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AEPM-MA-0001_0 ASPEC EPCM Project Manual 1

ASPEC ENGINEERING PTY LTD ABN 22 105 267 016

Level 1 99 Melbourne Street South Brisbane QLD 4101

PO Box 3075

South Brisbane QLD 4101

Tel: 07 3193 0400 Fax: 07 3607 2252

www.aspec.com.au

EPCM Project Manual

Document No: AEPM-MA-0001

Date: 15th May 2017

Revision: 0

EPCM Project Manual


TABLE OF CONTENTS

1 INTRODUCTION .............................................................................................................. 5

2 ROLES & RESPONSIBILITIES ....................................................................................... 6

2.1 PROJECT PRINCIPAL ................................................................................................... 6 2.2 PROJECT MANAGER ............................................................................................ 6 2.3 ENGINEERING MANAGER ........................................................................................... 6 2.4 RESIDENT ENGINEER .................................................................................................. 6 2.5 PROJECT CONTROL .................................................................................................... 7 2.6 OTHER POSITIONS ...................................................................................................... 7

3 PROJECT INITIATION ..................................................................................................... 7

4 PLANNING ....................................................................................................................... 7

4.1 PROJECT EXECUTION PLAN ....................................................................................... 7 4.2 DETAILED PLANS ........................................................................................................ 8

4.2.1 Project Health, Safety, Environment and Community Plan (HSEC) ............................................ 8 4.2.2 Risk and Opportunity Management Plan ........................................................................................ 9 4.2.3 Project Controls Management Plan ................................................................................................ 9 4.2.4 Change Management Plan .............................................................................................................. 9 4.2.5 Engineering Management Plan .................................................................................................... 10 4.2.6 Quality Management Plan ............................................................................................................. 11 4.2.7 Procurement and Contracts Management Plan ........................................................................... 11 4.2.8 Commissioning Management Plan ............................................................................................... 11

5 ENGINEERING ............................................................................................................... 12

5.1 THE ENGINEERING PROCESS .................................................................................... 12 5.2 DESIGN CRITERIA ..................................................................................................... 12

5.2.1 General ........................................................................................................................................... 12 5.2.2 Criteria Description ....................................................................................................................... 13

5.3 DESIGN AND DETAILING ISSUES ............................................................................... 14 5.4 INTERFACE ISSUES .................................................................................................... 14 5.5 OPERABILITY ISSUES ................................................................................................ 16 5.6 MAINTAINABILITY ISSUES ........................................................................................ 16 5.7 TECHNICAL SPECIFICATIONS ................................................................................... 16 5.8 ENGINEERING SUPPORT DURING PROCUREMENT & CONSTRUCTION ................... 17

6 ESTIMATING .................................................................................................................. 17

6.1 ESTIMATE TYPES ...................................................................................................... 17 6.2 ESTIMATING METHODOLOGY .................................................................................. 18 6.3 DIRECT COSTS .......................................................................................................... 18

6.3.1 Estimating Methodology for Direct Costs ..................................................................................... 18 6.4 INDIRECT COSTS ....................................................................................................... 21

6.4.1 Estimating Methodology for Indirect Costs .................................................................................. 21 6.5 PROJECT CONTINGENCY .......................................................................................... 22

6.5.1 Risk Analysis .................................................................................................................................. 22 6.6 OWNER’S COSTS ....................................................................................................... 22

7 SCHEDULE .................................................................................................................... 26

7.1 ISSUES AFFECTING SCHEDULE .................................................................................. 26 7.2 STRATEGIES .............................................................................................................. 26 7.3 SCHEDULING PRINCIPLES ......................................................................................... 27

EPCM Project Manual


7.4 SCHEDULING OF ENGINEERING ................................................................................ 27 7.5 MONITORING OF SCHEDULE .................................................................................... 27

8 PROCUREMENT ............................................................................................................ 27

8.1 CONTRACTING APPROACH ....................................................................................... 27 8.2 NATURE OF CONTRACT ............................................................................................ 28 8.3 CONTRACTOR SELECTION STRATEGY ..................................................................... 28 8.4 SEPARATE PACKAGES FOR STRUCTURAL / MECHANICAL AND ELECTRICAL ........ 29 8.5 PRE-ORDERING OF MATERIALS OR PRE-PLACING OF NOMINATED SUB- CONTRACTS 29 8.6 PREPARATION OF TENDER DOCUMENTS ................................................................. 30 8.7 ORDER OF SECTIONS ................................................................................................ 30 8.8 CALLING TENDERS ................................................................................................... 30 8.9 TENDER EVALUATION ............................................................................................... 31

8.9.1 Assessment of Tender Submissions ............................................................................................... 31 8.9.2 Meetings with Tenderers ................................................................................................................ 32 8.9.3 Reporting on Tenders .................................................................................................................... 33

8.10 AWARD OF CONTRACT ............................................................................................. 33 8.11 EXPEDITING AND INSPECTION .................................................................................. 34 8.12 PACKAGING AND TRANSPORT .................................................................................. 34 8.13 RECEIPT OF GOODS .................................................................................................. 35 8.14 CERTIFYING PAYMENT ............................................................................................. 35

9 HEALTH SAFETY ENVIRONMENT & COMMUNITY (HSEC) ...................................... 35

10 CONSTRUCTION SUPERVISION .............................................................................. 37

10.1 CONTROL AND SUPERVISION OF THE WORKS ......................................................... 37 10.2 KEEPING RECORDS ................................................................................................... 37 10.3 KEEPING CONTROL .................................................................................................. 37 10.4 ADMINISTRATIVE PROCEDURES ............................................................................... 38 10.5 PROGRESS MEETINGS ............................................................................................... 38 10.6 SITE RECORDS .......................................................................................................... 38 10.7 DAILY REPORTS ........................................................................................................ 39 10.8 PROGRESS PHOTOGRAPHS ....................................................................................... 40 10.9 LABOUR AND PLANT RETURNS ................................................................................. 40 10.10 WEEKLY REPORTS ................................................................................................ 40 10.11 MONTHLY REPORTS ............................................................................................. 40 10.12 PROGRESS CHARTS ............................................................................................... 40 10.13 MEASUREMENT DRAWINGS .................................................................................. 41 10.14 'AS-CONSTRUCTED' DRAWINGS ........................................................................... 41 10.15 JOB NOTES ............................................................................................................. 41 10.16 NOTATION FOR DEGREE OF PERMANENCE ........................................... 42 10.17 TECHNICAL AND CONSTRUCTION ISSUES ............................................................. 43

10.17.1 General Constructability Issues ................................................................................................ 43 10.17.2 Materials of Construction ......................................................................................................... 44 10.17.3 Quality Control Issues ............................................................................................................... 44 10.17.4 Defective Equipment .................................................................................................................. 44 10.17.5 Commissioning .......................................................................................................................... 45

10.18 PERSONELL AND EQUIPMENT ............................................................................... 45 10.19 PROJECT ENVIRONMENT ...................................................................................... 46

11 CONTINGENCY PLANNING ...................................................................................... 47

APPENDIX A – SHUTDOWN AIDE MEMOIR ...................................................................... 48

EPCM Project Manual


EPCM Project Manual


1 Introduction

This document describes the key activities and requirements for conducting Engineering, Procurement and Construction Management (EPCM) Projects by ASPEC. The EPCM services will commence with engineering well before construction starts and will continue through project close-out and sometimes through the construction warranty period. The actual construction work is performed by one or more "Works Contractors" under the direction of ASPEC. ASPEC as EPCM Consultant acts as agent of the Owner in both procurement and construction management activities. The Owner may also procure materials and equipment directly which will be incorporated into the Work. The Works Contracts are entered into between the Owner and the Works Contractor. The EPCM model allows the Owner to be involved in the project execution,normally via an Owner’s team including the design review process. This relationship needs to be addressed between the Owner and ASPEC prior to project commencement. EPCM facilitates a rapid transition from front-end development into detailed engineering and construction and is a good method for retrofit projects which have to be closely integrated with operations. The contractual terms and conditions allow ASPEC to commence work and be involved in development of the overall scope with the Owner. The contracting strategy for the project, and the selection of Works Contractors, is ultimately the Owner’s responsibility. The Owner retains responsibility for the Works Contractors including the project estimates and final completion schedules. However, the Owner and ASPEC work in a consultative mode to select the optimum strategy for the project. Depending upon the type of contact entered into between the Owner and Works Contractors and Suppliers, ASPEC may be appointed as “Superintendent” or “Engineer” to carry out construction supervision and contract administration. Where the contract is directly between the Owner and Works Contractor or Supplier with no “Superintendent” or “Engineer” nominated, ASPEC will be an agent of the Principal. Effective communication between the Owner and ASPEC is crucial to the success of a project. The two organizations must remain aligned in all aspects of project execution. These can be:

• scope of work • technical specifications • change management • subcontracting and purchasing strategies • site access and use • HSEC requirements • interfaces with ongoing operations • financial authorities • accounting procedures • progress reporting • public affairs • etc.

Direct communication between the ASPEC’s functional departments and the Owner’s counterparts is necessary – but protocols must be followed to ensure overall control of the project. In general, all communications dealing with issues that affect the project’s cost, schedule, quality, safety, or reputation must be routed through the Owner’s and ASPEC’s named representatives. For procurement and construction management functions, the underlying relationship between ASPEC and Owner is one of agent and principal and in that relationship ASPEC needs to

EPCM Project Manual


communicate project needs and the Owner must provide instructions. A communication plan is crucial to the success of an EPCM project and must include the following:

• key contacts on both sides for concerns regarding design, scope, schedule and cost;

• meeting frequency during the design and construction phases of the project;

• Nature of design reviews based on progress; and

• management of field queries from the Works Contractors to minimize cost and schedule impacts.

Principal Contractor responsibilities are carried out by the Owner (or ASPEC as agent for the Owner) or a Works Contractor. The party fulfilling this role must have the requisite control over HSE to perform in the Principal Contractor function.

2 Roles & Responsibilities

When ASPEC is appointed as an EPCM Consultant, the following key roles will be nominated;

2.1 PROJECT PRINCIPAL

This position will be filled by a director or senior manager of ASPEC who will act as the project sponsor within the company. The Project Principal provides a conduit to the Owner to maintain the performance of the project team. The Project Principal will ideally be well known to the Owner and have a high level of technical expertise and experience in projects of the type being undertaken. One of the key functions of the Project Principal is to ensure adequate personnel and services are devoted to the project by both the Owner and the EPCM and to resolve any resourcing or other priority issues within ASPEC. The Project Principal will visit the Owner and Project Site regularly and provide high level advice on issues associated with the Project and other interfaces.

2.2 PROJECT MANAGER

The Project Manager is responsible for all of the Company’s activities throughout the course of the Project. This includes the planning and design stage and site construction stage.

2.3 ENGINEERING MANAGER

The Engineering Manager is responsible for co-coordinating ASPEC’s engineering activities throughout the course of the Project. The Engineering Manager may be the Project Manager for the design stage of the project before a site team is allocated. Once site team is established, the Engineering Manager will be responsible for coordinating engineering support.

2.4 RESIDENT ENGINEER

The Resident Engineer is ASPEC’s nominated delegate on site. The position may also be termed Construction Manager depending upon the circumstances. The role of Project Manager may revert to the Resident Engineer once the design stage of the project is completed and the site phase commences. Where ASPEC is nominated as the “Superintendent” or “Engineer” under Contracts between the Owner and Works Contractors or Suppliers, the Resident Engineer will be the nominated “Superintendent’s Representative” or “Engineers Representative” under the Contract.

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Contracts are an agreement between the Owner and the Contractor and the powers of the “Superintendent” or” Engineer” are defined by that agreement. Financial considerations are of supreme importance to both parties and the Resident Engineer must appreciate the financial effects of his technical decisions and instructions.

2.5 PROJECT CONTROL

The Project Control function will assist with contract administration, scheduling and financial reviews throughout the Contract in consultation with the Project Manager, Engineering Manager,and Resident Engineer.

2.6 OTHER POSITIONS

Other positions such as Section Engineer, HSEC Advisor, Shutdown Manager, Commissioning Manager ,and HR Manager etc may be appointed, depending upon the size and complexity of the project. This will be defined in the project planning stage.

3 Project Initiation

Once a project is identified, a Project Charter should be developed in conjunction with the Owner to outline the purpose of the project, the way the project will be structured and how it will be successfully implemented. The Project Charter describes the project vision, objectives, scope and deliverables, as well as the stakeholders, roles and responsibilities.

4 Planning

4.1 PROJECT EXECUTION PLAN

The key deliverable from the planning phase is the Project Execution Plan (PEP). This is a detailed plan for undertaking the Project. The Project Execution Plan should contain:

1. Background: State the background issues and purpose of the project which is to be realised

2. Mandate: Confirm the approval given to initiate the project e.g. date of the approval of the recommendation/budget allocation to be implemented based on the organisations Structural Integrity Plan

3. Project Scope: The detailed scope of work to be included

4. Objective/s: Insert the objective/s of the project to be implemented ie Standards, life, operating requirements

5. Results: State the results to be achieved by the project i.e. results to achieve the objective/s

6. Project Team: State what the contractual arrangements are for the project & who the project team will be, who the project manager will be and define roles and responsibilities of stakeholders/people involved in the project team, including any external resource required to achieve the results. (Note in terms of good project management single point accountability for each work component is essential i.e. who is the specific person/functionary responsible for each element.

7. Project Cycle: State the project cycle from start to completion comprising the major work components and deliverables/results to be achieved within each work component.

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8. Financial Implications: State the project budget (including the major cost items e.g. cost of engaging service providers, works contractors and ancillary costs such as production of manuals, communication workshops etc). Provide cost schedule in standard format.

9. Schedule: Provide a summary timetable of the actions to be undertaken /duration/start date/completion date/responsibility. Back up the summary timetable with a detailed gantt chart.

10. Monitoring and Reporting: State the Key Performance Indicators which will be used to monitor progress and effectiveness. State the reporting to be provided including a report template, frequency of reporting, and responsibility for reporting.

11. HSEC Management: Describe the responsibilities for HSEC and processes to be followed.

12. Risk and Opportunity Management: State the major risks and opportunities that the project may encounter and how the risks will be mitigated (i.e. actions to reduce and manage the risks), who is responsible for each action.

13. Procurement/Contracting Arrangements: State if any external resources/service providers are to be contracted in order to implement the project. If yes, include the Terms of Reference/scope of work for the service provider

14. Quality Management: State how the quality of the end products/results will be assessed, and managed – by whom and when.

15. Communication Management: State the communication plan for the project including: what the communication components are and for each component who the target audience is, what is the message to be communicated, what medium is to be used to communicate with the target audience, frequency of communication, actions required to achieve each communication component, responsibility for achieving each component, risks associated with each component, and cost of each communication.

16. Project Closeout: Define the actions to be carried out for project closeout including filing of records, training manuals, financial closeout, KPI reporting, lessons learnt etc.

4.2 DETAILED PLANS

The overall delivery of the Project will be controlled by effective management of the major Project elements including HSEC, Risk and Opportunity, Project Controls, Change, Engineering, Quality, Procurement and Contracts, Construction and Commissioning.

In most cases the nature, significance and complexity of a project element may warrant the preparation of separate management plans. Such plans will define the requirements for management of the particular element. Each of these plans will be a standalone document within the structure of the Project Execution Plan. To avoid the PEP becoming physically too large, these plans are not incorporated into the main PEP document, but are prepared as separate referenced documents.

4.2.1 Project Health, Safety, Environment and Community Plan (HSEC)

The Project HSEC Plan outlines the strategies, intent and management approach to be adopted during all phases of the Project, to prevent occupational injury and illness during operations in the facility being constructed and during project implementation, by anticipating, recognising, evaluating and controlling safety, health, environmental and community hazards.

This goal will be achieved by promoting a culture of system safety, HSEC leadership and commitment, employee consultation and involvement, hazard awareness and risk management, supported by an effective management system and audit programs.

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This plan ties various aspects of the Owners Safety Management System together including the induction process, the contractor management process and additional activities.

4.2.2 Risk and Opportunity Management Plan

The Risk and Opportunity Management Plan defines the processes to be followed in identifying project risks and opportunities and analysing and treating the resultant causes, and includes requirements for administration and implementation.

These goals will be achieved by identifying the risks and opportunities, understanding the causes involved and identifying the risk controls that can be established to ensure that, if the risks cannot be eliminated, they are at least managed to be as low as reasonably practicable. Some of these risk controls will be specific management plans such as the HSEC Management Plan, Quality Management Plan etc.

Implementation of this plan will demonstrate due diligence by identifying and assessing the material risks associated with the project facilities and implementation, taking appropriate measures to control them, and ensuring that the justification for accepting the residual risk is adequate.

4.2.3 Project Controls Management Plan

The Project Controls Management Plan contains the procedures and work instructions to be implemented and followed to support the systems established for the management, monitoring, control and administration of the Project.

This plan provides guidance to the processes, steps and phases necessary to allow the work being undertaken to be completed in the most efficient manner, whilst ensuring that the correct controls and levels of authorisation are maintained.

The Project Controls Plan is designed to achieve the following project purposes:

• To foster planning and commitment in a timely fashion by project team members to the elements of the project controls program.

• To communicate the elements of the project controls program to all levels of management for inclusion in the overall Project Execution Plan.

• To assign specific responsibilities for the preparation, review, approval and issuance of project controls deliverables.

• To define any special analysis or reporting requirements to conform with contractual terms.

• To define the specific project controls functional and reporting requirements.

• To provide a solid basis for managing the implementation effort, both cost and schedule, through identification of all the control tools to be used during the course of the project

4.2.4 Change Management Plan

The Change Management Plan contains the procedure and forms to be implemented to support the management of change on the project.

This plan provides guidance to the processes, steps and phases necessary to guarantee the work being undertaken is completed in the most efficient manner, whilst ensuring that the correct controls and levels of authorisation are maintained.

The Change Management Plan is designed to achieve the following project purposes:

• To control the change process.

EPCM Project Manual


• To communicate the change to the required parties.

• To assign specific responsibilities for the preparation, review, approval and issue of project changes.

• To define the specific project change notification requirements.

• Trend management to control the schedule andcosts associated with change.

4.2.5 Engineering Management Plan

The Engineering Management Plan is the principal document that defines the methodology and procedures for undertaking the management and coordination of the engineering design and documentation phase of the Project. Engineering management and coordination activities include:

• Overall management and coordination of engineering services.

• Standards to be adopted

• Engineering tools used

• Interdisciplinary coordination and interface management.

• Coordination of preparation of project design basis / parameters documentation.

• Management of general engineering and drafting standards for the project.

• Monitoring of design progress against schedule and implementation of necessary corrective actions.

• Overview of design quality management processes.

• Overview of technical document management.

Procedures in this plan cover topics such as how design verification, checking of drawings, indexing and filing of design calculations, drawing standards, etc., will be achieved. This plan will also cover the requirements for the supply of design deliverables for the procurement/construction phases and the supply of ‘as built’ drawings.

Whilst the focus of the Engineering Management Plan is on the design activities to be undertaken directly by ASPEC, the plan also addresses requirements for design activities undertaken by other parties, which include:

• Design and construct contracts.

• Vendor drawings and technical documentation.

• Shop drawings.

This plan will also address the Project Design Criteria, which will be established to:

• Achieve consistent, efficient and effective engineering across all packages by setting standards, presentation formats and protocols required at the outset.

• Identify specific features to be included in designs that address known problems and allow flexibility to manage changes that may occur over the life of the project.

• Specify particular Owner requirements or preferences.

• Incorporate reviews by the Owners Team during the design process to verify correct interpretation and inclusion of their requirements.

EPCM Project Manual


4.2.6 Quality Management Plan

The Quality Management Plan will be established in accordance with the principles embodied in ISO9001. This Plan will include a Quality Assurance Program and Quality Assurance and Quality Control Execution Plans, for EPCM Consultant activities and those Supplier activities controlled by Purchase Orders and Contracts.

The Scope of the Quality Management Plan will include all Quality Assurance and Quality Control (QA/QC) related functions and activities related to ASPEC’s scope of work.

The objectives of the Plan are that equipment, materials, systems, goods and services meet the specified project requirements.

Purchase Orders and Contracts will include specific requirements for quality assurance and quality control.

4.2.7 Procurement and Contracts Management Plan

The Procurement and Contracts Management Plan is the principal document that defines the way procurement will be undertaken and managed on the Project. This plan outlines the purchasing and contract management principles for the Project and, whilst it is not a procedural document, it references the Owners procurement procedures. Inspection, expediting and transport to site of supply items are also covered by the plan.

ASPEC and Owner’s Team will undertake the overall procurement function jointly. The Procurement and Contracts Plan will define the roles and responsibilities for each organisation in performing this activity.

The scope of the procurement function includes the following:

• Planning for procurement activities

• Prequalification of suppliers and contractors

• Preparation of enquiry documentation and the enquiry package

• Management of the tendering process

• Evaluation of tenders - technical and financial

• Awarding Contracts (including Special Purchase Agreements, Purchase Orders and Consultancy Agreements)

• Preparing necessary contract documentation

• Expediting supply activities

• Coordinating inspection activities

• Administration of Purchase Orders and Contracts

• Coordinating transport and logistics services including customs

• Closing out Contracts, Purchase Orders and Consultancy Agreements.

4.2.8 Commissioning Management Plan

The Commissioning Management Plan describes the procedures, rules and responsibilities to be followed in commissioning the project safely and efficiently. In addition, this plan provides details of the commissioning activities to be undertaken, including:

• Pre-Commissioning

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• HAZOP 4

• Dry Commissioning (No Load Commissioning)

• Wet Commissioning (Load Commissioning)

• Ramp Up

• Performance Testing

• Handover and Acceptance

• Any necessary training of Operations Personnel and assistance with operational readiness

The Commissioning Management Plan also outlines the roles and responsibilities of the respective parties during the commissioning process.

5 Engineering

5.1 THE ENGINEERING PROCESS

The engineering process as defined in the engineering management plan (EMP) comprises a series of flowcharts and narrative clearly defining the process and procedures to be followed by all stakeholders in order to deliver a fully compliant design, on time and within budget. Amongst other things it will define: -

• How design information is to be distributed.

• Standards to be adopted internally and externally

• Regulatory requirements

• The process for reviewing information and the collection of comments.

• The key stage deliverables (reviewable design data) and the process for stakeholder sign off.

• The process for the management of engineering to cost.

• The value improving practices to be used.

• The risk management processes.

• The process for managing Health and Safety in design

• Engineering schedule linked to the project schedule

. In essence the EMP contains all the information necessary to provide full stakeholder awareness of how the engineering process works and their responsibilities associated with the delivery of design and support engineering.

5.2 DESIGN CRITERIA

5.2.1 General

For any Project it is essential to produce a design criteria document sometimes termed a basis for design document or design parameters document. The document should include a listing of all structures, systems, and components to be modified or installed as part of the project.

EPCM Project Manual


5.2.2 Criteria Description

A Criteria Description Section should be prepared for each designated structure, system, or component. Each Criteria Description Section will include the following:

1. If an existing structure, system, or component is to be modified, provide a technical description of the current design conditions and how they will be changed. Also describe any additional design objectives that must be included in the project. Much of this information may need to be approximated at this point in the project. The following parameters should be used as a reference for the preparation of the Criteria Description Section and to aid in identifying additional design objectives.

2. Basic functions of each structure, system, and component:

a) Performance requirements such as capacity, rating, system output b) Codes, standards, and regulatory requirements including the applicable version and/or

addenda c) Design conditions e.g. pressure, temperature, voltage d) Loads such as wind, thermal, live, and dynamic e) Anticipated environmental conditions during storage, construction, and operation. Conditions

such as pressure, temperature, humidity, corrosiveness, site elevation, and wind direction should be reviewed.

f) Interface requirements including definition of the functional and physical interfaces involving the existing structures, systems, and components

g) Material requirements such as compatibility, protective coatings, corrosion resistance, and erosion resistance

h) Mechanical requirements such as vibration, stress, shock, pressure integrity and reaction forces

i) Structural requirements covering such items as equipment foundations and pipe supports j) Electrical requirements such as a source of power, voltage, electrical insulation and motor

requirements k) Process configuration l) Electrical configuration (Single-line Diagrams, etc.) m) Layout and arrangement requirements n) Operational requirements under various conditions, such s plant start-up, normal plant

operation, plant shutdown, plant emergency operation, special or infrequent operation, and system abnormal or emergency operation

o) Instrumentation and control requirements including indicating instruments p) Access and administrative control requirements for plant security q) Test requirements including in-plant tests and the conditions under which they will be

performed r) Accessibility, maintenance, repair, and in service inspection requirements for the plant,

including the conditions under which these will be performed s) Personnel requirements and limitations including the qualifications and number of personnel

available for plant operation, maintenance, testing, and inspection t) Transportability requirements such as size and shipping weight. Limitations, I.C.C.

regulations and special unloading requirements u) Fire protection or resistance requirements v) Handling, storage, and shipping requirements w) Materials, processes, parts, and equipment suitable for application

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x) Safety requirements for preventing personnel injury including such items as restricting the use of dangerous materials, escape provisions from enclosures, and grounding of electrical systems

y) Review of change on existing equipment with the manufacturer z) Constructability issues

For the design conditions and objectives described, state the specific source or manner in which the information was obtained. Following is a list of typical sources:

a) Technical records such as drawings, data books, bills of material, instruction manuals, system descriptions

b) Test reports c) Site visit/field inspection data d) Engineering, operations or maintenance personnel e) Calculations f) Assumptions or estimates. Describe efforts applied in verifying the accuracy and

completeness of design information

5.3 DESIGN AND DETAILING ISSUES

Detailing errors will generally result in problems with site fitup during erection, and resultant rectification work. With retrofit projects a significant portion of structural steelwork is often to be fitted to an existing structure, so fitup is likely to be a consideration in any case, even if the detailing is accurate.

Some possible strategies to mitigate potential issues are outlined below:

Issue Possible Mitigating Strategies

Detailing Issues

Site Fitup Issues

• Design to consider site fitup (e.g. allow ‘green’ for site trim) or site drilling of bolt holes.

• Drawing checks

• Field checks where applicable

• Trial assembly where practicable

• Review the structure to identify the critical components (i.e. those components which, if in error, would be costly to rectify or incur significant time losses to the schedule and check these more rigorously.

• Availability of designer to be on hand to see problem and enable quick engineering decisions to be made.

• Procure some spare sections (and paint) if deemed appropriate. At the very least, ensure sections are readily available.

• Use of advanced technology - laser scanning

5.4 INTERFACE ISSUES

Interfaces are often neglected, and as a result, can cause problems during erection, installation or commissioning.

There are several types of interfaces to be considered:

1. Physical interfaces:

A number of physical interfaces exist e.g.:

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o Structure to foundation

o Between structural or mechanical components

o Mechanical components to structure

o Electrical component to structure / mechanical components.

2. Interdisciplinary interfaces: Again, a number of interdisciplinary (i.e. civil – structural – mechanical – electrical – PLC - commissioning) interfaces exist e.g.:

o Physical – as noted above

o Scheduling – the structural mechanical, electrical and commissioning schedules need to be combined into one overall project schedule

o Functional – usually a design issue

o Communications – what information needs to be transmitted between designers / contractors in each discipline?

o Construction - How will the various disciplines most effectively work together given the project constraints?

3. Organisational interfaces e.g. owner, designer, contractor as well as within each organization. This generally relates to organizational roles and responsibilities, as well as communications protocols.

Some possible methods to manage interface issues include:


General Interface Issues

• Develop an interface plan to assist in the management of interfaces.

• Allocate an ‘interface’ engineer

• 3D Design with clash detection

Physical Interface Issues

• Drawing checks by vendors

• Field checks where applicable

• Trial assembly where practicable

• Review the structure to identify the critical components (i.e. those components which, if in error, would be costly to rectify or incur time losses to the program) and check these thoroughly.

• Availability of designer to be on hand to see problem and enable quick engineering decisions to be made.

Interdisciplinary / Organisational Interface Issues

• As above for physical interfaces

• Organisation chart

• Overall project schedule

• Communications Plan and protocols

• Review schedule to try to identify where and when working interfaces will occur and analyse for possible conflicts.

EPCM Project Manual


5.5 OPERABILITY ISSUES

Issues that could be considered include:

• Safety aspects – guarding, access for monitoring, safe operating procedures, working at height, confined space, potential energy

• Performance - Does the system, equipment perform as specified?

• Functionality - Are all the necessary control functions and operating features available?

• Ease of Use - How ‘User Friendly’ is the system / equipment to operate?

• Reliability – How reliable is the system / equipment

• Establish the roles and interface between operational personnel and the project team during construction

5.6 MAINTAINABILITY ISSUES

Some of the issues that could be considered include:

• Safety aspects – guarding, access, removal

• Maintenance Manuals

• Training – Is any training required on specialized equipment?

• Spares – What spare parts are recommended / provided?

• Access for maintenance – Is there sufficient access around equipment to enable maintenance to be undertaken?

• Handling – If equipment / components require removal, what is involved?

5.7 TECHNICAL SPECIFICATIONS

The principle for technical Specification writing is that it should cover the technical requirements only and not scope of work or payment terms which will be covered separately in the tender documents and contract documents. Most owners have document systems for drawing management and retrieval; however they often do not have robust systems for retaining and accessing technical specifications. Thus it is preferable to show the majority of technical information on the drawings rather than in the specification. The Specification is a legal document so it is important to avoid repetition and ambiguity. Where Australian or other Standards are referred to, the specification should not repeat requirements included in the standard as mandatory. Owners often require that their standard specifications be used for the project. These standards need to be up to date and without ambiguity (between the standard specification and project specific requirements). Retrofit projects involve rehabilitating or upgrading existing plant and equipment. Any available records on these facilities supplied by the Owner to ASPEC should also be supplied to the Contractor. These records are important to the Contractor as well as to the design engineer. If facilities are to be demolished, the information will allow the Contractor to assess the level of effort and equipment required. If the facilities are to be modified, the information will assist the Contractor to understand how the new work will fit in with the existing facilities, especially when some work will have to be field fitted or machined insitu.

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As-Constructed drawings of the existing facilities, where available can be included in the project drawing set to supplement data referenced in the Specification. It is the responsibility of the Contractor to review all of the reference data furnished by the Owner. A Contractor who fails to do so would lose rights to claim. Legally, Contractors are held to the information and data in the Specifications contained in the Contract regardless of whether or not they have read them.

5.8 ENGINEERING SUPPORT DURING PROCUREMENT & CONSTRUCTION

The engineering plan and resource plan for the project needs to allow for engineering support during the procurement and construction phases. The staff assigned to provide ongoing support need to be familiar with the technical requirements. Robust documentation and filing systems greatly assist quick turnaround in answering technical queries during construction as staff involved in the design process may not be available and memories of what and why things were done may have faded. The engineering support during construction should be coordinated through the Engineering Manager as a single point of contact as defined in the Project Execution Plan and Engineering Management Plan. A robust “Request for Information” (RFI) system should be put in place as part of the project communication plan. RFI’s from the Contractor should be registered and tracked so the status is known at all times.

6 Estimating

6.1 ESTIMATE TYPES

Estimates are prepared during the development of a project in parallel with the various project development stages, classified as follows:

° Order of Magnitude Estimate

Undertaken to provide preliminary economic evaluation or comparison of alternatives. Used for indication of whether additional study or engineering is warranted. Typically, has a stated accuracy of -30% to +50%.

° Preliminary Estimate

Used for economic evaluation of a project and the basis for positive rejection of a project. Typically, has a stated accuracy of -15% to +30%.

° Control Budget Estimate

Suitable for a detailed economic evaluation and will determine the control budget of a project. Forms the basis for Board approval and funding. Typically, has a stated accuracy of -10% to +20%. Normally based on a 20 to 30 % engineering complete.

° Definitive Estimate

Part of the execution phase of a project. Typically carried out after 60% of the engineering is complete. Incorporates any commercial commitments already in place, any trend estimates either approved or unresolved, and current design quantities and pricing for the unawarded work. Typically, has a stated accuracy of +/- 10%

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The fundamental difference between these types of estimates is the reliability of the information used to prepare the estimate within a certain accuracy range.

6.2 ESTIMATING METHODOLOGY

The standard approach to the preparation of estimates is as follows:

• Define the scope of work

• Quantify the work in accordance with the standard commodities

• Calculate labour man-hour rates for construction work

• Schedule the work on a time/logic basis

• Determine the purchase cost of the installed material

• Determine the purchase cost of installed equipment

• Determine the installation cost to perform the construction work

• Establish the requirements for freight, duty and taxes

• Determine the engineering man-hours required to carry out the engineering design and documentation

• Determine the procurement, project administration and construction management man hours required to perform the services

• Calculate the cost of carrying out the engineering, procurement and construction management

• Establish foreign currency costs and exchange rates if applicable

• Establish appropriate base date and escalation criteria

• Undertake estimate reviews appropriate to the type of estimate being prepared

6.3 DIRECT COSTS

Direct costs are generally quantity-based and include all of the permanent equipment, materials and labour associated with the physical construction of the process facility, such as the following:

• Permanent equipment

• Bulk materials

• Freight

• Installation costs

• Direct field labour costs

• Subcontractor indirect costs

6.3.1 Estimating Methodology for Direct Costs

Permanent Equipment Depending on the type of estimate being prepared, equipment will be based on either historical pricing or quotations. The cost of freight, transportation, currency basis/ exchange rates, duties and taxes will need to be added if not already included within the quoted price.

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Erection costs for equipment will be estimated by using historical data or by vendors as part of a supply and erect package. Where no better information is available, installation hours will be estimated from first principles.

Special attention will be given to site access, crane selection and scaffolding requirements. For work carried out in an existing operating facility, the effect on construction productivity caused by the operating plant environment must also be considered.

All equipment pricing in the estimate must be carefully reviewed to ensure the following are included or considered:

• Additional cost for changes since the equipment was quoted

• Allowance for future design changes

• Allowance for vendor site representatives (hour/day rates plus transport to/from site and accommodation)

• Spare parts and operating and maintenance manuals

• Freight and packaging

• Duty and taxes

• Escalation

• Exchange rate variations

Bulk Materials Bulk materials estimates are prepared in much the same way as those for permanent equipment, with pricing being obtained from fabricators, vendors or from historical records, depending on the type of estimate being prepared.

Concrete

Concrete quantities are to be estimated in accordance with the type of structure. Typically, concrete is classified as suspended or grade slab or beam, equipment footing, column, wall or structural footing. Strength of concrete and density of reinforcing steel per cubic metre should be specified.

Steelwork

Steel quantities will be developed to determine the light (<31kg/m), medium (31-60kg/m), heavy (60 –90kg/m) and extra heavy (90 –120kg/m) steelwork, welded plate beams, purlins and girts, grid-mesh and handrail classifications. The steelwork fabrication cost will include supply, surface treatment, delivery and shop detail drawings where required. Steelwork erection rates will be based on historical data or vendor quotes, and adjusted for site conditions.

Piping, Valves & Fittings

Shop and field man-hours will be determined using the estimator’s expertise and historical data. Pipe lines over 100 mm shall be scaled from the model and fittings allocated based on the P&IDs. Allowances will be made for pipe supports, speciality piping inspections, hydro-testing and small bore service piping.

Painting

Painting allowances will be made for pipe-work, structural steel, pipe supports and miscellaneous items.

Electrical & Instrumentation

Electrical equipment, cable, conduit and tray quantities will be determined from equipment lists, P&IDs and general arrangement drawings. Pricing is determined from vendor quotes or historical prices.

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Freight

Costs for inland and ocean freight will be developed for all equipment and bulk material based on quoted freight rates and estimated revenue freight tonnes. Where possible, freight costs for major equipment will be included in vendor pricing and identified separately in the estimate as a freight resource type.

Installation Costs Direct Field Labour Costs

Direct field labour is the labour to install the permanent plant equipment and bulk materials. Direct field installation man-hours are developed, using unit man-hours for each commodity multiplied by the quantity. Adjustments to standard man-hours are via a productivity factor to reflect the specific site conditions (environment, schedule, workplace hazards, etc) of the project.

The direct labour rates used will be calculated, based on a recent Site Construction Agreement for similar types of work. Labour rates will generally reflect actual working hours per week, consisting of 38 hour normal time and penalty rates for all hours in excess of 38 per week.

Labour rates used for estimating purposes include the following wage related components:

• Base wage rates, including All-Purpose payments of wages and allowances not specific to the project

• Flat payments per hour as per the project site agreement

• Site and special allowances specific to the project site agreement

• Statutory allowances, as imposed by government legislation such as leave entitlement, superannuation, payroll tax and workers compensation insurance

In addition, some contractor overhead costs that are directly related to field man-hours, are also included in the site labour rate as a percentage of the above:

• Small tools and consumables

• Construction Equipment

• Temporary Facilities

• Maintenance of Equipment and Facilities

• Site Office Operations

• Contractor’s Site Supervision

• Contractor’s profit and overheads

• Head Office Support

Contractor In-directs

These costs are direct costs so far as the project is concerned and need to be considered. Contractor’s indirect costs include the following:

• Contractor’s mobilisation and demobilisation – includes establishment and later removal of construction plant and equipment (can be up to 5% of the contract price)

• Contractor’s manual indirect and non-productive labour - time spent in inductions, training, toolbox meetings, clean up, crane, truck operators and storemen. These typically equate to 25% of the direct workforce and, although the cost is included in the labour rate calculation, they need to considered when estimating camp sizes and FIFO (fly-in-fly-out) related costs.

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• Scaffolding, safety equipment, personal protection equipment

6.4 INDIRECT COSTS

Indirect costs include items that are necessary for the completion of the project but are not related to the direct construction costs, such as the following:

• Temporary construction facilities and services, including running costs through to hand-over to operations

• Site survey

• Insurances, Bonds & Guarantees covering engineering, construction and warranty maintenance period

• Portable Long Service Leave Levy and Work Place Health & Safety fees and charges

• Major craneage required for heavy lifts not in subcontractor’s scope

• Stores receival and handling facilities

• Spares

• Waste services

• Testing – NDT and geotechnical

• First fills and oils

• Engineering, Procurement and Construction Management (EPCM) costs

• Travel, accommodation, relocation and recruitment

• Establishing Project procedures

• As built drawings

• Commissioning, including vendor commissioning engineers

• Demobilisation of site construction facilities and rehabilitation of those areas

6.4.1 Estimating Methodology for Indirect Costs

Temporary Construction Facilities and Services

Temporary offices, sheds, furniture, power, sewage and water, staff, communications, site vehicles, parking and lay-down areas will be identified and quantified by construction personnel. This will include establishment and later removal of the site compound, support facilities and services.

Spares

Engineering to provide a list of capital spares. Procurement to include request for vendor suggested spares and costs in their enquiry documents.

First Fills and Oils

Requirements to be determined by the Owner for inclusion in the estimate.

Engineering, Procurement and Construction Management (EPCM)

A detailed estimate will be prepared to reflect the current project delivery process and project duration. The estimate will include staffing requirements for both on and off-site activities.

Commissioning

A detailed estimate will be prepared, based on staffing and schedule requirements.

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6.5 PROJECT CONTINGENCY

Contingency will be based on project risk analysis conducted at the completion of the estimate. The risk assessment methodology will be used to assess the accuracy of the estimate and calculate the contingency required to provide the desired probability of outcome against the estimate.

Project contingency does not cover scope changes or project exclusions. Scope changes are covered by the owner’s contingency.

6.5.1 Risk Analysis

A facilitated risk workshop will be held with the project team and selected stakeholders to identify risks and opportunities for the project. The focus of the workshop is the identification of risks and opportunities that will impact the estimated capital value of the project.

Having identified the project specific risks and opportunities, which are easily quantifiable, it is possible to develop a risk model for the project. The model is based upon the capital cost estimate that has been developed for the project and will use, essentially, the same work breakdown structure (WBS). The model is subdivided into two main sections, as follows:

• The estimate, ie the cost of the planned work

• Specific Risks and Opportunities, as mentioned previously

The model uses the capital estimate that has been developed and recognises that there will be a degree of uncertainty in the estimates that make up the project’s cost. To model and analyse this uncertainty in the capital cost risk model, the collective knowledge and experience of the project team is used to develop a three-point estimate to replace the single point estimates taken from the project estimate.

The three point estimate consists of:

• the likely value, i.e. the single point estimate in the project estimate,

• the maximum or pessimistic value, and

• the minimum or optimistic value.

The program @RISK, or similar, should be used to run the simulation of the risk model that has been developed. @RISK uses the technique of Monte Carlo simulation to do a risk analysis.

Briefly, using this technique, the computer generates a distribution of possible outcomes (ie the total project cost including risk) by recalculating the worksheet many times (at least 1000 times), each time using different, randomly-selected values from the three-point estimate distributions selected for each input variable in the estimate.

The output from this analysis will be a distribution of likely outcomes for the total project cost, which can be summarised in a histogram that displays the shape of the distribution and the maximum, minimum and mean values of the distribution.

The histogram will also be graphed as a cumulative probability distribution curve, from which it is possible to directly determine the amount of contingency required to achieve the desired probability of under-running a certain target.

6.6 OWNER’S COSTS

The following items are generally part of the owner’s costs and, as such, are not allowed for in the estimate unless specifically directed and costed by the owner:

• Owner’s team and consultants

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• Owner’s contingency for changes in scope or additional work

• Cost of carrying out the Feasibility Study

• Land acquisition

• Insurances, including builders risk, material damage, delayed start-up, loss of profit and Construction Work Insurance

• Loss of production and efficiency resulting from implementation

• Owner’s start-up and commissioning crew

• Project taxes and permits

• Cost of shutdowns

• Public Liability Insurance and contractors’ All Risk Insurance

• Working capital

• Owner’s staff / operator crew training

Exclusions

The following costs are generally excluded from the capital cost and should be listed in the estimate qualifications:

• GST, Sales Tax and Import Duties

• Escalation

• Schedule acceleration costs

• Schedule delays and associated costs, such as those caused by:

º unexpected site conditions, º unidentified ground conditions, º labour disputes

• Force Majeure.

• Permit applications

• Development fees and approval costs of Statutory Authorities

• Cost of any disruption to normal operations

• Owner’s costs

Foreign currency changes from project exchange rates.

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Comparison of Quality of Estimate Types Item Order of Magnitude Preliminary Control Budget DefinitivePurpose Prelim Investigation. Economic Feasibility Project Approval Detailed Control Project screening Pre-feasibility Bankable Feasibility Target Measurement Comparison of

Alternatives Identify data required & cost of Type 3 Study

Provide basis for securing finance

Change/Variation Monitoring & Control

Risk Profiling & Contingencies - Indicative Probability Range

Up to 30% Not greater than 90%




Accuracy - Indicative Range +50% to -30% +30 to -15% +20 to -10% +10% to -5% Level of Engineering Definition 0% to 2% 1% to 15% 10% to 40% 30% to 100% BASIS OF CAPITAL COST ESTIMATES

Site Location Assumed Preliminary Optimal Final Maps and Surveys None Preliminary Some detail Detail Soil Tests & Geotechnical None Prelim Final Final Site Visits Not essential Desirable Essential Construction

Commenced Construction Support Assumed Proposed method Detail support Final Construction site Agreement Delivery Strategy

Assumed Assumed

Assumed Preliminary

Prelim discussion Initial Strategy

Final / In Place Specific

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Item Order of Magnitude Preliminary Control Budget Definitive Mining Site Visits Desirable Essential Essential Frequent Maps and Surveys Required Good quality Detailed Detailed Drilling Exploration Exploration Delineation Grade control Resource Estimate Indicative Probable Measured/ Indicated Measured Reserve Estimate Indicative Indicative Proven / Probable Proven Mining method Assumed Preliminary Optimised Finalised Mining schedule By analogy Preliminary Detailed Finalised Mine Geotechnical & Hydrology Assumed Preliminary Detailed Finalised Equipment selection Not essential Preliminary Type and capacity Make and model Process Plant Capacity Assumed Preliminary Final Final Ore Samples Available samples Representative

samples Representative samples

Actual

Metallurgical Testwork Commenced Advanced Completed Complete Pilot plant Identify need and

specify bulk sample Commenced, some results available

All results available Finalised

Energy & Material Bal. Estimated Advanced Optimised Final Process Flowsheet Assumed Preliminary Frozen Final Design Scope of Estimate Concept Probable Actual Actual P&ID None Preliminary Frozen Final Hazard Anlysis HAZOP 1 HAZOP 2 HAZOP 3 Equipment Selection Assumed Preliminary Optimal Final GA - Mechanical None Minimum Fair detail Complete GA – Structural None Outline Fair detail Complete Piping Drawings None Single-line Some detail Advanced Electrical Drawings None Single-line Some detail Advanced Detailed Design Drawings None None Some detail Mostly Complete Specifications None Preliminary Advanced Mostly Complete CAPITAL COST ESTIMATE Infrastructure costs: Power, Water, Roads, Rail

Assumed Investigated Finalise Detail Finalised

General Cost Approach Factored block costs where possible

Preliminary Quantity Detail Quantity Detail /Actual Quantity

Major Equipment Costs Data bank / Factored Single source Multiple source Fixed tender Civil Work Rough quantity Preliminary Take-off Tender Prices Structural Work $/unit vol. Prelim take-off Take-off Tender Prices Piping & Instrumentation % machinery Prelim take-off / % Take-off Tender Prices Electrical $/kW Prelim take-off Take-off Detailed Estimates Installation Factored / % Man-hours / unit

rates Man-Hours Man-Hours / Contract

Indirect Costs % of total Prelim calculation Calculation Detail calculation Spare Parts % of total % of total % of total % of total OPERATING COST Staffing Levels Factored Preliminary Detailed Estimate Known Labour costs Factored Calculated Known Basis Known Admin/Management cost eg insurance, taxes, duties etc

Factored Preliminary Final Final

Power costs Factored Quoted Estimated Known Fuel costs Factored Quoted Estimated KnownConsumable supplies Factored Factored Estimated KnownReagents Factored Factored Estimated KnownMaintenance Supplies Factored Factored Estimated Known

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7 Schedule

Achievement of schedule objectives will be critical to a successful project. The ramifications of failure to achieve the objectives will likely involve not only project cost overruns, but also operational disruption (with the considerable associated costs) as well as disruption to third parties.

A project will often be carried out over a series of shutdowns.

7.1 ISSUES AFFECTING SCHEDULE

Usually, the schedule for each shutdown will be controlled by several types of constraints:

• The logical flow of activities i.e. certain tasks need to be completed (or in progress) prior to other activities being able to be undertaken. Generally, the sequence for shutdown activities will be:

º Preparatory works prior to the shutdown º Demolition (if required) and clean down º Structural Modifications and paint touchup º Mechanical Installation and Alignment º Electrical Installation and Point To Point Testing / PLC code installed º Pre-commissioning checks and runs º Belt installation º No Load Commissioning, belt alignment º Completion of guard installation º Load Commissioning

• Resource availability

• Constraints imposed by the work environment eg constricted space, access limitations, limitations imposed by safety considerations, etc

The schedule may be affected to some degree by a number of other factors such as:

• External factors e.g. weather

• HSEC issues or incidents

• Technical problems e.g. errors in design, detailing, fabrication, manufacture, interfaces, etc

• Equipment breakdown or defect.

• Industrial action

7.2 STRATEGIES

The following strategies can be employed to construct a realistic schedule:

• Thorough planning.

• Complete as many tasks as practicable prior to shutdown

• Preassemble components (chutes, drives etc) to the extent practicable

• Prepare jigs where possible (e.g. mechanical baseframes to structure)

• Minimise errors (e.g. through planning, checking and reviews)

• Control damage when undertaking site modifications.

• Maximise number of concurrent activities, but don’t overcrowd

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• Maximise accessibility (through scaffolding, JLG’s etc)

• Plan crane usage so that craneage does not impact schedule.

• Touch up paint systems that minimizes impact on schedule

7.3 SCHEDULING PRINCIPLES

Some principles on development of the schedule:

• Be realistic with expectations.

• Build the schedule ‘downwards’ from major activities to the detail, rather than the opposite – i.e. don’t get bogged down in complexity and detail.

• Build as much flexibility into the schedule as possible – avoid unnecessary logic linkages. Overly complex schedules can be a problem to manage during shutdowns.

• Provision of resources considered, as this may be a limiting factor.

• Look for constraints that can affect productivity e.g. confined work areas, restrictive workfronts.

• Develop a commissioning schedule. Allow contingency in this schedule for fine tuning of the system or the possibility of modifications.

• Track schedule daily during the shutdown phases of the project.

• Don’t ignore the potential impact of time-consuming but often considered ‘secondary’ activities e.g. blasting and touch up painting, fitting up of guards etc.

7.4 SCHEDULING OF ENGINEERING

Engineering tasks are highly interactive so conventional scheduling will not usually capture the complexity involved. The first issue is to focus on the inputs to the engineering process e.g. site investigations, surveys, simulations, vendor data to make sure they are available in a timely manner.

The engineering schedule should define the activities to make up the deliverables and milestone dates.

7.5 MONITORING OF SCHEDULE

The schedule should be monitored regularly and updated versus the baseline schedule as required. Progress should be recorded at least monthly.

8 Procurement

8.1 CONTRACTING APPROACH

The following decisions may be applicable:

• Nature of Contract(s)

• Selection of Contractor(s)

• Separate contracts for Structural / Mechanical and Electrical Packages or let as one contract?

• Let the contract in stages

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8.2 NATURE OF CONTRACT

Several options for the type of contract are available as follows:

Strategy Pros Cons

‘Hard Dollar’ (probably with some SOR for commissioning activities)

• $ known

• Design and scope largely known

• Owner standards, procedures and documentation in place

• Timeframes not set

• Dealing with failure of contractor to perform

• Risk included in Price

• Focus may be on protecting contractual position.

Schedule of Rates • As less risk to contractor, cost may be reduced

• Unknown Total $

• No Incentive for Contractor to save $

Partnering / Alliance style

• Flexibility in certain areas

• Allows more scope for Owner to have input into project direction

• Focus is less on contractual issues.

• Contract documentation needs to be developed.

• Nature of project and risk profile not necessarily suited to this style of contracting.

• Design and procurement complete, so limited benefit

• Time / effort to Implement and administer

• Issues when multiple contractors

Several contractual issues to be considered in the development of the contract may include:

• Timely delivery of the project.

o What penalties, if any, will be imposed for late delivery?

o How will Practical Completion be defined?

o How will delays be managed, given the short timeframes involved in shutdowns? If the standard notification periods apply, the shutdown could well be complete prior to resolution of delays.

o How will the risk profile associated with delay issues be allocated and managed eg inclement weather, problems with items procured by the Owner, latent conditions, delays caused by other contractors, etc.

o If penalties are large, the Contractor is likely to be looking for any opportunity to gain an extension of time and avoid penalty charges

• What incentives, if any, will be offered?

• How interfaces between struc/mech and electrical contractors will be managed.

• Dealing with a number of shutdowns over an extended timeframe – This may involve Rise and Fall issues, lead time notification issues prior to each shutdown, delays in giving access to site etc.

• Latent Conditions (e.g. unknown condition inside of Structures)

• Insurances

8.3 CONTRACTOR SELECTION STRATEGY

The successful contractor should not be based on price alone – the ability of the contractor to deliver on all the key project objectives should be considered, including such aspects as:

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• Capability

• Recent past performances in respect of HSEC, quality, timely delivery, etc

• Attitude

• Availability of resources at key times including supervision

• Past experience / relationship with Owner

• Other Projects in hand

8.4 SEPARATE PACKAGES FOR STRUCTURAL / MECHANICAL AND ELECTRICAL

There are pros and cons in having separate packages for the structural/mechanical/electrical works including the following:

Strategy Pros Cons

Separate Packages • Owner controls selection of Electrical Contractor

• Faster process for tendering

• Interface issues become Owner’s risk

• Schedule interfaces to be managed by Owner.

Combined Package • Less administration for Owner

• Interface issue becomes Contractor’s risk (but not totally!)

• Loss of control of Contractor selection

• Slower tender process

• No guarantee that Contractors will manage interfaces, including schedule interfaces.

8.5 PRE-ORDERING OF MATERIALS OR PRE-PLACING OF NOMINATED SUB- CONTRACTS

It is sometimes advantageous or necessary to place orders for materials or nominated sub-contracts in advance of the letting of the main contract in order to save time. There are, however several matters to be considered before a decision is made to pre-order materials. A great deal of work is involved in seeking quotations for the supply and shipment of materials. A contractor's buying department may be more experienced in this work. The Owner must understand that if materials are delivered prior to the award of the Main Contract the responsibility for their care and protection must be his until they can be handedover to the Contractor. When drawing up the Contract Document it must be made clear that the Contractor will assume full responsibility for these orders once he has been awarded the Contract. The option of pre-ordered materials being delivered free on site to the Contractor has in it the possibility of breach of contract by the Contractor, should the Supplier fail to deliver at the specified time. For Nominated Sub-Contractors special care must be exercised in drafting Nominated Sub-Contracts prior to the award of the Main Contract to see that all possible obligations of and to the Main Contractor are covered.

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8.6 PREPARATION OF TENDER DOCUMENTS

In preparing a tender document it must be remembered that the aim is to get a sound competitive price, fair to both parties, for changes in the works or conditions. The three most important things to bear in mind are:

• The document must state the requirements clearly and be easily understood by tenderers.

• Risks to be taken by tenderers must be defined as clearly as possible, e.g. all relevant information available to be given to tenderers without disclaimers but differentiating clearly between factual information and derived opinion.

• The document should be in such a form as to make it easy for tenderers to price and return.

8.7 ORDER OF SECTIONS

i. Cover and fly sheet ii. Instructions to Tenderers iii. List of Contents iv. Scope of Work v. General Conditions of Contract vi. Particular Conditions of Contract vii. Specification viii. Bills of Quantities and Summary ix. Schedules (to be completed by Tenderer) x. Form of Tender and Appendix xi. Forms of Agreement and Bond

8.8 CALLING TENDERS

It is in the interests of the industry, in keeping prices down, to restrict the number of tenderers. If there are less than six tenderers, it is wise to arrange for confirmation from them (a week after receipt of documents) that they will be submitting a tender.

Selective tendering is normally the best procedure because the Contractor has been chosen for hissuitability. The selection will depend on past experience, financial backing, capacity for work at thetime and ability to allocate resources to the job. If there are any doubts about a contractor, enquiriesshould be made when selecting them - from previous Employers and/or consultants. Contractors can be invited to pre-qualify; the invitation will be by an advertisement in the newspaper and may be supplemented by letters to individual contractors. The advertisement should be inserted well before the tender documents are due to be issued and should ask interested contractors to apply for pre-qualification. The tendering procedure should be such as to help tenderers to the maximum. The problems of tendering should be considered and every means taken to ease these problems, ensuring that tenderers can easily understand what is required - with the object of obtaining sound and competitive tenders with the minimum of risk. Documents should be clear and easy to fill in and return. For instance, it is much easier for tenderers to have electronic documents rather than paper copies. The part of the document that is to be returned should be made as easy as possible to fill in, e.g. with schedules where information is definitely asked for; tenderers should be sent additional copies of this part of the document to return, i.e., Bill, Schedules and Tender

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However carefully a document is prepared, there are bound to be queries from any serious tenderer and a suitable procedure should be set up for answering these, and informing other tenderers. Wherever possible, tenderers should visit the site and generallt at a time arranged by the representative of the Engineer. At this time he will generally provide project background, overview and answer tenderers' queries to the best of his ability and take note of others for written response. In any case, tenderers should be given an opportunity to inspect the site and talk to the representative privately, but answers given to queries must be recorded and subsequently made available to al tenderers. Tenderers should also be given a date by which time they shall submit any queries in writing. All tenderers (within a week of that date) will be sent a complete list of the questions together with answers (grouped under sub-headings). This is also a useful time for clearing up any errors discovered in the tender documents. Sound tenders cannot generally be expected if insufficient time is allowed for their preparation. Generally, two months should be allowed. This time can be shortened in some cases - down to one month in the extreme but, if this is done, steps must be taken to feed the tenderers with advance information, e.g. the date of issue of the documents, a description of the project, any drawings or other information which is available before the issue of full tender documents.

8.9 TENDER EVALUATION

8.9.1 Assessment of Tender Submissions

Normally assessing suitability of contractors is done during the pre-qualification. If however tenderers have not been pre-qualified, the necessary information should be made available with the tender; assessment of this information is then carried out as if the tenderer were pre-qualifying. Assuming then that each tenderer has demonstrated their capability for doing the work, scrutiny of the tenders is limited to assessment of:

• the price and the time for payment programme

• method

These criteria cannot be taken individually as they interact, one upon another. Thus, it is necessary to consider the effect of the programme on the cash flow and the method on the programme.

Only in exceptional cases do all tenders need to be studied in detail; normally detailed studies can be restricted to those of the lowest two or three. Nevertheless, it is often informative to read through the proposals of all tenderers and to summarise the main points such as major items of plant, size of labour force (man months) and time for completion. Having then decided which tenders are to be studied in detail, the procedure is as follows:

a) Supporting Information:

Check that all the items called for have been submitted by the lower tenderers. b) Rates and prices:

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The tenderer's proposed rates and prices must be carefully examined to see that reasonable allowance has been made for all parts of the work and that the tender is balanced so that changes in conditions and quantities would not react unfairly.

Make an arithmetic check* of all tenders except for those clearly not in the running.

The tenderer's ability should be assessed by comparison of his tender proposals with those of other contractors and with the Engineer's own estimates.

c) Programme and method statement:

The times proposed for each part of the work should be compared and, serious irregularities picked up.

At this stage it is important that any delays required in the construction e.g. for settlement of filling material etc. are checked.

d) List of plant and labour chart:

Again comparisons between tenderers can show up irregularities and indicate the importance given to the work by the tenderer, e.g. the provision of standby equipment.

e) Organisation and staff proposed:

Special care should be paid in assessing the tenderer's proposed site management and head office back-up. The success of most jobs depends on the site management and on the importance attached to the job by the contractor's head office.

f) Scrutiny of documents:

It is important that any discrepancies or ambiguities in the documents should be clarified at this stage. The Appendix to Tender and the Schedules should be examined to ensure that all blanks have been completed; the Schedule of Basic Prices should be compared with any supporting quotations to ensure that the rates are unambiguously set down. Any additions or interlineations made in the Tender Document by the tenderer should be discussed with the tenderer to ensure they are fully understood and that no ambiguities result.

8.9.2 Meetings with Tenderers

Having studied the tenders, it is often felt that a firm recommendation cannot be made without meetings with the lowest, or lower, tenderer(s). Such meetings normally serve to clarify points thrown up in the scrutiny of tenders, but almost invariably include:

xii. Discussing any qualifications to the tender. xiii. Considering staff and plant availability, with particular reference to an early start. xiv. Assessing the proposed site and head office organisation. xv. Assessing the tenderer's commitment to the job and the importance he will attach to

it. xvi. Questioning the tenderer on existing, and likely future, workload. xvii. Considering any possible design revisions, and their effects on the tender. xviii. Requesting data to support Basic Rates.

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8.9.3 Reporting on Tenders

A Tender Report, like any other report, must aim at presenting the essential evidence and conclusion in a brief readable form. Perhaps the most important requirement is for the writer to put himself in the position of the Owner receiving the report; the latter is usually interested in overall cost and time.

In preparing the Report, the interests of the Owner should be considered carefully and all pertinent information given, e.g. if the recommended tender is well above the estimate, the Owner may well require a revised estimate of other allied work before he can decide whether to award the contract.

The Report should be brief, including only matters having a major effect on time or money. Detailed comments and comparisons should be attached as appendices to aid the Promoter's technical/financial departments, and our own staff.

8.10 AWARD OF CONTRACT

The Letter of Acceptance of the Tender, setting out any agreed conditions or provisos, may be sent in draft to the Owner with the Tender Report. It should include the statement that all subsequent directions concerning the Contract will be issued by ASPEC and that all further correspondence in connection with the Contract should be addressed to him. The Letter of Acceptance may alternatively be issued by ASPEC, on the written authority of the Owner, provided that the existence of such authority is made known. It is necessary in either case that the letter should be an unequivocal acceptance of a final offer by the Contractor, or a confirmation of his acceptance of a final offer made by the Owner. The Tender and the Letter of Acceptance form a binding Contract between the Owner and the Contractor but many Owners require formal Agreements to be entered into. It may be necessary to ascertain from the Owner if he requires contracts made by him to be under seal. Where such a Contract Agreement is required the formal document should contain:

• Letter of invitation.

• Instructions to Tenderers.

• Covering letter to Tender.

• Completed Tender with schedules and enclosures.

• List of drawings if not included elsewhere.

• Amendments and clarification to Tender Document.

• Minutes of Meetings and correspondence.

• Copy of Performance Bond

• Letter of Acceptance.

• Letter of Instruction to Commence or Notification of Date for Commencement.

The letters to be bound into the document should be examined and any handwritten notes or comments on original letters should be obscured before reproduction. Minutes of meetings should be read through to ensure that, as far as possible, the statements made are not open to misinterpretation later on by persons who were not present at the meetings.

It may be necessary to have a final exchange of correspondence or a meeting with the Tenderer to

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resolve any matters arising from the scrutiny of the documents.

Sometimes between the acceptance of the Tender and the signing of the formal Agreement variations are made to the Works. It may then be necessary to decide whether to incorporate the variations in the final Agreement, which has the advantage in dealing with any claims which might otherwise arise

Two copies of the Contract Agreement have to be signed (and sealed if required) and exchanged by the contracting parties. One document is for the Owner, one for the Contractor

8.11 EXPEDITING AND INSPECTION

Expediting is essential for construction planning as timely delivery of equipment and materials reduces potential penalties in not meeting construction completion dates. Expediting involves physical verification of the vendor's progress against identified milestones including:

• Approval of engineering documentation

• Receipt of sub-ordered material

• Fabrication schedules

• Inspection intervention

• Final confirmation of delivery date

• Outstanding action points have been taken and completed

Inspectors need to work with vendors to fulfill:

• Review of materials for code compliance

• Review of welding procedure specifications and welding operators qualifications, for Owner and "Code" compliance

• Inspection of sub-assemblies and finished items for appearance, workmanship, dimensions, surface conditions and operability

• Witnessing of any and all required tests forcompliance to approved drawings, procedures and specification including factory acceptance tests

• Final inspections prior to dispatch which may include cleaning, coating, packing and marking of equipment, review of vendor final documentation dossier

8.12 PACKAGING AND TRANSPORT

Packaging and transport of goods and vendor items to site needs ongoing attention during the project. Issues include

• Packaging providing suitable protection

• Method of loading and unloading

• Method of shipment

• Shipping schedule

• Consolidation of shipments.

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• Suitability of lifting points

• Oversize loads

• Turning circles for vehicles

8.13 RECEIPT OF GOODS

Protocols need to be in place for recording and accepting vendor items and goods as they arrive at site.

Arrangements need to be made for unloading and storage.

8.14 CERTIFYING PAYMENT

A Construction Contract will involve the Owner making progress payments at regular intervals or on the achievement of performance milestones. Progress payments require the assessment of the amount of work completed – in a stipulated price contract, the percentage completed out of the total scope of the work; in a cost-plus contract, the value of the work to date. ASPEC is identified and recognized as the Consultant by the general contract between the Owner and the Contractor. Although the Consultant is usually hired by the Owner and acts as the Owner's agent for many purposes, the Consultant is required to act impartially in certifying payment and completion and in otherwise performing the function of the arbiter in the first instance of the requirements of the general contract. This means that the Consultant must interpret and apply the terms of the general contract fairly, rather than for the advantage of the Owner (or the Contractor), in determining payment and holdback amounts and the achievement of substantial completion.

Construction contracts usually set out a detailed process for the project participants to respectively claim, assess, certify and pay progress claims. Generally, the certification of payment is intended to provide a legally enforceable right to payment for the Contractor, once the contractual time period has expired for the payment to be made after certification. However case authority confirms that this is not an absolute right and can be subject to other provisions set out in the contract or which are implied by the common law, and which entitle the Owner to set off against certified amounts the value of the Owner’s claims of contractual default by the Contractor. Sometimes a Consultant determines that a payment certificate previously issued needs to be revised, in order to reflect accurately the circumstances prevailing under the contract. If motivated by new information or other reasonable justification, such revision is not only a proper, but a necessary, step for the Consultant to take In addition to analyzing the extent of the completed work, the Consultant must also factor into payment certificates any applicable holdbacks. These can include lien holdback deficiency holdback and any additional special holdbacks called for by the contract.

9 Health Safety Environment & Community (HSEC)

The achievement of HSEC objectives will be critical to the success of the project.

This is not intended to cover every HSEC issue that may arise as part of the project – it is anticipated that more detailed reviews will be undertaken as part of the development of the HSEC plans for the project.

The following major areas should be addressed:

• General safety considerations: These apply to most work sites, and should be addressed as part of any general safety plan.

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• Environmental concerns and requirements: both the project level and at the site level during construction need to be managed . Community concerns are normally managed by the Owner.

• Shutdowns and operational site environment:

o Role of Principal Contractor: The scope of the role should be clear, particularly for work phases where the Principal Contractor may possibly not be coordinating the main activities e.g. during commissioning.

o Delineation of workzones: The boundaries between the construction site and the operational site should be clearly delineated and all affected parties made aware of the boundaries.

o Dealing with the various project phases: Because of the operational status of equipment, electrical systems and PLC systems during the commissioning and operational phases, specific safety considerations need to apply to these phases. All parties need to be aware when systems or equipment become ‘’live’.

o Communications: Good communications protocols assume a far greater importance during a shutdown, because of the rapidly changing nature of the work environment (eg between shifts), the number of workfronts and disciplines, and the possibility that the program of work can change at short notice. The development of a communications plan to manage this is recommended.

o Fatigue and time pressures: These factors can play a key role, particularly towards the latter stages of a shutdown, not only on the workforce but also on the supervision and management teams. Adequate resources and good prior planning can help manage these issues.

• Key work areas of the project - can include the following:

o A number of other safety issues need to be considered including elevated working temperatures, ventilation, noise, lighting, fire, access, emergency egress, handling of materials, people working above and so on.

o Specialised activities or installation of specialised components: Specialised activities can include demolition, structural modifications, etc. Specialised components can include conveyor belts (including belt splicing), chutes, drives, control room, sampler, stockpile discharge feeders and coal valves, etc. Specific Work Method Plans and hazard identification and management processes should be developed for these activities.

o Work of a confined and restrictive nature of the workplace in conjunction with the number of activities required to be undertaken necessitates a separate evaluation of the work.. As above, specific Work Method Plans and hazard identification and management plans should be developed for all activities.

• commissioning phase - Because of the ‘live’ system status, safety during the commissioning phase needs to be analysed and reviewed as a separate element in its own right. Commissioning procedures should be developed for each system, together with appropriate hazard identification and management processes.

• operations and maintenance - Adequate guarding, access for operational monitoring and maintenance, and operating and maintenance procedures are all safety elements that should be considered as part of the design.

Based on the above, the safety plan/s developed for the project need to be specific (i.e. not just a generic document), covering at least the main aspects identified above.

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Additionally, in order to more comprehensively review the safety aspects of the project than is possible in this review, as well as include aspects associated with the electrical scope of work, operational considerations and so on, a risk review workshop involving the project participants is recommended prior to the shutdowns.

10 Construction Supervision

10.1 CONTROL AND SUPERVISION OF THE WORKS

The role of ASPEC is to observe and supervise the Works and as long as the Contractor is carrying out the Works in accordance with the Drawings and Specification it should not be necessary to intervene. However, ASPEC must look out for issues, backed up by daily diary entries, which will warn when something is wrong with the pattern of work in progress or completed due to changes in materials, errors in setting out, discrepancies in drawings, weather conditions, method of working, alterations or accidents so that the necessary action can be taken without delay.

10.2 KEEPING RECORDS

The daily, weekly and monthly records of progress are the means by which ASPEC can compare current performance with earlier productivity and identify the cause of any change in the tempo of operations. They enable past incidents to be referenced when staff have changed and memories have faded. The important records are the following:

i. Complete site records of labour, plant, weather, work done and broad deployment of

labour each day.

ii. Records of discussions and meetings and decisions taken on suc matters as:

o Authorisation of variations, daywork, etc.

o Payment for variations

o Methods of working

o Order of construction,

iii. Records of "matters of fact" for claims or potential claims.

iv. The effect of weather conditions, delivery of materials, plant availability, labour shortages, etc. on productivity and progress.

10.3 KEEPING CONTROL

ASPEC must retain the initiative and avoid a backlog of unresolved problems.

Decisions should be given promptly on queries raised by the Contractor on variations, daywork or claims where necessary. Minor matters which are within the delegated authority should be resolved by the issue of a Daywork Order or agreement on the measurement of the work in Bill Items. If ASPEC does not accept the Contractor's submission, clearly stated reasons should be given to the Contractor. The contractor may then choose to pursue this further through the dispute resolution provisions of the contract.

The Resident Engineer must be fully aware of what is happening on site and should keep a close watch on the Contractor's methods. When it appears that the methods employed or proposed may not achieve the required result, they should be discussed with the Contractor’s Representative.

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It is important that ASPEC should avoid direct dealings with sub-contractors. The Main Contractor may try to evade his responsibility but the Resident Engineer must insist that he takes the necessary action with the Sub-Contractor.

10.4 ADMINISTRATIVE PROCEDURES

The forms and procedures set out below will assist in the proper control of the Works.

a) Construction Drawings

The Resident Engineer is to keep a drawing register of all drawings prepared on site. The register should show where the drawings have been sent, and the date of issue. Drawings received from the Contractor should also be registered and copied to the Project Engineer.

b) Site Instruction This may be issued by the Section Engineer and be confirmed in due course by the Resident Engineer. The Resident Engineer must take great care that neither he nor his staff gives "Instructions" to the Contractor which might be interpreted as "Variations" unless that is the specific intention. Any directions given to the Contractor should be confined to clarification and guidance. The Contractor should not be instructed to use any particular method or to produce any result other than that specified unless there is an overriding and essential reason for so doing.

c) Daywork Order

This is completed and issued by the Section Engineer and checked by the Resident Engineer.

d) Oral Instructions

If it is necessary to issue an oral instruction, written confirmation must be sent within 24 hours.

10.5 PROGRESS MEETINGS

Progress Meetings should be held at least once a month. They need not be formal but the Resident Engineer and the Contractor’s Representative should be present. If either is unable to attend they should be represented by a deputy with adequate authority. The purpose of the meeting is to review progress since the last meeting and to give the Resident Engineer and the Contractor’s Representative an opportunity to discuss problems and give formal agreement to matters concerning the Contract. The Resident Engineer should take the Chair and be responsible for ensuring that speakers keep to the point and that clear decisions are reached.

The minutes of the meeting should be prepared by a member of the Resident Engineer's staff. If agreement with the Contractor on any point cannot be reached, the RE should have his own version included in the minutes and the Contractor should have the opportunity to record his views. The minutes should be distributed to all present and copied to the Project Manager, Engineering Manager and Project Principal.

10.6 SITE RECORDS

The site records should be kept neatly and follow as closely as possible the prescribed form wherever this has been given. They should include the following:

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Diaries RE's Staff Reports Daily Weekly Monthly Drawings Progress Charts Site Instruction or Detail Drawings Construction Method Measurement As-Constructed Record Registers Site Drawings Drawings received and issued Correspondence Daywork Orders, Variation Orders and Provisional Sum Orders Cement, concrete, soils etc. Files Correspondence Interim & Final Measurement Calculations Miscellaneous Survey field books Job notes Progress photographs Contractual Labour & plant returns Daywork sheets Contract Price Fluctuation details

In addition to the above, more specialised records may be needed on certain contracts, for example prestressing records and concrete testing results. Where quality control of concrete is important, the results of tests should be analysed by statistical methods, On some contracts grouting records may be necessary and on others, pile driving or soil testing records.

Where the construction method is of particular significance or interest, drawings issued by the Contractor or drawings prepared by the Engineer showing this should be retained.

Often the necessity for additional records can be inferred from the Specification but the Resident Engineer must use his own judgment to decide what will be necessary. However, he should avoid keeping a multiplicity of records that serve no purpose other than giving his staff more work to do.

Diaries

The Resident Engineer should keep a diary of day to day incidents, interviews and conversations on the job. This will be useful in establishing facts to refute or agree the Contractor's claims which may not be submitted in detail until a much later date. Entries in the diary may also prove of value during enquiries or investigations which may be held, possibly after the Contract has been completed. The Resident Engineer should ensure that diaries are kept by his assistant engineers; these diaries should record details of the execution of the construction work with which each is individually concerned.

10.7 DAILY REPORTS

Inspectors should be required to write daily reports. On large contracts these reports would be submitted to the appropriate Section Engineer - on smaller contracts either to the Senior Assistant

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Engineer or the Resident Engineer, as he may think fit. The reports should show the number of men, skilled and unskilled, employed and the plant used on each section of the work under the Inspector's supervision, the operations carried out, the state of the weather, time lost due to bad weather, plant breakdown or any other cause, details of labour, plant and materials used on daywork and any other relevant matters.

The Resident Engineer should see that at least one maximum and minimum thermometer is installed by the Contractor, and the Inspector should include daily readings of maximum and minimum temperatures in his report.

On maritime contracts the Inspector's report should contain daily reference to the state of the sea and tides and note the height of any exceptional tides.

10.8 PROGRESS PHOTOGRAPHS

Photographs of the site should be taken before work has commenced. These should be followed by progress photographs taken at regular intervals, and wherever some important part of the work is about to be covered up or otherwise becomes impossible to photograph.

10.9 LABOUR AND PLANT RETURNS

The Resident Engineer should arrange for the Contractor to send weekly returns of all labour and plant employed each week on the Works. These may be copies of the returns the Contractor sends to his own Head Office. The labour return should show the number of each trade employed.

The plant returns should give details of all plant brought to or removed from the Site during the week and should show the number of hours attributable to breakdowns or idle time.

10.10 WEEKLY REPORTS

The Resident Engineer is to send to the Project Manager, Project Principal and Owner weekly progress reports. The object of weekly reports is to keep each other broadly up to date with the state of the Contract without going into great detail. The reports should state the percentage completion of each section of the Contract and the state of progress of the work. The Resident Engineer's comments on the general state of the Contract are regarded as an essential part of weekly reports.

10.11 MONTHLY REPORTS

The Resident Engineer is to send each month a progress report to the Project Principal and Owner. It should give a brief precis of the work done during the preceding month. The Report should state the percentage completion of each stage of the Contract and the overall percentage completion.

If the Contractor is failing behind schedule the Resident Engineer should state in the report why this is happening, what the Contractor is doing to remedy this, and anything further the Resident Engineer considers the Contractor ought to do to ensure timely completion. Again, the Resident Engineer 's comments on the state of the Contract are essential.

Prompt submission of reports is essential. Information not available at the time of submission should not be allowed to delay the issue of the report.

10.12 PROGRESS CHARTS

A Progress Chart marked up to show the latest progress, will be sent with each Monthly Report.

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10.13 MEASUREMENT DRAWINGS

Measurement drawings may be required to record the amount of work executed at the time of measurement. These are usually necessary in the case of earthworks and piling, but the information required can often be shown on the progress drawings or the 'As-constructed' drawings, thus making the preparation of separate measurement drawings unnecessary.

10.14 'AS-CONSTRUCTED' DRAWINGS

The Resident Engineer will maintain an accurately marked up set of drawings with all the additions that are necessary to show the work actually carried out and relevant dimensions, levels and changes from the Contract Drawings.

In general, 'As-Constructed' drawings will be prepared from a copy of the latest issue of the appropriate working drawing, which is to be specially reserved for this purpose and amended in red ink with 'As-constructed' details as the work proceeds. All actual foundations, dimensions and levels must be recorded. A list showing all the 'As-Constructed' drawings prepared is to be sent to the Project Engineer at the end of the Contract.

From the Owner's point of view the most important details are those involving maintenance and which have become inaccessible, i.e. drainage, services, certain built-in parts. The 'As-Constructed' drawings will also serve in the preparation of final quantities and should carefully record final levels of excavation and deliberate or unavoidable changes to pay lines.

At the completion of the Works the design office should be supplied with a complete set of 'As-Constructed' drawings consisting of:

I. Working drawings marked up with alterations to make them 'As constructed'. II. Special drawings.

III. Working drawings which have not been altered and are simply marked 'As-constructed'.

The above three classes of drawings should form a complete set covering the Works.

10.15 JOB NOTES

It is important to pass on experience gained on site which is likely to be useful in future contracts, particularly that experience which is likely to lead to greater safety, speedier construction or savings in cost, improvements in appearance etc.

The following should be included:

a) notes on modification of the methods of construction proposed in the tender, and the reasons,

b) notes on particular constructional difficulties arising from the design, c) notes on novel materials, equipment or methods of construction, d) a bar chart of the Works as carried out, with notes of maximum and average

rates of progress where possible, (brief notes on the main reasons for delays or accelerations should be given),

e) notes on inconsistencies, omissions or difficulties in the Contract f) Document, including suggestions for improvement of Conditions of Contract,

Specifications and Bills, g) comments on the Contractor's organisation as affecting costs together with the

approximate total man-days worked,

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h) any other suggestions or ideas which could result in improvements in future

contracts. Such notes can be invaluable and it is important that, whenever possible, they are prepared as the work proceeds and sent to HO during the course of the Contract rather than being left to the end. Surveys Survey field books must be numbered consecutively and contain a contents list. Each survey is to be dated and bear the name of the person carrying out the work. Calculations must be kept in a file signed by both originator and checker.

Operating and Maintenance Instructions The RE should prepare draft operating instructions, with drawings and diagrams as necessary, for submission to the Project Engineer

Disposal of Records On completion of the Contract the Resident Engineer is to dispose of all drawings and documents in accordance with the following schedule:

10.16 NOTATION FOR DEGREE OF PERMANENCE

The symbols below represent classification of project records as a general recommendation and may, at the Principal's discretion, be altered - and separate provision will be made for such records as Specials.

LEGEND

P Permanent PE Permanent Electronic T Temporary (retained until settlement of final measurement

claims, fees, and issue of Maintenance Certificate, whichever is latest

C Current - to be destroyed after immediate requirement is complete

R Reference (Books, journals, papers, maps, etc.)

DRAWINGS Records from Site Office

Site drawings PE

Site and design drawing prints C As-constructed drawing PE Measurement plans and sections (where not incorporated into

'As Constructed' drawings) PE

Measurement plans and sections (other than above) T Survey drawings, holland backed P Drawing Registers P Progress Charts and drawings T Records from Head Office or Site Contractor's and Suppliers'

drawings (where original preserved by others) PE

Contractor's and Suppliers' drawings (where original NOT preserved by others)

T

Owner's drawings (e.g. layouts with continuing value) PE

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Owner's drawings, generally T Charts, maps, etc, R

10.17 TECHNICAL AND CONSTRUCTION ISSUES

10.17.1 General Constructability Issues

Some relevant constructability issues which should be considered include: 1. Handling of components:

• All components should be handled with care, particularly equipment and chutes. Check that lifting lugs are provided for these items.

• Crane lift studies should be undertaken for all key lifts in each work area.

• Handling of bin liners within the Outlet Bin should be considered in conjunction with access requirements to prevent possible clashes.

• Handling by rigging equipment will be slow, so should be well coordinated.

2. Accessibility: Access issues are an important issue in constructability.

Some considerations:

• Ensure components can fit through access openings (e.g. tanks, valve, pumps, liners into bin etc) or can be maneuvered into position.

• Steelwork components should be checked to ensure that they can physically be maneuvered into position.

• There may be areas where access for touch up paint is a problem once a structural element has been welded into position.

• Managing working at height, confined space and energy considerations

3. Installation / assembly of components Many components e.g. drives, conveyor components, etc. are standard within the industry and should be able to be readily installed / assembled by a suitably skilled and experienced contractor. Additionally, supplier representatives should be available if required.

Some considerations:

• Structurally, issues will relate fitting up new members to an existing structure, meaning a considerable amount of site fitup involving insitu welding and touch up painting.

• Distortions from welding should not present major issues except where tight tolerances are involved. To this end bolt holes for machine bases to drives should be drilled after welding of the base support steelwork.

• Care should be taken to suitably brace structures during structural work to ensure structural stability. Belt tensions should generally be removed prior to structural modifications.

• The structural elements should be reviewed to ensure that physical access is available to each weld.

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• Tolerance requirements for equipment should be considered in the context of the design requirements. Good survey is important in ensuring proper alignment of conveyor components.

4. Specialised processes or assembly requirements: Some elements will require additional planning because of the specialized nature of the activity or resulting from other factors. These may include:

• Belt removal, installation and splicing,

• Demolition or removal activities

• Control Room installation

• Dozer protection activities

• Sampling system

• Stockpile Discharge Feeders, Coal valves and associated components.

• Liners to Outlet Bin – trimming and welding.

• Chute installation

5. Damage caused by construction activities should be kept to a minimum where practicable:

• Care to be taken to prevent damage to equipment, or other components.

• Avoid unnecessary damage when cutting and welding. Use protection where required.

10.17.2 Materials of Construction

. Materials shall be appropriately identified and where necessary specific requirements be developed.

10.17.3 Quality Control Issues

Some procedures and forms may need to be developed for specialized proprietary equipment.

10.17.4 Defective Equipment

Defective equipment can present a very high risk to achieving a successful shutdown, particularly as any internal defects will likely remain hidden until commissioning (or possibly during operation).

Some possible methods to mitigate against defective equipment include:


Defective Equipment Issues

• Predelivery tests completed • Equipment that has remained idle in the laydown yard for some time is

checked • Check interfaces (refer to ‘Interfaces’ section) • Handle equipment with care – lift only from specified lift points • Identify how components can be removed if needed • Review the equipment list to identify the critical components i.e. those

components which, if in error, would be costly to rectify or incur significant time losses to the schedule and examine these thoroughly or develop contingency plans.

• Availability of supplier to be on hand during commissioning. • Consider spare components

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10.17.5 Commissioning

Commissioning is a specialised process requiring careful planning in order to be effective.

Some possible strategies to deal with commissioning issues:


Commissioning Issues

• Ccomprehensive commissioning plan in place

• Utilise a commissioning engineer / manager

• Have key suppliers on hand to assist in commissioning of equipment.

• Competent commissioning team is in place, trained and prepared.

• Communications systems are in place.

• Contingency plans in place for key elements – e.g. dealing with chute blockages, any modifications required.

• Stage 4 HAZOP?

10.18 PERSONELL AND EQUIPMENT

Personell will play a key role in the timely delivery of the project and the following are likely to be required or be available during the project:

• Project Management and Supervision

• Trades Personnel

o Fitters

o Crane operators, Riggers, Dogmen, Scaffolders

o Boilermakers, Welders

o Electrical

o Hydraulic, Pneumatic Fitters

• Specialists

o Safety, Quality advisors

o Designers

o PLC Specialist

o Equipment specialists (e.g. stockpile feeders and coal valves)

The following resources and services are also likely to be required during the project:

• Plant and Equipment

o Craneage

o Rigging gear

o Access – Boom lifts, scaffold

o General Equipment – Welding Machines, compressors, generators

o Belt reelers / belt splicing equipment

o Lighting

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• Temporary Materials

• Services – Water, Air, Power

In relation to resources, several aspects should be considered:

• How many personnel, other resources are required, and for how long?

• Capability (skills) and experience of personnel

• Appropriateness of plant and equipment for the task required.

• Availability and source of personnel, plant and equipment, services, etc

• Reliability of plant and equipment, services, etc

Some project-specific issues which might arise in a retro-fit situation are:

• Relatively short timeframes of shutdowns may require numbers of resources to ramp up and down quite quickly.

• Numbers of workfronts and associated interfaces between personnel in different disciplines may need to be managed.

• The number and uncertainty of timings of shutdowns may affect availability and carryover of personnel between shutdowns, with some associated loss of project learnings.

• Sources of services may need to be identified.

10.19 PROJECT ENVIRONMENT

Accessibility

Accessibility issues generally relate to constricted working environment and confined spaces or difficult to access locations e.g.:

• Inside and around Bins

• Inside Tunnels

• Working at heights.

Consideration should also be given on ability to remove components (eg pulleys, chutes in the event that removal is necessary for rework or repair.

Limitations by operational activities

The site operational activities may impact on the project:

• Available lead time from an operational perspective.

• Likelihood that shutdown start dates may change at short notice.

• Are there any possible impacts from operational activities during shutdowns?

Location and Logistics issues:

Some issues may need to be considered:

• Availability of local resources

• Accommodation for personnel sourced away from the local area.

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11 Contingency Planning

Contingency Planning covers the eventuality that the project objectives are not being achieved. Consideration should be given to development of a contingency plan for each of the following situations:

• Significant cost overruns

• Significant time overruns

• Significant weather events / ‘Acts of God’

• Significant performance or reliability issues

• Significant incidents e.g. safety

.

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APPENDIX A – SHUTDOWN AIDE MEMOIR

SHUTDOWNS

The following serves as a checklist for the activities required to organise a maintenance shutdown at a mine or port. ACTIVITIES PRIOR TO THE SHUTDOWN Set a date and duration for the shutdown.

• Hold discussions with Operations, Marketing, Shipping, and other stake holders and confirm dates for the shutdown that suits all parties.

Prepare Work Notifications and Work Orders

• Collect job information from a number of sources and compile “Work Notifications and “Work Orders” in the work order system.

• As Work Orders are compiled identify and arrange all engineering and drafting requirements to be accomplished and for all parts to be identified and obtained for each job.

Prepare a Shutdown job list

• With the Maintenance Project Co-ordinator and the Shutdown Planner prioritise the work and select a list of jobs to be completed during the shutdown that fits within available budgets.

• Write a detailed “Scope of work” (work description) for each of the selected jobs and attach the previously prepared Work Order information to the Scope of Work. Therefore each job is identified by the Work Order number.

• Look for early tie-in work that can be carried out before the Shutdown.

Select the contractor to do the work

• There are two ways of letting the contract for the work to be completed by a contractor. These are either “Schedule of rates “or “Lump Sum Price” contracts.

1. “Schedule of rates” contract A process where a contractor is selected due to known factors such as previous performance, safety record, pricing advantages, etc. A pricing structure known as the “Schedule of rates” is agreed for labour and equipment. This schedule of rates becomes the basis of payment for labour hours and equipment used for each job. Schedule of rates contracts are often the basis of a “Partnering agreement” between two (or more) parties. Sites tend to have an ongoing maintenance agreement with one contractor and generally use this method of letting contracts.

2. Lump sum Priced contract This is a tendering process where a number of contractors are asked to submit a fixed Lump sum price for the work to be completed as indicated in the contract Scope of Work and any other drawings, specifications and standards that may be indicated. Copies of contract for Lump Sum work is issued to the contractors and a site inspection of the proposed work is conducted with the contractors. A period of time is agreed before the contractors submit their tendered price after which a site committee selects the most appropriate contractor using a “Tender Evaluation & Rating ” process based on criteria like – Safety performance, Tender

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safety presentation, Lump sum price, Tender compliance, suggested duration, numbers of personnel, man hours, day rates for any variations, experience of key personnel, confidence in previous performance etc.

Determine the shutdown costs

• By either the Lump Sum pricing (fixed price) or the Schedule of rates (estimated pricing) method ,communicate with the selected contractor to obtain accurate cost estimates to complete the work as well as the manning levels required. Pre-shutdown meetings are conducted to fine tune the tendered price or estimated costs and agree on those costs prior to placing an order for the work to commence.

Determine the shutdown category as “Minor Contract “or “Major Contract”.

• As outlined in the “Contractor Management Procedure, determine the category of the contract (i.e. either Minor or Major) then ensure that the Principals Representative and the Contractors responsibilities are completed as required.

Pre-book contractor accommodation

• Book sufficient rooms for the shutdown period.

Obtain budget approval and place an order for the work to proceed.

• Submit a justification to the Site Manager for budget expenditure and approval for the planned shutdown cost, and on receipt of that approval submit the purchase requisition, for the contract to be initiated.

Notify all relevant parties of the forth coming shutdown dates and activities

• Confirm and issue notification of the forthcoming shutdown to all relevant personnel

Obtain all permits and approvals prior to commencement of work.

• Obtain any necessary permits or approvals prior to the shutdown,

Conduct further shutdown pre-start meetings with the selected contractor

• Conduct further shutdown pre-start meetings with the selected contractor to confirm all relevant work, administration, personnel and safety requirements are agreed and in line with the “Contractor management procedure”.

Mobilization of contract personnel and equipment to site

• After satisfying all of the prescribed requirements the contractor shall start to mobilise all buildings , tools & equipment , and personnel to site to start the work on time.

ACTIVITIES DURING THE SHUTDOWN Carry out the shutdown works

• The Contractors Site-manager and the Principal’s Representative shall ensure all relevant safety requirements are met. (see item 5.0). All cleaning and equipment isolations shall be completed prior to commencement of the shutdown work.

• A daily meeting will be conducted to discuss safety, ongoing work progress, parts requirements, work quality, variations, additional costs and labour numbers. Prior to each daily meeting, the Shutdown Planner shall review the work achieved during the previous 24

EPCM Project Manual


hours and make any necessary changes to the shutdown works Gantt chart. The revised Gantt chart details shall be discussed at the daily meeting.

• Any changes to the original scope of work effecting details on supplied drawings or requiring new drawings, shall be recorded by the contractor and passed on to the Shutdown Planner at conclusion of the work , in the form of mark-ups in red on current drawings or legible, detailed sketches of the revisions.

• Each job, detailed on the Work Orders and their Scopes of Work, shall be signed off progressively at completion of each job

• Contractor “Inspection & Test sheets “shall be filled in, compiled and completed progressively as the work proceeds.

ACTIVITIES AFTER THE SHUTDOWN Demobilise contract personnel and equipment

• Remove all buildings, tools & equipment, and personnel. Thoroughly clean up the area.

Carry out shutdown “Close-out” (critique) meeting with the contractor

• Arrange a “Shutdown Close-out Meeting” with the contractor and any other relevant parties.

Drawing changes and Maintenance manuals up-dates

• Any drawings marked up by the contractor and forwarded to the Shutdown Planner shall be followed up by the Shutdown Planner for revision. The Shutdown Planner shall initiate any changes of information or up-dates to the maintenance manuals.

Finalise quality control documentation

• The contractor shall supply to the Principals Representative a folder containing all Quality Assurance documentation pertaining to the contract. ie. Inspection and test sheets for painting, steel installation & bolting plans, coupling alignments, gearbox fills, greasing, electrical load testing, conveyor alignment, etc.

Finalise costs .(invoices, variations and credits)

• Verify and sign off on all invoices for the contract work and any variations. Agreed work that was not completed may require a credit from the contractor against their invoice. Any parts not used during the shutdown may need to be credited back into the suppliers or the warehouse

Compile a Shutdown Close-out report

• At conclusion of the work and after the “Shutdown Close-out meeting” the Principal Representative shall compile a “Shutdown Close out report” as a record of shutdown activities. This report shall contain such items as –

1/ Overall safety performance. 2/ Overall costs. 3/ Report on the work achieved and photographs. 4/ Copy of the “Shutdown Close-out meeting Minutes”.

EPCM Project Manual


Close-out work orders and record history

• Modify history on shutdown work notifications and close-out work orders as required.

EPCM Project Manual


Document History and Status

Reference Type: Standard

Authors: Richard Morgan

Title: EPCM Project Manual

Date: 15/05/2017

Document No: AEPM-MA-0001

Filename: AEPM-MA-0001_0 ASPEC EPCM Project Manual

Revision Date

Issued Author Approved by Comments

A 31-11-2009 Richard Morgan Frank Gatto

0 15-05-2017 Richard Morgan Frank Gatto Project Management Document Numbers assigned