best practice - lessons learned · best practice - lessons learned general contract management ......
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Best Practice - Lessons learned General Contract Management
Roy Piek, Director PMC
TEBODIN
Moscow | April 19, 2017
Visualization of Influence vs Expenditures during project
Tebodin |Chemical Event | RP April 19, 2017 page 2
Detail
Engineering
Project Life Cycle
Le
ve
l o
f In
flu
en
ce
Pro
ject E
xp
en
ditu
res
Major Influence Decreasing Influence Low Influence
Project
Authorization
Scouting
Phase
Conceptual
Design Phase
BASIC
Engineering
TO /
SU
Mechanical
Completion
Overall
Cost
Influence
Curve
Project
Expenditures
Procurement
/Construction
Point where changes
influence result rapidly
BIM – it is a tool for engineering, when 3D model is developed with
indication of technical, financial and time attributes of each element.
Tebodin executes projects using this technology in
order to reach high quality and time & cost saving.
Building Information Modeling (BIM)
Tebodin |Chemical Event | RP April 19, 2017 page 3
BIM advantages*:
▪ 10% - saving of the contract value through clash
detections.
7% - reduction of project time
3% - cost estimation accuracy (MTO)
80% - reduction in time taken to generate a cost
estimate
*Based on Stanford University center for Integrated Facilities Engineering
Engineering - Procurement - Construction: EPC
Contractor with responsibility for design (all or parts)
Project Management - Contract/Consultancy: PMC
Management company controlling Contractor(s) & Construction
Engineering - Procurement - Construction
Management: EPCM
Design/Management company responsible for design (detail
level t.b.d.) and controlling Contractor(s) & Construction
Various contract strategies
Tebodin |Chemical Event | RP April 19, 2017 page 4
EPC/PCM or EPCM ? Advantages compared
Tebodin |Chemical Event | RP April 19, 2017 page 5
EPC + PMC:
One Stop Shopping "One point of
Contact"
Best/Only for well defined projects
before EPC Contractor selected
(Minimal Unknowns)
Hands off" client approach to
project
Minimal Legal / Financial Risk
Minimal Client Staffing
Requirements
EPCM:
More Control over (Engineering)
Process`
Better for less defined projects with
anticipated changes to scope of supply
Less Legal Litigation (Identify issues
early and remedy situation before larger
problems arise)
Owner's contracting Flexibility (different
contractors, materials purchasing etc)
• General Contractor was changed
to multi-subcontractors with PMC
team >20 FTE on site
• No general contractor at site,
these functions taken over by the
PMC team
• Logistics and Materials by PMC
team
• Brownfield requires huge
attention (design, utilities,
materials, interfaces, etc.)
Recent experience CherepovetsTebodin is the partner for integration of foreign installations in large plants
Tebodin |Chemical Event | RP April 19, 2017 page 6
General contractor vs multi subcontracting:
▪ Only the strong points of a contractor shall be used, scope which contractor
has weaknesses shall not be hired.
▪ For different scope of works, multiple contractors to involve with proven
experience
▪ To avoid any monopoly position of one company
▪ Only financially strong companies to involve
▪ It is an option to have No general contractor at site: it can be done
▪ Purchasing by three party agreements is an option
See also the investors guide for information on many more topics
Tebodin |Chemical Event | RP April 19, 2017 page 7
Choice of Project organization is crucial for success
Best practice / Lessons learned , general contract
management
Tebodin |Chemical Event | RP April 19, 2017 page 8
• Introducing of extra contractual clauses to the contractors contract: Examples
• avoid claims of extra works based on an incomplete BOQ: working drawings and clients requirements shall
prevail over BOQ
• avoid charge of huge indirect cost by contractors in case of delays on others behalf: there shall be an
indication/limitation of monthly indirect cost in the contract or main proposal;
• avoid charge of huge amounts of manpower for extra works: in the contract a man power schedule shall be
included, which can be used against (over estimated) extra works negotiations;
• Use performance guarantee retention clauses (up to 10% to hold from monthly payments)
Watch out: First delays up to 1 to two months occur already at start of the construction: Management/control of in
time contract signing by client, LOI, and in time advance payment (contractors promise to start based on LOI, but
later will claim delay on the contract signing. Do not use the LOI advantage in the critical path.
Best practice / Lessons learned , general contract
management
Tebodin |Chemical Event | RP April 19, 2017 page 9
If you want to be secured
by a reliable and cost
aware engineering and
PMC company, call us.
We make CHEMICALS work