracts AdministraContracts Engineers

SuperintendentsSupervisors― Civil― Structural― Mechanical― Piping― Electrical― Instrumentation

― Welding

― Scaffolding― Rigging

Resident EngineerField EngineersDocument Control

Site Services *

Project QualityManager

Materials

Management *

ProjectManager

Materials ControllerWarehouseField Purchasing

Office ServicesHuman resourcIndustrial Relat Accounting

Safety AdvisorsTrainingSecurityEnvironmentCommunity

Inspectors― Civil― Structural― Mechanical― Electrical― Instrumentation― Welding― Piping

* Functional

Home



Page 34 Managing Constructi on and Completi ons

Figure 6 Typ ical Completions Organization Chart

CompletionsCMTCoordinator

Completions

Manager

Commissioning

Superintendent

Permit To Work

Coordinator

Handover/

Turnover

Coordinator

Punchlist

Coordinator

Senior

Commissioning

Discipline

Technicians

Commissioning

Discipline

Technicians

Operations

Representative

WorleyParsonsProject Manager

Commissioning

Engineer

-Electrical

-Instrument

-Process

-Mechanical

-Electrical-Instrument

-Process

-Mechanical

Completions

Manager

Commissioning

Superintendent

Permit To Work

Coordinator

Handover/

Turnover

Coordinator

Punchlist

Coordinator

Senior

Commissioning

Discipline

Technicians

Commissioning

Discipline

Technicians

Operations

Representative

WorleyParsonsProject Manager

Commissioning

Engineer

-Electrical

-Instrument

-Process

-Mechanical

-Electrical-Instrument

-Process

-Mechanical

Site Administration



Rev 0 04/03/2008 Managing Construct ion and Completi ons Page 35

Resource Management

Construction Staffing Plan

The Project Manager and the Construction Manager develop a proposed construction

organization and resource plan for the Project, involving Human Resources (HR) in this

process.

A preliminary Construction Management Manpower Plan shall be generated in FEED to

form the basis of Construction Management Labor estimates. This shall be aligned with

the Site Organization Chart and shall be updated at regular intervals through detailed

engineering.

At an early stage of the project establishment, HR, Project Management and ConstructionManagement will review the project requirements and establish a HR plan to adequately

staff the project, location policies, per diems and personnel availabilities.

Obtaining Suitably Experienced Staff, Subcontractors

Construction provides an input to the Project Manager and the Proposal Manager on

proposed contracting strategies for the Construction phase for opportunity submission.

Proposed strategies should be supported by Contractor capabilities and capacity.Strategies should be justified with preliminary analysis and evaluation of potential

Contractor capabilities, capacity and strengths, for example — constructability, Safety,

modularisation solutions and logistics.

Demobilization

Construction will prepare a demobilization plan typically finalized as 60% of construction

for site, covering the following items as a minimum:

PersonnelVacating the various areas, clean up and restoration of site to its original state

Disposal of excess construction materials, or removal to Customer operations

storage area if applicable

Vacating and removing temporary construction facilities

Settlement of all local supplier and subcontract accounts

Closure of office supply accounts




COMMUNICATION AND TEAM WORK

Project Culture, Trust and Team Work As Project Manager, you must nurture mutual trust that helps to create successful

construction relationships and develop a positive project culture.

You need to be aware that the task of keeping everyone working together harmoniously

on a project, without unnecessary delay or damaging others, is a complex task requiring

high levels of coordination, cooperation, communication and compromise.

Where there is a positive project culture, trust and team work, the result will be a

successful project and rewarding experience for the Project Manager and his team.

Home Office and Site Office Communication andTeamwork

The interface between the Home Office and the Site Office is critical. Some of the keys to

success in this area are:

Ensure the Construction and Completions Manager is included in all key project

meetings

Project meetings to be held on site at regular intervals during the Construction andCompletions phases

Have engineering spend time on the construction site and be located on site to

conduct follow on engineering

Have a well-defined and adequately resourced Field Engineering group to manage

on-site engineering queries linking back to the Home Office

Construction and Completions to be included in project team building sessions.

Contractor Communication and Team WorkTeam relationships are built around striving for a quality project, including the on-time, on-

budget successful completion to the Customer’s satisfaction.

Clear, efficient and effective communication must be nurtured through the project, starting

with the initial contract discussions and team work discussions through to close-out, for

example by using minutes for project meetings.



Page 38 Managing Const ruct ion and Completions Rev 0 04/03/2008

Contractors are involved in the development and implementation of the Company HSE

Management System through:

Regular Contractor HSE Meetings

Attendance of Company personnel at Contractor toolbox meetings

Training and induction of Contractor personnel.

The Project and Construction Managers should encourage the Contractors to be part of

the Project Team as effective communication between all parties is an essential element

to ensure efficient and safe coordination of site work and decision making.

Coordination

Your role as Project Manager is to provide support and guidance to the Construction

Management Team during the construction and completion phases of a project.

As part of this, you as Project Manager need to ensure that regular on-the-job meetings

are held, at least on a monthly basis, such that that there is effective coordination between

the Construction Management Team representatives and on-site Construction

Contractors’ representatives. Minutes of meetings need to be prepared and distributed.

The Construction Management Team and Construction Contractors must organize their

work according to the schedule and to ensure effective coordination. The Construction

Management Team monitors and coordinates the work of all parties to ensure compliance

with the project schedule.

The Project Manager and the Construction Manager shall jointly establish a

comprehensive Site Logistics plan to support all phases of the project.

You as the Project Manager must monitor and expedite the processing of shop drawings,

samples and other submittals for approval. This procedure is especially important when

Change Orders are involved.

When damage or loss occurs, the Construction Manager should report immediately to the

injured party, appropriate insurance carriers, and WorleyParsons senior management;

and corrected promptly.




Cooperation

As Project Manager you should encourage cooperation on the project in order to develop

a positive project culture. This takes time and energy.

For example, ways of fostering cooperation include:

Settling money issues promptly

Submission of progress and final payment applications using the contract’s

established procedure

Ensuring good communications between the Construction Contractor and the

Engineer being facilitated through WorleyParsons

Nurturing relationships being conducted between Construction Management Team

and Construction Contractors’ authorized representatives.

Review Questions

Q19 What are the essential elements of Home and Site office communication?

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

Q20 Describe the cooperation that you as Project Manager should give to the

construction management team.

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________




ISSUE RESOLUTION

The construction industry has become known as one of the most adversarial and prone to

problems, with claims and disputes on construction projects frequently the rule rather than

the exception. Cost overruns and schedule delays can be the subject of expensive andprotracted claims and litigation, and may pose serious risks for all parties to a construction

project; and are actively pursued by Customers, Contractors and Engineers alike.

Litigation is simply too time consuming, costly and acrimonious for construction industry

participants and is to be avoided if at all possible.

Note: Effective consultation and communication between all parties must be an

essential element to ensure efficient and safe coordination of construction work.

If we work on the basis that the successful resolution of a dispute — without recourse to

arbitration, adjudication or litigation and without damaging inter company relationships —

is the most satisfactory and commercially sensible course to adopt wherever possible;then that is the method we have to employ.

Problem

Issues arise on every construction project. Frequently they are ‘saved-up’ for resolution at

some unspecified later time. This almost always has a detrimental effect on the

relationship among the construction participants and consequently, on the progress and

quality of the work.

Action

Project Managers should set up a real-time dispute resolution program at the beginning of

the project. Each project participant (Customer, engineer, construction contractor and

subcontractors) should be required to follow the program for any issue that is not resolved

promptly during the normal progress of work. The program should include a mechanism

whereby senior executives, who are not involved with the day-to-day construction, are

brought in to review the issue and negotiate a resolution based on a business and

practical basis.




QUALITY MANAGEMENT

For an overall picture of quality management, refer to Module 7 Managing Project Quality

<insert link to Module 7.

You as the Project Manager must ensure that the Construction Manager has input into the

Project Quality Plan.

All project personnel and Construction Contractors are responsible for compliance with

the Construction Quality Management Procedure and the Project Assurance Plan Task

Sheet, PAP-9004 in terms of developing a Project Quality Plan.

The Project Quality Plan shall cover as a minimum:

Project procedures

Quality processes used at project levelContinuous improvement

Audit program.

Project personnel are accountable to the Project Manager for all aspects of the Project

Quality Plan. Construction Contractors are accountable to the Construction Manager for

all relevant aspects of the Project Quality Plan.

Quality Inspection will ensure that design requirements are satisfied in the fabrication and

installation process and that an appropriate level of quality is being produced throughout

fabrication and installation.

Depending on the degree of effort required for controlling quality and conformance,

Quality Inspection will include inspections to control some or all of the items as a minimum

in a fabricators yard or on a construction site.

Construction Contractor’s Responsibilities forQuality Control

The Construction Contractor’s quality systems will be audited by the Project Quality

Manager. These may be a full audit with notice given or ‘snapshot’ audits.

The Construction Contractor’s responsibilities for quality include:

Reporting deficiencies which might affect the acceptability of the completed work to

specification or drawing or cause a delay in completion due to rework

Issuing all Non-Conformance Reports and Corrective Action Requests to the

Construction Manager for information and approval of rework/rectification method.

Reflecting the Projects Quality Plan expectations and desired outcomes.




Note: The Supervisor may also issue NCRs and CARs to the Construction Contractor.

Inspection and Test Plans

Each Construction Contractor needs to provide the Inspection and Test Plans (ITPs) or

equivalent documents for each area or logical portion of the works. The aim of the ITP is

to ensure the status of inspection and test is known at all times and to provide

documentary evidence of the satisfactory completion of required tests.

Checklists and Rectif ication of Defects

Checklists provide a verification record of a test or the completion status prior to a non-

reversible step, for example a concrete pour. Construction Contractors are responsiblefor producing detailed checklists

When an inspector finds defects or requirements for rework, they will produce a Defect

List on a template, Defect Rework Notice. The defect notice is issued to the Construction

Contractor, and closed off by signing against each item by both parties once rework is

complete. When this happens, the Construction Contractor should have already raised a

Non-Conformance Report.

Inspection Completion and Punch Listing At agreed milestones or completion of work in a given area a Construction Contractor may

request inspection clearance from the Site Inspector. In this case an Inspection Release

Certificate may be provided by the Project.

A punch list must be attached to the Inspection Release Certificate. The punch list can

only be cleared by the site supervisory team and forms part of the contract quality records.

The punch list indicates the category of the punch list items and dates by which they will

be completed.

Quality Records

Construction Contractors must provide a Manufacturer’s Data Report (MDR) containing

documentary evidence of all inspection and test activities during the execution of the

works. The MDR shows the ‘as-built’ status of the works and will show compliance status

with the relevant codes, standards and specifications.




PROTOCOLS FOR CONSTRUCTION SITE VISITS

The Legalities and Customer requirements need to be addressed and agreed as to who

controls the site with respect to access, inductions and security and needs to be

addressed in the CMP.

Security Plan

WorleyParsons recognizes that security is an important consideration for their employees,

Customers, Contractors, Suppliers, and Surveillance visitors (e.g. regulatory bodies,

Workcare etc) for the success of the project.

Prior to mobilization to the project site, a project specific security plan will have to be

developed for overseeing all project security measures to ensure that an appropriate

security systems and features are established. The plan should be reviewed by

WorleyParsons Executive, Project Management and the Customer before implementation.

There are two (2) types of inductions for site visits;

A brief visitor induction and

A full induction

Visitors

All visitors to the construction site must be escorted by a fully inducted person, a

Construction Team member, a Customer’s representative or a Contractor, throughout the

duration of the visit. Visitors will be required to undergo a brief visitor induction prior to

accessing the site. This is required due to construction activities and safety issues that

may not be known to a visitor.

Visitors who intend to walk the construction site must have the minimum Personal

Protective Equipment (PPE) required by the site and legislation.

Inducted but Infrequent Visits

All personnel that visit the site infrequently, even though they have had a full site

induction, will require a re-orientation session prior to walking the construction site due to

the changing nature of activities and events.

Those personnel who intend to walk the construction site must have the minimum

Personal Protective Equipment (PPE) required by the site and legislation.




Q23 Do Surveillance personnel have free access to the construction site?

__________________________________________________________________________

__________________________________________________________________________ __________________________________________________________________________




HEALTH, SAFETY AND ENVIRONMENT (HSE)

SafetySafety is the number one project concern.

Construction projects are high risk areas and affect the safety of all personnel. Therefore

safety should be an integral part of any and all projects.

Zero Harm

WorleyParsons’ Zero Harm philosophy applies to all projects. It is the responsibility of theconstruction team including the Project Manager to promote safety and ensure

compliance with the Zero Harm philosophy.

Strategies for Promoting Safety

Risk Analysis

Construction risks are analyzed in the project risk assessment and can be summarizedas;

Project Risk Assessment

Construction Risk Assessment

Job Hazard Analysis

The Construction Manager must be part of the Risk Management Workshop.

Refer to Module 3 Managing Project Risk for more detail on the risk assessment process.

Contractor Selection

The principles of safety management for contracts apply regardless of the size of the

contract. These principles include:

Contractor selection, based on commitment and past satisfactory safety

performance




Documentation of an existing health and safety program by the Contractor in the

tendering process

Development of a job specific Occupational Health and Safety and Environment

Management Plan

Conscious effort to avoid hazardous situations by detailed planning and riskassessment.

Refer to HSE Subcontractor Selection and Management Procedure, CHP-0065.

Other Strategies

Strategies for promoting safety include:

Safety in Design

Plans and preparations for emergency conditions

Periodic checks (audit) on actual performance by company Site Management

Quick and firm response in the case of sub-standard safety performance and

commitment

Recognition of outstanding safety performance and commitment

Follow-up on health and safety performance at close-out of contract.

Proactive Involvement of Key Construction Contractors

Contractors are involved in the development and implementation of the company HSE

Management System through regular on site Contractor HSE Meetings

Training and Induction of Contractor Personnel

All employees must be trained to work safely and effectively in accordance with the

approved project HSE procedures.

Site Safety Policies and Procedures

Develop a written safety policy that spells out the commitment to run each project in

a safe manner. The policy must state the intention to comply with national and state

safety laws and regulations.

Production of comprehensive safety material for the use of employers and

employees within the construction industry.

Making available a list of safety equipment, jobsite safety requirements and

prohibited unsafe work habits.




Defined Responsibilit ies and Accountabilities

As project manager, all project personnel and Construction Contractors are accountable

to you for all aspects of the Project Health and Safety Plan. Construction Contractors areaccountable to the Construction Manager for all aspects of the Project Health and Safety

Plan.

Health and Safety Plan

As Project Manager, you should endorse and promote the Project Safety Policy Statement

that is part of the Health and Safety Management Plan.

The project specific Health and Safety Plan must conform to the Customer’s standards

and procedures, government and statutory regulations, and be supplemented byreference to the National Standards, Codes of Practice, Advisory Standards or other

requirements for construction work methods and activities.

Effective consultation and communication between all parties is an essential element to

ensure efficient and safe coordination of site work. A more detailed coverage is in Module

5.

Communication

A positive project culture must be established based on the values of good workingrelationships and clear communication through:

Early analysis of project scope to identify key risk areas

Early involvement of key Construction Contractors

Clear communication of the project safety approach, programs, roles and

responsibilities

HSE / Incident Reporting

Regular job-start meetings

Toolbox Meetings with all construction Contractor personnel

Job Hazard Analysis (JHA), Safe working InstructionsTake 5

Continuous improvement activities

Site notice board




Environment

The Customer and / or WorleyParsons must develop a Project Environmental Plan and

submit it for acceptance by the Customer who will submit it as appropriate to the

government and statutory groups.

As Project Manager, all project personnel are accountable to you for all aspects of the

Project Environmental Plan. Construction Contractors are accountable to the site

Construction Manager for the Project Environmental Plan.

The Project Environmental Plan will cover the following issues:

Vehicle access routes

Spill prevention and clean-up

Fuel and oily waste management

Temporary field office and domestic waste

Topsoil removal

Vegetation clearing

Rehabilitation of disturbed areas

Water disposal

Noise monitoring

Air quality and monitoring including dust issues

Licensing requirements

General waste management at site

Other conditions of license or permit

Protocols for communication and reporting of Environmental events

Impact of Unforeseen Environmental Problems

Environmental hazards can cause serious adverse affects to construction projects. For

example, hazardous waste or other environmental contamination may require specialized

responses that are expensive, time consuming and sometimes risky.

Risks can include:Damage to the Customer if the cost has not been built into the project budget and

therefore will cause the project to exceed its budget

Pressure to resolve the problem quickly and stay on time, may mean that there is

less opportunity to get the most competitive price for the work

Concerns about a lender’s liability or the availability and cost of insurance.

Adverse impact on community




INDUSTRIAL RELATIONS

The purpose of the project’s and site’s Industrial Relations strategy is to plan how to

manage Industrial Relations (IR) during the Define and Execute phases to minimize time

lost due to industrial disputes. Harmonious Industrial Relations are critical to deliveringthe project on budget and within time. Industrial Relations must be managed proactively

by both the Project Manager and the Construction Manager throughout the project

lifecycle.

Each country and location is unique whereby an IR plan may not be necessary. Where

they are, the IR plan needs to reflect the site’s unique demands as well as

WorleyParsons’ global requirements for IR management. The IR strategy is documented

in the project’s IR Plan. The requirements for the IR Plan are set out in the development of

an Industrial Relations Plan Task Sheet, FCP-9003 for the project. The IR Plan is a

component of the Project Execution Plan.

As Project Manager, you are jointly responsible with the Construction Manager for the

development of this plan. Typically, the Industrial Relations Plan development team

consists of:

The Customer

WorleyParsons IR specialists

Project Manager

Construction Manager

Collective Contractors.

Large projects may have a dedicated IR Manager on the project team.

The aim of the IR strategy is to:

Eliminate, wherever possible, the causes of Industrial Relations issues through

careful planning and ongoing consultation with union leaderships

Establish direct and harmonious relationships with our employees and the

employees of Construction Contractors

Have clear and effective disputes resolution procedures which achieve results

without the need for industrial action

Assign experienced supervisors and managers who are trained in the management

of Industrial Relations issues

Maintain a site IR management presence, with experienced corporate support,

which can respond instantly to any Industrial Relations issue which emerges.

The IR Plan must address the following key elements:

The principles and objectives of the plan




The industrial climate in the project’s various locations and sites

The IR strategy for the project as a whole and the various locations and sites

How the IR strategy will be implemented at each location and site

The IR organization for the project and responsibilities

Strategies for maximizing the use of permanent employees.

It is worth emphasizing the fact that a good project HSE culture and track record is a great

support to achieving good Industrial Relations.

Management of Construction Contractor IndustrialRelations

As Project Manager, you must maintain awareness of the importance of managing the

risks associated with Construction Contractors and their employees. You are responsible

for ensuring our Construction Contractors replicate the policies, procedures and principles

contained in our IR approach as part of contractor selection.

At the construction execution phase at sites, this task is administered by the Construction

Manager. However, this does not reduce your accountability for the project’s overall IR

status.

A rigorous review of prospective Construction Contractor’s Industrial Relations practices

and the appropriateness of their industrial instruments, that is — Enterprise Bargaining Agreements (EBAs) are undertaken prior to their engagement. In addition, the

recruitment and retention practices of our Construction Contractors are of particular

interest to ensure maintenance of efficiency and harmony in the workplace.

Construction Contractors may be included in our workplace consultative committees to

ensure all parties are kept abreast of contemporary issues and any potential issues of

dispute.

Review Questions

Q24 Who manages Industrial Relations for a project?

__________________________________________________________________________

__________________________________________________________________________

Q25 What are three aims of an IR strategy?

__________________________________________________________________________




___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

Q26 Who is responsible for ensuring that contractors replicate their IR with the

project’s overall IR Plan?

___________________________________________________________________________

___________________________________________________________________________




RISK MANAGEMENT—CONSTRUCTION

Aligning with Corporate Zero HarmConstruction Managers and Completions Managers participate in all Risk Management

Workshops in order to ensure that all construction and commissioning activity stages are

planned and reviewed. The planning and review process is essential for these activities to

be performed in a safe and timely manner. All activities should be aligned with the

WorleyParsons One Way to Zero Harm philosophy.

Construction Risk

The key elements of construction risk are that projects should be managed in order to:

Maximize Customer satis faction — WorleyParsons’ success depends on a

successful outcome for the Customer. Therefore you should manage projects with a

focus on the Customer, even it the project has a low financial risk, for example is

reimbursable, because an unsuccessful project will result in reputation damage and

loss of future business opportunities.

Minimize risk — you should manage projects to minimize WorleyParsons specific

risks, other than direct client/owner risks, for example:

• Contractual/commercial exposures such as process and performance

guarantees, warranties, liabilities

• Labor Productivity

• Supervisory quality

• Staff availability, morale, competency, retention

• HSE, security

• Intellectual Property (IP) protection

• Business ethics, etc.

Risk / Hazard Control

Construction Managers, following the risk assessment process, determine the control

measures for the hazard by following the hierarchy of control.

The hierarchy of control is the systematic strategy used to control exposure to the hazard.




The controls are ranked in the order of their effectiveness and desirability:

Elimination

Substitution

Engineering

Administration

Personal Protection Equipment.

Construction Managers must manage HSE hazards according to WorleyParsons risk

management procedures and relevant statutory requirements.

Risk Assessment Register Management

The Field Engineer ensures that all construction site risk assessment workshops, required

to execute the project in a safe and timely manner are identified and facilitated.

The outcomes of the risk assessment workshops should be itemized for tracking purposes

on a construction site based Risk Assessment Register and be maintained by the Field

Engineer.

Mitigation Plans

Mitigation Plans include the following items:

Continuous education and training in safety and safety awareness

Strict safety requirements and experienced safety supervision on all sites

Regular safety inspections and audits to verify compliance with the requirements

Requirements of the Construction Safety Case

Requirements of Operational Safety Case

Permit to Work System (requires Permit Holders)

Excavation requirements and permits on Brownfield projects

All works will be executed under an approved Work Instruction

Construction HAZID Workshops and Risk Analysis Workshops

Customer presence required for all tie-ins and for shutdowns.

Close interaction between the construction and commissioning phases to ensure a

smooth transition between the phases.




Site requisitions are utilised for: Services not covered by sub-contracts, small tools and

equipment (as required), maintaining stock levels of consumables, office furniture,

equipment and supplies, services of outside agency personnel, emergency shortfall items

required for construction. The site requisitioning system may be addressed in

Procurement Management Plan, however, requires reconfirmation prior to setting up site

facilities.

The specific program for site purchasing will be specified by the Procurement Group and

will be established based on each project's specific requirements. Refer to Site

Purchasing Procedure, FCP-0018.

MARIAN

MARIAN is WorleyParsons preferred tool for Materials Management and for information

as to how it is administered on construction sites, refer to Module 9; Managing ProjectProcurement.

Materials Management

Materials management includes:

Inspection and expediting

Materials receipt, including quality control and inspection, identification and

resolution of deviations, item identity and tagging, and quarantine

Warehousing, including storage areas (may be central and/or satellite areas),facilities, handling equipment

Issue control

Material reconciliation

Surplus – identification, disposal options

HSE – personal safety, handling of hazardous goods, environmental considerations

Storage, packing and preservation requirements.

WorleyParsons includes procurement services depending on the contract arrangements

with the Customer. Refer to Module 9; Managing Project Procurement.

Procurement services are delivered using the materials management system, MARIAN

which generates a range of reports for monitoring procurement progress.




Third-party Suppliers and Their Subcontractors

WorleyParsons cannot deliver a project successfully without the cooperation of competent

Construction Contractors.

Managing Site Contracts

The Construction Management Team under the direction of the Construction Manager

provides the direction and coordination of contractors’ work in progress while they are

performing their contractual obligations. Refer to Contract Management Module for further

clarification.

The Contract Administrator or his designate will manage a Contractors progress, claims,

and any other contractual concern of the Contractor other than the day to day installation

supervision which is managed by construction supervision. Depending on the size of the

project this can either be a Construction Superintendent or a Supervisor.

Refer to procedures and workflow diagrams associated with tender and award of

contracts, for example — reporting, schedules, mobilisation plan, correspondence

protocols.

As a minimum progress is monitored for compliance with HSE, quality procedures and

plans, scope of work and schedule.

Refer to:Construction Progress Control Procedure, FCP-0007

Direction and Monitoring of Contractor Performance Procedure, FCP-0012

Guidelines: Contracts, Changes, Claims & Backcharges (incl. Liquidated

Damages), PSP-0346

It is critical that the reporting requirements for our Contractors are clearly thought out and

specified in our tender documents, so that they become a contractual commitment post

award. It is difficult getting compliance if we only stipulate our requirements post-award.

The Project Manager has an important role ensuring that this occurs.

Vendor Representations

Construction and Completions will continuously interface with Engineering and

Procurement in the Engineering Office to establish and agree timing and durations for

Vendor Representatives.




The site based Contracts Manager will mobilize Vendor Representatives when presented

with a request form from the relevant supervisor and approved by a Field Engineer.

Refer to Supplier Callout Instruction Template, FCF-1026.

Contracts Placed by the Customer

Historically a Customer may use an incumbent contractor(s) to perform a construction

function. These Contractors are normally contracted to perform a function on an

operational site as they are familiar with the Customers specifications and safety

requirements; are inducted into the numerous and different areas of the operational plant

and have performed to a satisfactory level of compliance.

If a Customer has strong convictions that an incumbent Contractor(s) be awarded specific

contracts within an overall EPCM contract arrangement with WorleyParsons, anagreement of understanding will have to be initiated and agreed that instructs the

incumbent contractor(s) that they will only have one line of communication and that the

Customer relinquishes this to WorleyParsons for the entire duration of the new

construction contract and that all decisions by WorleyParsons in the management of this

contract will be final.

Refer to Module 3; Managing Project Risk

Review Questions

Q27 Provide four contract types.

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________




Q28 Name three key activities that the construction team must perform to confirm a

contractor’s contract obligations so that accurate reporting to the Project

Manager can be maintained on a regular basis.

__________________________________________________________________________

__________________________________________________________________________

Q29 What must a Customer relinquish if he insists that an incumbent contractor be

utilized?

__________________________________________________________________________

__________________________________________________________________________




CONSTRUCTION CONTROL AND REPORTING

Construction Progress Measurement and ControlConstruction progress control is governed by:

Progress Measurement Construction Guideline, PCP-0005,

Site Based Contract Administration Procedure, FCP0011

Construction Progress Control Procedure, FCP-0007.

Construction progress control primarily relates to:

Construction progress against the budget and schedule

Contractor reporting of all contracts involving works at a construction site.Contractors are required to measure progress and issue Progress Reports for their

respective scope of work in accordance with the terms and conditions set out in their

contracts.

On an EPCM style project, this Contractor supplied progress information is then rolled up

by WorleyParsons to provide overall progress. Therefore it is important that we stipulate

our reporting requirements including the format and Work Breakdown Structure (WBS) at

the Tender stage.

The task of measuring and controlling construction progress is usually delegated to the

site Construction Contracts Manager and Project Controller. The Construction Contracts

Manager and Project Controller report to the Construction Manager, who consolidatestheir reports into an overall report for the Project Manager.

Measurement Tools and Methodologies

Construction KPIs

Some of the relevant KPIs include:

Meet project health and safety requirements

Meet project schedule

Meet project budget

Meet project quality objectives

Minimize environmental impact during construction

Minimize inconvenience to local community and landowners




Meets the Customers expectations.

Construction Progress

Fabrication and construction progress is determined based on the measurement of

physical quantity of work done. Progress is assessed against each category of work (for

example, cubic meters (yards) of concrete, tones (tons) of steel erected, equipment items

installed, etc).

The tools and methods for measuring and assessing Construction progress are set out in

detail in Progress Measurement Construction Guideline, PCP-0005.

Construction Forecasts A forecasting and trending process shall be implemented that will provide continuousreview, re-estimating and re-forecasting, with a predictable project total cost and scheduleoutcome at each reporting cut-off.

A baseline project schedule should be used to monitor the project. The project scheduleshould be updated weekly and formally issued to the Customer on a monthly basis withthe monthly report. Critical Paths will be incorporated in every Weekly Report.

Contractor Performance Measurement

The project will be controlled by the comparison of project parameters against baseline

key performance indicators. The Key Performance Indicators (KPIs) shall take intoconsideration project-wide issues such as cost, schedule, safety, quality, technology and

disruption to existing Customer facilities.

Control of the project against baseline KPIs will ensure effective planning and recovery

plans can be implemented where and when required. Construction progress is reported

at the facility and contract levels and can be rolled up to project level.

The actual labor hours spent by task will be entered weekly by each contractor’s

supervisor. Earned hours by task will be calculated by the actual progress achieved, or

completeness of the task. Alternatively, progress can be measured on quantity installed

(miscellaneous units of measurement), and labor man-hours can be recorded for healthand safety statistical measurement purposes.

Construction performance against the budget shall be monitored by comparing actual vs

earned hours.




It is imperative that the Project Manager ensures that:

We clearly establish our contractor reporting requirements (frequency, content of

reports etc)

These requirements are included in our Invitation to Bid in awarded contracts.

Construction Reports

Report Format

The format of construction reports must be in accordance with the Construction Reporting

Format Agreement agreed to and accepted by both the Project Manager and the

Customer.

Construction reports need to tie progress to Work Breakdown Structure (WBS) by area,

facility, tie-in and discipline i.e. Civil, Structural, Piping, Mechanical, Electrical &

Instrumentation, Architectural, Landscaping, HVAC, Fire Fighting Systems, etc.

Construction Site Reports

The Construction Manager is responsible for producing weekly and monthly progress

reports for submission to the Project Manager and the Customer.

The reports address the following items in summary format for the weekly reports and in

detail for the monthly report:

Safety Incidents, near misses and hazard identification

Progress, summary of activities, key deliveries at site

Details about these reports are listed in the Progress Measurement Construction

Guideline, PCP-0005.

Numbers of personnel on site, broken down by Construction Contractor and

construction work, and supplier and material and equipment

Areas of concern

Contractual issues, variations, site instructions raised

Other as agreed.




Project Meeting

Construction Project Meetings

Construction site meetings with Contractors should be held weekly, and at a regular time.

Meetings twice a week may be appropriate on shorter duration projects. The first meeting

should be held within two weeks of mobilization.

The Project Manager should attend the Construction site meetings on a monthly basis or

as agreed in the CMP.

An agenda should be prepared for each meeting. The meetings must be documented and

recorded. Refer to Contractor Progress Meeting Minutes Template, FCF-1010.

The minutes will be issued to the attendees, Project Manager and others by theconstruction secretary.

Review Questions

Q30 What are the two key progress and measurement reporting requirements for

construction?

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

Q31 Describe how construction progress forecasts are measured?

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

Q32 How is contractor performance measured?

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________




___________________________________________________________________________

Q33 What items typically make up the weekly and monthly report?

___________________________________________________________________________ ___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________




DOCUMENT MANAGEMENT

Controlled DocumentsControlled documents for a project include:

Specific constructability checklist

Construction Management Plan

HSE Management Plan

Environmental Management Plan

Drawings.

Document Control Procedure for the ConstructionSite

The Manage Site Documentation Procedure, FCP-0009, is the procedure for Document

Control at the construction site which covers receipt, issue, transmittal and recording of all

drawings, specifications and other documents relating to the project. This includes

documents issued to or received from Contractors. Documents transfer between

Contractors must be transmitted via site or project office Document Controller in

accordance with the Document Control Plan.

The documents must be uniquely numbered and registered in accordance with the

protocols set out in the Document Control plan. Version control must be maintained. The

site’s Document Controller is responsible for document management and control at the

site.

These systems are essential to the construction teams in the field, working to the latest

AFC drawings, specifications etc.

Document Review and Sign-offNo document may be issued or transmitted until it is reviewed and signed-off in

accordance with the protocols set out in the Document Control Plan.




Document and Drawing Libraries

A document and drawing library needs to be maintained at the Construction site office.

Document Control Registers

Registers must be maintained for all drawings, documents and correspondence issued

from, received at or transmitted through a construction site or project office.




COMPLETIONS—COMMISSIONING ANDTURNOVER TO THE CUSTOMER

Pre-commissioning

What was referred to historically as pre-commissioning is now referred to as

Commissioning Stage 1.

Commissioning

Commissioning has four stages as described in this section.

Commissioning Stage 1 — Mechanical Completion

Commissioning Stage 1 (Mechanical Completion) testing is driven by pre-qualified pro-

forma test sheets (“A” Check Sheets), derived from the electronic Completions

Management Tool (CMT). All work will be completed by system or sub-system sequence

previously identified and included in the construction schedule

Features of this phase will include:

Single discipline activity.

Static or un-energized checking of equipment and components to ensure

specification compliance and correct installation.

Includes device installation checks.

Calibration checks.

Includes cable insulation and continuity checks.

Includes motor rotation checks using rotation instruments

Piping hydro-testing (usually completed in the fabrication yard) and flushing.

Leak testing.

Bolt up and torqueing verification (usually in conjunction with QA Inspection).

Preparation of site teams for introduction of power and upcoming live plant testing.

First fill lubrication of equipment

Alignment checking

Preservation and warehousing.

Acceptance of Red line As Built Documents.

Inspection, agreement of the Mechanical Completion Punch List.




Entry of all punch list items into CMT.

Preparation and sign-off of the Commissioning Stage 1 Completion Certificate and

Punch Lists.

Attainment of completion of Commissioning Stage 1 marks the point where the whole orpart of the facility is ready for Commissioning stage 2 (function testing).

Commissioning Stage 2 — Function Testing

Commissioning Stage 2 (Function Testing) is the transformation from static testing to livetesting and is the verification that all items of equipment and loops are functional andready for system commissioning. It is generally a single discipline activity, carried out byenergizing tagged items (device by device). Commissioning Stage 2 (Function Testing)also sees the transformation from single discipline to multi discipline testing.

Commissioning Stage 2 function testing is driven by pre-qualified pro-forma test sheets(“B” Check Sheets), derived from CMT. Project/equipment specific guidelines may beproduced to enhance the generic type check sheets as required.

All work will be completed by system or sub-system previously identified and included inthe completions schedule. Some work may be completed by area/geographical location.Suppliers and other specialists may be called in to assist as necessary.

The Completions Permit to Work (PTW) system (generally the Operators PTW) comesinto place during Commissioning Stage 2 (Function Testing).

Features of this phase of activity will include:

Single discipline activity.

Energized function testing.

Completions phase Permit to Work system is in place.

Inspection and agreement of the Stage 2 Punch List.


Commissioning Stage 3 — System Commissioning

Stage 3 Commissioning (system commissioning) is driven by purpose developed

completions test procedures (CTP’s). All work will be completed by system or sub-system

previously identified and included in the completions schedule.

During Stage 3 the completions team will control and manage the work to documentation

previously developed by them. Suppliers and other specialists may be called in to assist

as necessary. Operations participation in these activities is now mandatory.




Stage 3 commissioning is the preparation of systems for introduction of product and

preparation for start up. It is a multi discipline activity, and includes the completion and

turnover of utility systems (water, power, air etc).

Customer Operations participation in these activities is now mandatory


Transformation from static checking to live testing

Dynamic testing of complete systems and sub systems

Completions and placing into service the utility systems.

Confirmation that systems are ready to start up or accept product

Inspection and agreement of the Stage 3 Punch List

A Pre-Start Safety Review (PSSR)


Commissioning Stage 4 — Start-up and Ramp-up

Stage 4 commissioning (start-up and ramp-up) is driven by purpose developed

operational test procedures (OTP’s). All work will be completed by system or area

previously identified and included in the completions schedule.

During Stage 4 the completions team will control and manage the work to documentation

previously developed by them. Suppliers and other specialists may be called in to assist

as necessary.

Stage 4 start up and ramp up is the introduction of product, start up and steady, controlled

ramp up to first time operation. It is a multi discipline and multi system activity culminating

in the practical completion of the completions work scope and turnover of the facilities to

the Operator.


Introduction of product (or inert medium, followed by product).

Start up and ramp up to operating operational status.

Inspection and agreement of the Stage 4 Punch List.Entry of all punch list items into CMT.

Turnover of process systems.




Operation and Performance Testing

Operation and performance testing is an Operational activity with support from the

completions team and specific suppliers (as required). It involves operation of the

facilities and carrying out defined tests and activities to demonstrate the facilities meet thecontract and design parameters.


Conduct prescribed performance demonstrations.

Conduct Operations HAZID.

Preparation and sign-off of the Performance Test Certificate.

Interim Turnover to the Customer

The activities in the formal turning over systems to the Customer and Operator at the

conclusion of Commissioning include:

A systems turnover meeting for each portion of the plant and systems turned over to

the operator.

There may need to be several meetings if there is a progressive turn over of

sections of a system or facility.

Interim Facilities Turnover

Interim Facilities Turnover is the formal turning over the facilities to the Customer and

Operator at the conclusion of all commissioning activities.

Interim Facilities turnover can be conducted for portions, or all, of the plant and can be

undertaken before formal close out of the Project. Interim Facilities turnover is the

process of operations accepting the management of the facilities for operational purposes

and included a formal acceptance, an agreement of outstanding works and the provision

of adequate interim documentation and data to enable effective operation and

maintenance of the facilities

Interim Facilities Turnover Features

Organize the Facilities Interim Turnover Meeting(s). There may be several meetings as it

may be prudent to that progressively turn over portions of the facility as they become

operational (e.g. power station, potable water distribution systems, compressed air

systems, fuel storage system etc).




Preparation of an outstanding works list shall be tabled at the Facilities Interim Turnover

Meeting. This list will comprise the outstanding items from the Completions Stage 4

Punch List, the Operation & Performance Testing Punch List and any other outstanding

project activity that could impact the safe operation of the plant (or portion of plant being

turned over)..

Finalize and issue the completions dossier. If the plant is turned over is portions, there

would be several dossiers.

Ensure the completions dossier(s) contains the documentation and references agreed

with the Client and Operator during the BOD, FEED and Engineering Phases.

Commissioning and Interim Turnover Documentation

The commissioning and turnover documentation includes:Interim Facilities Turn Over Minutes of Meetings (MOM’s)

Interim Facilities Turn Over Certificates

Interim Facilities Turn Over Punch List

Commissioning Dossier

Outstanding Works Plan

Site Administration Records and Reports

Deliverables as per Commissioning Execution Plan.

Completions Management Tool (CMT)

An electronic completions management tool (electronic system) is a key factor for

efficient, effective and successful management of the mechanical completion and function

testing activities and the interfaces between the various stages.

The CMT and Completions Coordinator must be identified during the BOD phase and

implemented during the FEED phase to enable the input data to be effectively defined and

collected from the engineers, designers and suppliers. WorleyParsons Corporate Model

is the preferred CMT.

The selection of the CMT will be dependent upon the size and complexity of the project

and whether the Client has a preference (e.g. a specific tool nominated in the contract).




The following CMT issues are important and need to be addressed:

The CMT must be committed as early as possible (preferably during the BOD

phase)

The Completions Coordinator who will be responsible for the CMT during the lifetime

of the Project, must be also identified and committed as early as possible (preferablyduring the BOD phase)

CMT is critical to efficient management and monitoring of the planned construction

to completions turnovers

CMT assists the development of a well defined agreement on

construction/completions planning and schedule interfaces

CMT must be populated during FEED and data input finalized in the Detail

Engineering phases

CMT provides an effective management of the ‘dead’ to ‘live’ transition of the site

CMT controls the Completion Milestone Punch Lists.

Review Questions

Q34 Name the four stages of Commissioning.

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

Q35 What is the definition of Facilities Turnover?

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

Q36 When will the Completions Management Tool (CMT) be addressed within a

project?

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________




CHANGE MANAGEMENT

OverviewWhile change is inevitable on projects, the effective management of change is critical to a

project’s success. There are a range of project processes and procedures that assist in

managing change.

While all team members are responsible for contributing to these processes where

appropriate, the Project Manager has ultimate responsibility for ensuring that:

Approved procedures are in place and personnel are aware and trained in them

There is compliance to these procedures

The Construction and Completions Teams are integrated into the Management ofChange process.

Key Procedures for Construction

For a detailed explanation of the company’s management of change processes, refer to

Module 2 Project Controls and Commercial Management.

All key functional groups, such as Engineering, Procurement and Construction, have

procedures relevant to managing change in their respective areas. The proceduresparticularly relevant to Construction and Completions are:

Management of Project Change Procedure, PCP-0010.

The procedure is the overarching procedure for managing any changes on a project

that will have a key cost, schedule or contractual impact.

If a construction-related change occurs, that will have an impact on cost or schedule

beyond what has been budgeted, then this procedure and the associated Project

Variance Form (PVN) should be used to flag the change.

If the change has a potential influence on our Contract cost budget or schedule, then

the PVN is converted into a Project Change Request (PCR) for issue to the

Customer for approval.




Site Query & Field Change Procedure, FCP-0016.

Change on the construction site is often initiated as a result of a need to clarify the

intent of drawings, specifications, or materials supplied by other functional groups

such as Engineering and Procurement.

These queries are processed through the Field Engineer in accordance with the Site

Queries Procedure and the associated Site Query Form, FCP-1042.

Site Based Contract Administration Procedure, FCP-0011.

This procedure addresses general contract administration but it also specifies that

sometimes there is a need to issue site instructions to on-site Contractors. These

instructions often address clarifications or changes in scope and they are to be

advised using the Field Instruction Form, PSF-0069.

These completed and approved forms constitute a record which, in time, mightbecome the basis for Contract variation claims by the Contractor against

WorleyParsons and/or the Customer in accordance with the appropriate

Procurement procedures.




Appendix A

Glossary




Term Definition

MDR Manufacturers Data Report

MOPC Management of Project Change

NCR Non-conformance Report

OTP Operational Test Procedure

PCR Project Change Request

PEP Project Execution Plan

PPE Personal Protective Equipment

Practical Completion When you have agreement with the Customer that all contractualrequirements have been satisfied in accordance with the contract andWorleyParsons may proceed with project close-out activities.

PVN Project Variance Form

QA Quality Assurance

QC Quality Control

Skid Where a number of pieces of equipment are assembled onto a commonsteel frame, this is known as a ‘skid’ and is shipped as a complete builtup unit. For example a skid could comprise of a pump, a motor, a lube oilsystem etc where all of the components are connected, pre-wired andpiped.

SOW Scope of Work

SO Site Query

Stick-build Stick-built construction refers to the building method where

the entire project is built at the job site piece by piece. Stickbuilt construction builds outside on the ground in all types ofweather and has to work with material purchased for theconstruction activities

Subcontract A document, legally executed between a contracted party and a third-party for provision of services by that third-party to perform any sub-element of the services covered under the Contract.




Term Definition

Subcontractor The third party named as such in the Subcontract – performing the Work.

Third-party Services Third-party services include, but are not limited to, data storage and data

processing services, hardware/software vendors, business consultantsand security personnel. Third party services also include the types ofservices that cannot be provided internally such as Internet serviceproviders and worldwide network connectivity.

Witness Point Project Inspection presence at the test is required. The ConstructionContractor may proceed past the point provided the agreed notice of testwas given and project elects not to be present at the time of test.

WBS Work Breakdown Structure

WPMP WorleyParsons Project Management Process




Appendix B

References




Appendix B References

FCP-0003 Constructability Input Procedure

FCP-0056 Constructability Guideline

FCP-9001 Construction Management Plan Task Sheet

FCP-0002 Construction Preliminary Planning Procedure

FCP-0007 Construction Progress Control Procedure

FCF-1010 Contractor Progress Meeting Minutes Template

FCP-0004 Detailed Construction Planning Procedure

FCP-0012 Direction and Monitoring of Contractor Performance Procedure

PSF-0069 Field Instruction Form

PSP-0346 Guideline: Contract, Changes, Claims & Backcharges (incl.Liquidated Damages)

CHP-0065 HSE Subcontractor Selection and Management Procedure

FCP-9003 Industrial Relations Plan Task Sheet

PCP-0010 Management of Project Change Procedure

SCP-9003 Progress Measurement and Reporting Task Sheet

PCP-0005 Progress Measurement Construction Guideline

PAP-9004 Project Assurance Plan Task Sheet

FCP-0011 Site Based Contract Administration Procedure

FCP-0005 Site Establishment Procedure

FCP-0016 Site Query & Field Change Procedure

FCF-1026 Supplier Call Out Instruction Template

FCF-1042 Site Query Form

FCP-0018 Site Purchasing Procedure

FCP-0009 Manage Site Documentation Procedure




Appendix C

Types ofConstruction Contracts




Appendix C Types of Construction Contracts

Fixed price contracts

Type Requirement Risk Customer Administ rat ion

Lump Sum • 90% complete technical documents

• Known physical conditions

• 1 year or shorter schedule

• 90% of Customer furnished items onsite prior to need

Contractor, Average

Customer, Low

Average

Unit price • 95% typical construction details

• General scope clear• 1 year or shorter schedule

Contractor, Average

Customer, Average

Average

Note: Combinations of the above fixed price contracts may be the best option to

minimize Customer risk. Escalation factors may be applied if schedule is longer

than one year approximately.

Type of contract Advantage Risk Customer Administration

Fixed Price

Lump sum and/orunit price

• Customer knows in advance what

the job will cost.

• Customer is able to moreeffectively finance the project.

• Customer expends less toadminister the contract.

• Insures Contractor will maximizeefficiency.

• Promotes adherence to thecontract schedule

• Almost entire scope of work and the

physical conditions must be known beforethe contract may be bid.

• Contractor may attempt to cut corners tosave money, thus producing an inferior job.

• Delay of contract schedule may result inclaims.

• Customer may not get a trueunderstanding of what the actual costsare.

• For unit price contracts, an accurateaccounting of the quantities will have to beestablished.




Cost plus

% of cost

• Requires Contractor to reveal theirtrue costs, giving Customer bettercost records

• Allows for an early start of work,before entire scope is known

• Gives the Contractor no reason tocut corners to keep their costsdown, thus producing a better job

• No incentive for Contractor to maximizeefficiency

• Requires stricter Customer supervision

• Requires Customer to make decisions asto which costs are valid

• No incentive for Contractor to finish onschedule (i.e. may try to keep their menand equipment as cost to Customer bystretching out job)

Cost plus

Fixed fee


• No reason for the Contractor to useinferior materials and equipment tosave money

• Makes it advantageous for the

Contractor to proceed as quickly aspossible in order to free their menand equipment for other jobs, if hehas other jobs scheduled

• No incentive to inflate costsunnecessarily

• No incentive for Contractor to maximizeefficiency



• No incentive for Contractor to finish onschedule (i.e. may try to keep their menand equipment as cost to Customer bystretching out job) if he has no other jobscheduled

• Requires a more well— defined scope ofwork at the time the Contract is bid ornegotiated

Cost plus

Fixed fee withceiling price


• Promotes maximum efficiency

• Promotes adherence to schedule

• No incentive to inflate costsunnecessarily

• If overruns do occur, the additionalcost will be shared with theContractor



• Requires a more well— defined scope ofwork at the time the Contract is bid or

negotiated• May promote “cutting corners” by the

Contractor to increase their bonus*, thusproducing an inferior job

• * or decrease their penalty

• If the Contractor is paying a penalty, hemay stop paying their subcontractors, whoin turn may apply pressure on theCustomer




Cost-plus fee contracts

Type Requirement Risk Customer Administ rat ion

Cost pluspercentage ofcost

•

Basic outline and time frame• 30% drawings

Contractor, Low

Customer, High.

Heavy

Cost plus

Fixed fee

• Basic outline and estimated quantities

• Clear schedule range

• 30% drawings

Contractor, Low to Average

Customer, Average toHigh

Heavy

Cost plus

Incentive fee

Bonus

Bonus/penalty

Maximum cost

• Detailed outline

• 60% drawings

• Fixed schedule

Contractor, Average

Customer, Average

Heavy

Note: Cost-plus fee contract types are possible. Target man-hour type falls into third

category.

Comparison of contracts

The main differences in format between the lump sum/unit price and cost-plus fee typecontracts are as follows:

Pricing Section

• Fixed Price

All individual prices for material and installation items are included.

Combination of prices equals total value of contract.

• Cost-plus Fee

Details of what comprises direct costs and what is included in the fee are

explained. Restrictions on total costs and bonus/penalties are included.Changes to the fee or bonus/penalty point due to changed requirements are

explained.




Terms and Conditions

• Fixed Price

Provisions for extra work based on unit prices, lump sum, and cost plus feemethod are included. A paragraph stating that estimated quantities have no

bearing on the value of work installed or that the unit prices will be modified if

quantities vary by more than 20% is also included.

• Cost-plus Fee

References to Contract Price, Extra Work and Estimated Quantities are not

required.




Appendix D

Answers to Review Questions




Appendix D Answers to Review Questions

Answers to Review Quest ions

Q1 What are two objectives that you will expect to be satisfied at the completion of

this module?

1. A basis understanding of what construction and completions functions provide to the

complete EPCM project.

2. An understanding of the methodologies and tools that will enable you to work with

Construction to successfully deliver a project.

Q2 Name four things that you will be able to do at the completion of this module.

1. Understand the reasons for requiring Construction and Completions involvement early in

project planning.2. Plan and incorporate constructability reviews and construction lessons learnt into project

design and contracting.

3. Address design strategy opportunities for design standardization, modularization and pre-

assembly.

4. Understand a typical Construction and Completions organization charts and associated roles

and responsibilities.

5. Have a basic understanding of the key processes used by Construction and Completions.

6. Understand the needs of Construction, including AFC drawings and materials being

available on time, and how this determines Engineering and Procurement priorities.

7. Have a basic understanding of the typical progress reporting provided by Construction and

Completions.

8. Have a basic understanding of Industrial Relations (IR) requirements.

Q3 Briefly describe, a) Construction, and b) Completions.

Construction is the building, fabrication or assembly of any infrastructure on a site or sites and

Completions is a generic term that describes the preparation for and management of the final

stages of a project. During completions, the new or upgraded plant and equipment is tested,

commissioned and placed into service.

Q4 Provide at least three of the common responsibilities of the construction

manager.

1. Construction planning, 2. Cost management and time management, 3. Quality management,4. Safety management, 5. Construction management, 6. Contract administration, 7. Industrial

relations.

Q5 How would you describe the single most accountable role of the Construction

Manager on the site?

Single point of accountability for the delivery of the construction scope of work.




Q6 Is the construction manager the sole person responsible for Industrial Relations

on a project?

No! The responsibilities lie with the Project Manager, Construction Manager and the Human

Resources/Industrial Relations Manager.

Q7 Who is ultimately responsible for construction and project delivery?

Project Manager.

Q8 Name five key deliverables that the schedule gives to the project team.

1. A logic linked activity schedule.

2. A critical path method analysis.

3. Resources curves.

4. S curve for performance evaluation (planned vs actual).

5. Key milestones.

6. Established baseline dates.

Q9 What must the Construction Team ensure exists before construction

commences?

Minimum sufficient for 120 days of field activities.

Q10 What things determine construction methodology and what are the differences in

associated risks?

Brownfield (on-shore and off-shore)—operational needs; additional safety concerns; tie-ins of

piping/electrical/instruments/controls/equipment and commissioning activities; restricted

construction access.

Greenfield (on-shore and off-shore)—no operational interference during installation; lesslayout restrictions, etc.




Q11 Name three typical elements that make up the Construction Management Plan

(CMP).

1. Incorporating constructability reviews and construction lessons learnt into design.

2. Ensuring the design strategy address opportunities for standardization, modularization and

pre-assembly.

3. Detailing scope, work packages, schedule, budget estimate and resourcing—required as

part of the overall project plan.

4. Identifying contracting strategies.

5. Construction method statements (principles) which will be developed and expanded to form

workpack content.

6. Defining construction organization structure and responsibilities.

7. Identifying contracting strategies.

8. Identifying Customer approval requirements.

9. Construction procedures/methods.

10. Ensuring appropriate controls are in place to manage safety, environment, quality, cost,

schedule, community relations and documentation.

11. Site layout including temporary facilities, materials storage, laydown areas, parking securityetc.

Q12 At what phases of a project process are constructability reviews conducted?

1. Identify.

2. Evaluate.

3. Define.

4. Execute.

Note: There may also be a case where constructability may be required during the Operate

phase as maintenance is part of our OneWay Element 4 – Field Execution which identifies that

we build constructability into all our deliverables.

Q13 At what typical percentage completions should constructability formally be

conducted during the detailed design phase?

10-20% plus 50-60%

Q14 Does the frequency rate for construct differ between Greenfield and Brownfield

projects and for what reasons?

Yes! Due to Brownfield complexity, that is tie-ins, permits, access and congestion.

Q15 Who in your opinion would be best suited to participate in constructability

reviews?Preferably all of the following: Project Manager, Project Engineer, Construction Manager, Lead

Design Engineers, Safety Manager, Quality Manager, Procurement/Contract Manager,

Customer (as required), Contractor (as required).




Q16 What determines whether Modularization or Pre-assembly is better suited as a

method of construction?

1. The bulk of the fabrication and assembly are performed at external facilities, which allows

work to be performed under controlled working conditions.

2. By reducing fieldwork, it minimizes the project’s impact on the Customer site, a significant

advantage when the installation site is an operating plant.

3. Modular construction minimizes lay-down space, an important benefit when the field site is

small or congested, and reduces delays due to adverse weather.

Q17 What are the factors that determine the make-up of a construction management

team or a completions team?

1. Size and complexity of the job.

2. Construction and contracting strategies adopted for the project.

Q18 Who is responsible for developing the proposed construction team numbers, and

which organization then proceeds to resource?

Project Manager, Construction Manager, Human Resources (HR).

Q19 What are the essential elements of Home and Site office communication?

1. Include the Construction Manager in key project meetings.

2. Ensure project meetings are randomly conducted on the construction site.

3. Ensure adequate resourcing of field engineers.

4. Include construction in project team building sessions.

Q20 Describe the support that you as Project Manager must give to the construction

site.

1. Support and guidance to the construction team.

2. Ensure on site meetings held between the construction team and contractors.

3. Encourage cooperation in all aspects of the project including with construction.

Q21 Do site visitors have free access to the construction site?

No. All visitors to the construction site must be escorted during the visit and will have to

undergo a brief visitor induction prior to accessing the site.

Q22 Do infrequent visitors, who have been inducted, have free access to the

construction site?

No (and Yes). All personnel that visit the site infrequently, though inducted, will require a re-

orientation session <prior to the freedom of walking the construction site> due to the changing

nature of activities and events.

Q23 Do surveillance personnel have free access to the construction site?

No. They will be escorted 100% of their time on the site and will be restricted to areas as

nominated by the Construction Manager. They will not be inducted.




Q24 Who manages Industrial Relations for a project?

The Project Manager and the Construction Manager.

Q25 What are three aims of an IR strategy?

1. Eliminate, wherever possible, the causes of Industrial Relations issues through carefulplanning and ongoing consultation with union leaderships.

2. Establish direct and harmonious relationships with our employees and the employees of

Construction Contractors.

3. Have clear and effective disputes resolution procedures which achieve results without the

need for industrial action.

4. Assign experienced supervisors and managers who are trained in the management of

Industrial Relations issues.

5. Maintain a site IR management presence, with experienced corporate support, which can

respond instantly to any Industrial Relations issue which emerges.

Q26 Who is responsible for ensuring that contractors replicate their IR with the

projects?

The Project Manager, supported by the Construction Manager.

Q27 Provide four contract types.

1. Lump sum (pay a fixed amount to the Contractor(s) for the scope.

2. Reimbursable (pay agreed rates for Contractor’s labor, materials etc.

3. Cost plus fixed fee (reimburse Contractor for actual cost of labor and materials plus a fixed

fee/profit.

4. Unit rate (pay a f ixed amount for a unit of work—for example, $ / ton, $ / foot etc.

5. Mixed strategy (one example is using reimbursable for engineering work and lump sum for

construction).6. Day work (contract labor assigned with scope of work and direction provided by Customer).

7. Incentive based (incentives may be used for any kind of contract).

Q28 Name three key activities that the construction team must perform to confirm a

contractor’s contract obligations so that accurate reporting to the Project

Manager can be maintained on a regular basis.

1. Quality.

2. Plans.

3. Scope of work.

4. Schedule.

5. HSE.

Q29 What must a Customer relinquish if he insists that an incumbent contractor be

utilized?

Control of the contractor for the duration of the construction contract.




Q30 What is the progress and measurement reporting regime for construction?

Construction progress against the budget and schedule and Contractor reporting of all

contracts involving works at a construction site

Q31 How are construction forecasts measured? A forecasting and trending process should be implemented that will provide continuous review,

re-estimating and re-forecasting, with a predictable project total cost and schedule outcome at

each reporting cut-off.

A baseline project schedule should be used to monitor the project. The project schedule

should be updated weekly and formally issued to the Customer on a monthly basis with the

monthly report. Critical Paths should be incorporated in every Weekly Report.

Q32 How is contractor performance measured?

The project will be controlled by the comparison of project parameters against baseline key

performance indicators. The Key Performance Indicators (KPIs) take into consideration

project-wide issues such as cost, schedule, safety, quality, technology and disruption toexisting Customer facilities. Construction performance against the budget should be monitored

by comparing actual vs earned hours.

Q33 What items typically make up the weekly and monthly report?

1. Safety Incidents, near misses and hazard identification.

2. Progress, summary of activities, key deliveries at site.

3. Details about these reports are listed in the Progress Measurement Construction Guideline

(PCP-0005).

4. Numbers of personnel on site, broken down by Construction Contractor and construction

work, and supplier and material and equipment.

5. Areas of concern.6. Contractual issues, variations, site instructions raised.

7. Other as agreed.

Q34 Name the four stages of Commissioning.

1. Construction Verification.

2. Function Testing.

3. System Commissioning.

4. Start-up and Ramp-up.

Q35 What is the definition of Facilities Turnover?

Facilities Turnover is the formal turning over the facilities to the Client and Operator at the

conclusion of all commissioning activities.

Facilities Turnover is the process of operations accepting the management of the facilities for

operational purposes and included a formal acceptance, an agreement of outstanding works

and the provision of adequate interim documentation and data to enable effective operation

and maintenance of the facilities



Q36 When will the Completions Management Tool (CMT) be addressed within a

project?

1. The selection of the CMT must be committed as early as possible (preferably during the

BOD phase).

2. CMT is critical to efficient management and monitoring of the planned construction to

completions turnovers.

3. CMT assists the development of a well defined agreement on construction/completions

planning and schedule interfaces.

4. CMT must be populated during FEED and data input finalised in the Detail Engineering

phases.

5. CMT provides an effective management of the ‘dead’ to ‘live’ transition of the site.

6. CMT controls the Project Milestone Punch Lists.