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FRONT END PLANNING & The Gated Project Delivery System

S&B/FB&D Guide to ensure that project scopes of work are well defined prior to the start of project execution OBJECTIVE CONSISTENTLY PREDICTABLE PROJECTS PM-FEP-GDLN-001 PM-FEP-GDLN-001 FRONT END PLANNING

J. Fish

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FRONT END PLANNING & The Gated Project Delivery System

TABLE OF CONTENTS Overview of the Front End Planning Process Overview Of The Gated Project Delivery Systems S & B/FB&D Front End Planning Resources: Front End Planning Lessons Learned FEP DELIVERABLES RESPONSIBILITY MATRIX: FEP 1 FEP 2 FEP 3 Estimated TIC Cost to Perform FEP – APPENDIX A Gated Project Delivery Process Key Activities Diagrams for FEP 2 & FEP 3 APPENDIX C1-C4

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FRONT END PLANNING (FEP): As a manager at S&B/FB&D you will be expected to fully understand the importance of the Front End Planning process and the associated tools used to ensure that:  The scope is defined to ensure predictability in cost, schedule, quality and business objectives  Risks are identified and a risk tolerance is established  All high impact risk items have a mitigation plan in place Front End Planning refers to a consistent series of activities used to ensure that a project has a well-defined scope of work. The Construction Industry Institute (CII) and Independent Project Analysis (IPA) have extensive research that proves projects with a high degree of Front End Planning produce projects that are more predictable in the area of cost, schedule, and the ability to achieve the business objectives. Research data illustrates that projects that are not well defined prior to starting detailed engineering experience more change orders that result in cost escalations of up to 50% and an extension in schedule of up to 46%. We cannot afford to skip the proven Front End Planning work processes.

CII Definition of FRONT END PLANNING (FEP): The process of developing sufficient strategic information with which owners can address risk and decide to commit resources to maximize the chance for a successful project. Front End Planning includes putting together the project team, selecting technology, developing project alternatives, selecting project site, and developing project scope. Other organizations use the following terms as synonymous with Front End Planning: Front End Loading (FEL), feasibility analysis, programming, and conceptual planning. Many of the owner organizations have developed a Gated Process as a mechanism to control the amount of expenditures committed to defining the scope of a project. The Gated Process is a structured series of activities that will help them select the RIGHT PROJECT prior to committing full funding. The owner will review a set of deliverables for each gate to ensure

GATED PROJECT DELIVERY SYSTEM Each Gate is a GO/NO GO decision

S C O U T ‘I N G

GATE

FEP 1

0

Business Assessment

Select Projects with highest potential of meeting business objectives

SCOUTING Estimate +100% -100%

GATE

FEP 2

1

GATE

2

FEP 3

Alternatives Selection

Scope Definition

Select the preferred process and technology options

Completely Define and Agree on full scope of work

GATE

3

EXECUTION

OPERATE

Detailed Engineering & Construction

Start-Up Operate and Evaluate

Execute the Plan

Start-Up

Detailed Engineering

Make Adjustments

Procurement

Achieve name plate capacities

Develop the Plan

FEP 1 Estimate +50% -50%

FEP 2 Estimate +30% -20%

Construction Turnover

FEP 3 Estimate +10% -10%

Deliverables and Business Objective requirements will be reviewed before proceeding to the next gate

Evaluate GATE KEEPER:

Uses business criteria to make go or nogo decision Decides WHICH potential projects will be executed and priority. Identify the WRONG project EARLY.

FEP Gated Project Delivery System Small Projects

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that the project is still of value to the business unit. The Gated Process provides an opportunity for the owner to evaluate a project in the early stages to ensure it is still viable and on track. If it appears that the project will not meet the business requirements, the owner may decide to kill the project at any one of the gates. This ensures that the owner does not commit valuable resources on the WRONG projects. Most owners have more projects in their queue than they can possibly fund or staff. The Gated Project Delivery system is used as a filter to weed out the WRONG projects early. That enables them to focus their resources to identify and execute the RIGHT PROJECTS. The project team must present a defined set of deliverables to a decision maker (or Gate Keeper) at each Gate in the process. If the project is still on track, the owner will approve the team to prepare the next set of deliverables. If the project is approved at Gate 3, then the project will be allowed to proceed with full engineering, procurement, and construction execution. Industry research has proven that the ability to improve a project rapidly diminishes once the scope has been defined and detailed engineering has begun. This is illustrated by the CII Cost-Influence Curve diagram below. Once detailed engineering and procurement have begun it is very difficult to change the fate of a project. Funds are being spent at an accelerating rate based on decisions defined in the Front End Planning Process. Any potential savings or good ideas must be developed in FEP to maximum value and chances of success.

S&B/FB&D Ability to Influence Final Cost Over Project Life Define High

1

2 3

Ability to Influence Cost

EXECUTE

FEP 1,2 & 3 is the Time to Make a Difference!!!

Cost Expenditure

100%

Detailed Engineering Procurement Construction

Low

Cost Influence

Start-Up ď ´

has been a leader in the FEP process by participating as team members for a series of CII FEP research teams. We started in the early nineties with what was then call PreProject Planning (this term was replaced with FEP in 2004). Mr. Slaughter sponsored the research that developed the Project

Definition Rating Index (PDRI) and the Team Alignment Thermometer. The PDRI

is the industry tool of choice to evaluate the 14 FEP Gated Project Delivery System Small Projects Rev 4, September 2005 J. Fish FB&D completeness of definition of any project. Use of the PDRI is a S&B/FB&D Best Practice. S&B/FB&D has continued to be active in CII research to assist in the refinement and development of FEP process and tools. Start Date

Need Date

Time

Prior to 2000, many owners would execute the Gated Process to develop the scope of work internally. As they downsized, the owners began to outsource some of the FEP to engineering contractors. At first they turned FEP 3 over the contractors. As they continued PM-FEP-GDLN-001 FRONT END PLANNING

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to downsize, the owners enlisted contractors to assist in FEP 2 process to investigate and recommend alternatives. Eventually, some owners had to outsource all of the FEP. In most cases, S&B/FB&D will utilize the Owner’s Gated Process. For owners that do not have their own process, FB&D has developed its version of the Gated Process along with a series of Best Practices that help the project team identify potential risk areas and define the scope of work to ensure project success. See Appendix B for the S&B/fB&D GATED PROJECT MANAGEMENT PROCESS. S&B may receive a project in any stage. The important question for any project manager is to determine what stage the project is in once the owner hands it over to us. We can be asked to execute any of the FEP stages, Detailed Engineering, or maybe just the construction phase. Regardless of the stage, it is an S&B/FB&D standard practice to conduct a PDRI evaluation on every project. The client may indicate that the project has just completed a specific phase. That does not automatically mean that the project has been properly defined for that phase. An independent PDRI evaluation will validate the completeness of scope and identify any potential areas of weakness or risk. S&B has a cadre of trained PDRI facilitators who are available to assist with this evaluation.

FEP and the PDRI Potential PDRI Application Points Align team w/Objectives

OPTIONAL: How are we doing?

Communicate drivers between

Alignment check: Objectives vs Needs

- Business/Sponsors/Contractor

Resources deployed for highest benefit

Identify Stakeholder expectations

Plan the remaining activities

Typical Score: 600-800

Typical Score: 300-450 Align objectives w/stakeholder needs Final review to validate completeness Identify high priority deliverables of definition. Eliminate late surprises Definitely should be done on ALL Facilitate communications across team

projects regardless of size or type.

Typical Score: 450-600

Typical Score: 180-220

1 0

Feasibility

2i

2 1

Concept

2

Detailed Scope

3 3

Design and Construction

PDRI

PDRI Overview & Intro J.Fish Rev 23, March 2007

30

Use this slide as a guide on when to utilize the PDRI on a specific project. PDRI should be completed as a part of the final deliverable package for each phase along with the Action Items to minimize risks.

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Below is a table of expected scores to be achieved for each phase. Notice that the scores go down as the project becomes more and more defined. A low score is better when using the PDRI. The lower score indicates fewer unkowns and risk factors. CII research validates that projects with a score in the range of 180 to 220 at the end of FEP3 (before the start of detailed design) have a much greater record of being successful.

TARGET PDRI SCORES

Please note the differentials in cost and schedule. Latest data from Independent Project Analysis (IPA) has demonstrated that predicting and completing projects on schedule is the real challenge even for a well-defined project. Poorly defined projects are as much as 46% behind schedule.

Score Category

Feasibility End of FEP 2

50% FEP 3

End of FEP 3

I. Basis of Decision

200

95

60

II. Front End Definition

320

190

100

78

65

40

III. Execution Approach

TOTAL

600-500

450-300

PDRI Overview & Intro J.Fish Rev 23, March 2007

220-180 PDRI

41

There is a PDRI for Industrial Projects and a separate one for Commercial Buildings. It is not uncommon to use BOTH on the same project. S&B has the manuals online. In addition we have developed an S&B specific spreadsheet that can be used by a trained facilitator to capture the team evaluation of the FEP at various points in the planning process.

Appendix C1-C4 provides a Graphic that can be used as a guide for Project Managers to assess which activities should be addressed during FEP 2 & FEP 3. The Project Team will decide which items are most important, but the relative steps remain the same from project to project. The latest version of each is available for download at: http://docushare2.sbec.com/dscgi/ds.py/Get/File-45962

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OVERVIEW OF THE GATED PROJECT DELIVERY SYSTEMS - GATE DEFINITIONS Extracted from the CII FRONT END PLANNING TOOLKIT Note: IPA uses the FEL Acronym for Front End Loading CII uses the FEP Acronym for Front End Planning

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S&B/FB&D FRONT END PLANNING RESOURCES: The S&B Project Management Manual has a great deal of information that is useful and most cases mandated for Front End Planning of a project. PM-107 – Early Planning Guide PM-106 – Contract Review PM-110 – Project Execution Plan PM-115 – Client and S&B Responsibilities PM-116 – Division of Responsibilities Matrix PM-130 – Project Instructions and Procedures Manual PM-135 – General Project questionnaire PM-145 – Basic Construction Questionnaire In addition, the Project Manager should visit the S&B/FB&D Best Practices page on the S&B Portal to review which Best Practices would benefit this project. http://ipims.sbec.com/portal/page?_pageid=313,1&_dad=portal&_schema=PORTAL Go to the Project Phase Chart to see recommendations on which phase can benefit from each Best Practice.

The Project Manager can click on each Best Practice to gain access to all the resources required to support the successful implementation of the critical few for that project.

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ADDITIONAL FRONT END PLANNING RESOURCES: We have embedded these two resources into this document. The Project Management Team should extract these guides and use them to monitor the progress of the Front End Planning Effort.

FEP DELIVERABLE RESPONSIBILITY MATRIX FEL Responsibility Check List I-III Hiram

FEP DELIVERABLE & ESTIMATING FORM HO felestimate Deliverables Based.xl

LISTING OF FRONT END PLANNING RESOURCES FROM BEST PRACTICE PAGE FEL Deliverables Checklist Project Definition Rating Index PMP Overview FEL Overview Process Information Flow Diagram PM-113 S&B Project Management Process and FEL Guidelines PM-107 Project Early Planning Guideline CII Education Module #39-21, Pre-Project Planning CII Publication P 039-1, Pre-Project Planning: Beginning a Project the Right Way CII Publication SP 039-2, , Pre-Project Planning Handbook CII Publication RS 113-1, Pre-Project Planning Tools: PDRI and Alignment CII Publication SD-45, Owner's Project Planning: The Process Approach CII Publication SD-94, Modeling Pre-Project Planning for the Construction of Capital Facilities CII Publication SD-105, Analysis of Pre-Project Planning Effort and Success Variables for Capital Facility Projects Front End Planning of Renovation and Revamp Projects Resource 242-2

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FRONT END PLANNING LESSONS LEARNED ENGINEERING: P&ID’s: Develop a P&ID Management Plan Define the Issues/Reviewers/Approvers including method & duration of Approval Process Define roles and Responsibilities to ensure the right information is on each Issue. Identify at what point team will start tracking changes As a minimum, perform a Preliminary Hazards Review in FEP Manage the content – firm or not so firm. Establish a formal Change Management System After Approval Issue. ENGINEERED EQUIPMENT MANAGEMENT Define the steps and approval requirements to secure firm bids Identify handoffs, approval requirements and durations for each step Look for ways to streamline the process Define which items require Firm Pricing and which can be historical or Phone Quotes Manage the process for development of Data Sheets Process and Mechanical Process and Instrumentation – Relief Devices Manage the production of the Instrument Index WBS: Develop a Work Breakdown Structure with a focus on producing construction deliverables. WBS to be in alignment with the Contracting Strategy Construct the estimate to align with the WBS If the Estimate is NOT broken into WBS, it is almost impossible to status progress in Engineering. Ensure that a construction representative has input and buy-in Engineering to provide deliverable packages in alignment with packages. Prioritize Packages and establish a sequence for construction Align the engineering, procurement, and fabrication to support construction plan INFORMATION MANAGEMENT PLAN: Identify the Client Turnover Requirements at the end of the project. Develop the Distribution Matrix using RACI format for all critical Issues Validate all deliverables and As Built Requirements 3D MODEL in FEP Utilize a 3D Model on significant projects to assist the client with visualization. Establish Model Review points to pin down Equipment Arrangements Accessibility, Maintenance Requirements, Operational Requirements Model all major structures, equipment, major piping systems and control stations. Establish point of Equipment Arrangement Approval – As Basis of Estimate – No Changes PDRI: Minimum – PDRI session at end of FEP2 & FEP3 Use a trained facilitator Project Manager to Listen to team members discuss the project. Very little talking on the part of the PM PM-FEP-GDLN-001 FRONT END PLANNING

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Objective is to gain an understanding of how and what the team members are doing. PM should assist the facilitator in asking probing questions. PM to use the PDRI as a checklist or guide to identify critical issues.

Line List management – Get Process Data loaded early to support Stress Analysis Identification and Strategy (Stress can be 30% of Mechanical Budget) Identify Insulation Requirements, Sloped Lines, Special Conditions Define Iso Requirements – All or specific line sizes Establish strategy for Rack Run Piping – Fab/Construction Issues Define any Interfaces for lines that are shared by two or more firms. (Who owns the line – Hydraulics, stress, Isos, Materials, etc.)

Tie-In Management Plan Develop listing of Tie-Ins and plan to secure operations location approval Define the Tie-In approval requirements, forms, signatures, responsibilities Define contents of the Tie-In Package Define Tagging Requirements in the field.

Stress Analysis Strategy Meeting Conduct meeting with Piping, Stress, and Structural Identify Critical Stress Requirements/Problems that may require action in FEP Define Requirements for Loops and Major Anchor Bents.

Specification Management Establish the specifications to be used as a Basis of Estimate. Do NOT upgrade to the latest specification AFTER Bids. Freeze the Specs for THAT PROJECT. Post or formally issue all specifications on a Document Management System to ensure everyone is using the appropriate version or revision. Ensure these specifications get formally issued to all stakeholders Vendors, Owner Inspection, Owner Specialists, Fabricators, etc. Establish a WAIVER system for items that have been approved to be in noncompliance with the published specifications. The Design or Purchase Documents must reference the appropriate Waiver Number.

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EXECUTION PLANNING: PROCUREMENT AND MATERIALS: Develop a Procurement Strategy early in FEP 2 – Consider PEpC opportunities Expand to a detailed Procurement Plan in Early to Mid FEP3 Develop a Procurement Responsibilities Matrix – Who will provide what. Determine which entity will Define, Inquire, Bid Tab, Prepare Purchase Requisitions, Place the Order, Expedite, Receive and Manage Vendor Data, Pay Invoices, and Process Recievers. Source Inspection Plan  Be sure to include Source Inspection Requirements into your Front End Estimate  Identify Items that can benefit from a Pre-Fabrication Meeting.  Identify the level of Inspection Required  Identify the potential costs in time and travel for each item.  Include this information into the Commercial Bid Evaluation.  Take past performance evaluations into consideration o Timely Delivery, Timely Vendor Data, Quality, Responsiveness

CONTRACTING STRATEGY Develop the Preferred Contracting Strategy early in FEP 2 Validate the Contracting Strategy via an INTERACTIVE PLANNING SESSION Mid FEP3 Ensure that Engineering understands the deliverables and degree of information required to support a Contract Bid and Award including Fabrication Orders. Avoid lump sum contracts in an operating environment

FINANCIAL: Establish payment schedules Incentives must be in alignment with project objectives and drivers. Incentives must drive the desired behavior Define the Metrics to be used to qualify for incentives.

SUPPORTING PROCESSES: ALIGN, ALGIN, ALIGN, & ALIGN AGAIN Aligning ALL stakeholders and keeping them aligned is a real challenge. Use Team Meetings, Team Building, PDRI Sessions, Risk Identification, etc to reinforce the importance of alignment and Assess alignment periodically to see you the team require realignment. Focus on Project and Business Objectives, Drivers, and Requirements for a successful project. Ensure that everyone clearly understands the Driver: Cost, Schedule, Quality or whatever

Kickoff Meeting Conduct a formal Kick Off Meeting FEP to define expectations, roles, responsibilities Develop a Project Specific Deliverables List to support the level of definition required. PM-FEP-GDLN-001 FRONT END PLANNING

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Constructability: Bring in a Construction Rep early to help with WBS and major philosophies for each discipline. Use the model for scenario planning Use the model for constructability studies. For Revamp ensure designs are INSTALLABLE in existing confines (i.e. crowded piperack)

System Turnover: Identify System Turnover Requirements in FEP Primarily an owner activity Engineering can identify most of the systems to assist the owner Owner will identify the sequence of turnover and required dates to support commissioning. Commissioning Plan needs to be in place. CII IR-122-2 Planning For Startup is a great Reference and Guide.

Risk Identification and Mitigation Cost Risk Analysis – what can go bad with negative impact on cost? Schedule Risk Analysis – what can go wrong with negative impact to schedule? Risk or Threat Analysis – What are the events that could negatively impact the project? Use a Risk Register Conduct early in FEP2 Continue to Conduct and Revisit through detailed engineering. Identify new threats Review Mitigation of existing threats

Interactive Planning Use to validate the project execution plan Including Contracting and Procurement Strategy Conduct approximately midway FEP3. Start with the end in mind and work backwards. Do not start with a blank wall – use a milestone schedule as a starter set and modify. Do not schedule in detail until AFTER the Interactive Planning is complete.

Interface Management Plan – Use on Collaborative Engineering/Construction projects Develop a strong interface management plan Clearly denote and define all interface points Identify ownership Define the Rules of Engagement for each interface Define the difference between a TIE-IN Point and an Interface Point Nuclear uses TERMINAL POINTS to define controlling authority

Owner Specialist Interface Plan Develop a plan to define the relationship between engineering contractors and owner SME’s. PM-FEP-GDLN-001 FRONT END PLANNING

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What approval points do they require – Data Sheets, P&ID’s, Vendor Data, Drawing Reviews

Project Communications Plan: Identify how all communications will be documented, distributed and stored for easy access and retrieval. Things to consider: Actions Items Decision Log Reporting Requirements – Content, Degree, Timing, etc. How to manage Owner Approvals

Management of Change Plan Define how the team will manage Requests for Changes Define the work flow for approvals Define, Agree, and Align on what constitutes a Change to the Scope of work. Contingency Management Plan – Buckets and drawdown plan.

NAGATIVE LESSONS LEARNED GATED PROCESS: DELAYS: Often the delay to get approval to proceed to the next phase – especially detailed engineering – can result in havoc on the contractor side.  Bid pricing expires resulting in the need to REBID or as a minimum REFRESH  Have to reassign critical design team members to other projects to keep them billable.  Purchasing Plan starts to fall apart – delays receipt of vendor data – resulting in work arounds. PAPER CHASE: Some Approval Boards demand a tabbed book with all the detailed information from FEP in formal written format. Once a format is established and accepted, the teams to tend to copy from one project to another changing a few details. Projects are approved on the massive paper rather than a well defined execution plan. This is especially true of Project Execution Plans. Teams tend to take an Existing Plan, modify a few words, and expect to get it approved since the last one was approved. NUMBERS GAME: Some management teams mandate that a project of more than a certain score will not be approved. That leads to playing the score game.  Management should focus on the important issues, concerns, and action items.  The score is not nearly as critical as the teams understanding of the issues that are well defined, risks identified, and mitigation plans are in place.

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SPECIAL SITUATIONS: Revamp Projects: Safety issues need to be identified in FEP Kick off Meeting Mitigation plans formulated early in FEP and incorporated into all design efforts. Existing site conditions (including utilities) need to be fully defined. Coordination with Operations and Maintenance Teams is Paramount. Projects that will executed as a part of a Maintenance Turn Around Owner and Contractor PM to Coordinate with other projects and the Turnaround Planning Team. Move as much work into PRE and POST turnaround as possible. All deliverables to the Turn Around Team a minimum of 3 months prior to Turn Around. All Materials for the Turn Around to be on site 60 days prior to Turn Around. COLLABORATIVE ENGINEERING PROJECTS – Multiple Engineering contractors Interface Management System must be in place Roles, Responsibilities, and Division of Work Matrix must agreed upon. Communications and Information Exchanges identified. Establish ONE COMMON Document and Data System if possible for Owner access. Agree on Versions of software to be used that must be combined. Conduct an Expectations workshop in the Teambuilding. Check Alignment on critical issues frequently Shared Specifications  Establish the specifications to be used on the project.  One Company will manage/control the publication of all specifications  Any revisions/changes must be issued to all contractors and stakeholders.  Change management must be very careful.  One company to provide the 3D CAD Specifications to others to ensure alignment  PROJECTS TO BE EXECUTED DURING A TURN AROUND OR SHUT DOWN Must coordinate with Owner Turn Around Planning Group as much as possible. Move as much work in PRE and POST Turn Around Clearly identify the work to be performed in each phase: Pre, Turn Around, Post Clearly Identify the Demo work for each phase also. Identify any other projects by anyone who will be going in the same time. Use Lasers to verify critical piping fabrication in the shop BEFORE it gets to the jobsite. All pipe must fit – no time to modify during the Turn Around Use Lasers to verify piping connection points in the COLD position to ensure pipe will fit. Use Lasers to verify anchor bolt locations for equipment setting.

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Front-End Loading Reponsibility Matrix Project E-1234 Project Title Business Assessment Phase (FEL-1) The below activities and deliverable are the major item, each project will vary in requirments

Activity / Deliverable

Req'd (Y/N)

Owner

Responsibility S&B Others

Comments

BUSINESS MANAGEMENT 1 Project Premise Document Develop Project Goals & Objectives Develop Project Premises Identify and Evaluate Alternative Projects 2 Strategic Business Assessment Economic and Risk Analysis Financial Strategy FEL Funding Strategy PROJECT MANAGEMENT 1 Order of Magnitude Estimate(s) (Class V) Estimate Premise, Assumptions and Checklist 2 Phase II Scope of Work Identify Deliverables for Phase II 3 List of Best Practices for Project Identify Best Practices for Phase II 4 Strategic Schedule (milestones) Critical Long lead Equipment List Key Unit Turnaround Dates Business Schedule requirements 5 Project Execution Strategy Identify technology licensing plan / strategy Identify Permitting & Regulatory Requirements Formulate Ideas for Contracting Strategy Outline Safety and Industrial Hygiene Requirements 6 Phase II Budget Request and Schedule Resource Plan (owner and FEL contractor) Resource requirements from location/plant OVERALL DESIGN AND TECHNICAL BASIS 1 Technology Basis Technology Survey / Evaluation Process Block Flow Diagram(s) Preliminary Capacity Hazards Evaluation 2 Site Selection Establish Site Selection Criteria Site Visits Remediation Requirements 3 Offsite Requirements Availability of Utilities

LEGEND P = Provide or Prepare R = Review A = Approve S = Support

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Front-End Loading Reponsibility Matrix Project E-1234 Project Title Project Selection Phase (FEL-2) The below activities and deliverable are the major item, each project will vary in requirments

Activity / Deliverable

Req'd (Y/N)

Owner

Responsibility S&B Others

Comments

BUSINESS MANAGEMENT 1 Project Premise Document Updated Project Goals & Objectives Updated Project Premises Alternative Approaches Cost / Risk/ Benefit Tradeoff Analysis "Preferred" Alternative(s) Selected 2

Strategic Business Assessment Updated Economic and Risk Analysis Updated Financial Strategy Updated FEL Funding Strategy

3

Basic Engineering Contract Award Preliminary Engineering Contract Language Performance Guarantees, Warrantees, Test and Standards

PROJECT MANAGEMENT 1 Class III Estimate(s) (+25% / -15%) Estimate Premise, Assumptions and Checklist Risk / Contingency Analysis 2

Phase III Scope of Work Document Identify Deliverables for Phase III Summary Level Scope Definition Preliminary Licensing Plan Control System / Control Room Strategy Power Strategy Building Requirements Operations and Maintenance Input Constructability Input

3

List of Best Practices for Project List of Best Practices implemented for Phase II Phase III Best Practices Selection

4

Level I Milestone Schedule Identify Long Lead Equipment Items Permitting and Regulatory Compliance Dates Key Unit Turnaround Dates Business Schedule requirements

5

Preliminary Project Execution Plan Identify Technology Licensing Plan / Strategy Identify Permitting & Regulatory Requirements Updated Owner Contracting Strategy Outline Safety and Industrial Hygiene Requirements Technical Assurance and QA/QC Strategy

6

Phase III Budget Request and Schedule Resource Plan (owner and FEL contractor) Resource requirements from location/plant

7

Project Coordination Procedures

8

Permit Applications Determine Permitting and Regulatory Compliance Requirements Prepare Permit Applications

9

Scope Definition Benchmarking (PDRI) Phase II PDRI Assessment

OVERALL DESIGN AND TECHNICAL BASIS 1 Process Description Review Capacity / Yields / Purities / Product Spec Pilot Plant Data (if required)

LEGEND P = Provide or Prepare R = Review A = Approve S = Support

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Activity / Deliverable

Req'd (Y/N)

Owner

Responsibility S&B Others

Comments

Plant Design Philosophy Preliminary Process & Equipment Design Parameters Process Simulations Conceptual Studies Raw Material Requirements / Composition Feed and Raw Material Suppliers Verified Special Considerations Identified Process Technology Selection/Evaluation Process Licenser(s) Package(s) - (if required) 2

Preliminary PFD’s Preliminary Heat & Material Balance Physical Properties (Process)

3

Preliminary P&IDs Preliminary Material Requirements (Metallurgy, etc.) Preliminary Equipment List (with approximate sizing)

4

Conceptual Plot Plan

5

Conceptual Arrangement Drawing(s)

6

Preliminary Hazards Evaluation

7

Site Information General Location and Site Conditions Environmental Requirements Waste Disposal / Treatment Viability Confirmed Utility & OSBL Requirements Site Development/Infrastructure Requirements Traffic Studies

9

Offsite Requirements Availability of Utilities

LEGEND P = Provide or Prepare R = Review A = Approve S = Support

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Front-End Loading Reponsibility Matrix Project E-1234 Project Title Scope Definition Phase (FEL-3) The below activities and deliverable are the major item, each project will vary in requirments

Activity / Deliverable

Req'd (Y/N)

Owner

Responsibility S&B Others

Comments

BUSINESS MANAGEMENT 1 Final Project Premise Final Project Goals and Business Objectives 2 Updated Strategic Business Assessment Updated Economics and Risk Analysis Final Financial Strategy 3 Detailed Engineering/EPC Contract Document(s) Preliminary Contract Language Performance Guarantees, Warrantees, Test and Standards Scope Documents PROJECT MANAGEMENT 1 Class II Estimate (+15% / -10%) Estimate Premise, Assumptions, and Checklist Risk / Contingency Analysis 2 Scope of Work Document Operations & Maintenance Requirements Project Specifications, Codes, & Practices Identified Training, Commissioning, Startup and Performance Testing Requirements Plant Site conditions 3

Best Practices Document and List Phase III Best Practices EPC Best Practices Selection Constructability

4 Detailed EPC Schedule Work Breakdown Structures System Identification and Preliminary Turnover Plan Updated Long-Lead Delivery List Resource Load Schedule Engineering and Construction Progress Curves 5 Project Execution Plan Final Owner Contracting Strategy Shutdown Plan Detailed Subcontracting Strategy Remediation Requirements Facility Siting Plan (Overpressure) 6 EPC Phase Budget Request 7 Project Instructions & Procedures Manual Division of Responsibilities Matrix 8 Permit Applications Submitted 9 Scope Definition Benchmarking (e.g. – IPA/PDRI)

PROCUREMENT DEFINITION 1 Approved Manufacturers & Suppliers List 2 Subcontracting Plan 3 Materials Management Plan

LEGEND P = Provide or Prepare R = Review A = Approve S = Support

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Activity / Deliverable 4

Req'd (Y/N)

Owner

Responsibility S&B Others

Comments

Procurement Plan

5 Early Release Purchase Orders 6 Source Inspection Plan PROCESS DEFINITION 1 Process Flow Diagrams Heat & Material Balance Raw Material Requirements / Composition Defined Capacities / Yields / Purities, etc. Startup, S/D, Upset and Transitional Conditions Physical Properties Preliminary Line Sizing Process Studies (as required) 2 P&ID's / UFD’s Issued for Design Utility Sources with Supply Conditions Special Design Requirements P&ID Review with Operations & Maintenance Utility Consumption Table (if required) Heat Tracing & Insulation Requirements Fire Protection & Safety System Requirements Process Conditions on Line List Safety Interlock System Description Specialty Items Identified

3 Process Specifications for New and/or Modified Equipment 4 Process Specifications for Instruments 5 Battery y Limits Interface Table 6 Demolition Requirements Demo P & I D's 7 Environmental Requirements Waste Disposal/Treatment Requirements Dispersion Analysis (if required) 8 Flare and Relief System Requirements Relief Valve Sizing Flare System Sizing 9 Process Hazards Review (PHA)

MECHANICAL DEFINITION 1 Pipe Specifications Issued For Design 2 Valve Specifications Issued For Design 3 Mechanical Data Sheets and Specifications Issue for Design Metallurgy Requirements Finalized Oil Mist Systems Deluge Systems 4 Equipment List Issued for Design Equipment Sized Protective Coatings Specified 5 Specialty Item List Issued for Design 6 Paint / Insulation / Fireproofing Matrix Issued for Design Protective Coating Requirements (Paint, Insulation, Fireproofing) Defined Mechanical Input to Line List 7 Quotes for Major Equipment 8 Pipe Stress Requirements

LEGEND P = Provide or Prepare R = Review A = Approve S = Support

2/16/2009

FEL Responsibility Matrix, Page 5 of 7


Activity / Deliverable

Req'd (Y/N)

Owner

Responsibility S&B Others

Comments

Pipe Stress Kick-Off Meeting PIPING DEFINITION 1 Plot Plan Issued for Design Verify Plant coordinate System Identify Fire Protection Requirements 2 Equipment Arrangement Plans & Elevations Issued for Design Preliminary Piping Studies Plant spacing requirements Gas / LEL Monitoring 3 Line List Issued for Design Clearly show heat tracing information 4 Tie-in List Issued for Design Tie-in types Defined Tie-in Locations Selected Tie-in Tags Hung 5 Steam Tracing Definition Define manifold requirements 7 Scope of Work Interface Definition 8 Interconnecting/Logistics Piping Plan CIVIL / STRUCTURAL / ARCHITECTURAL DEFINITION 1 Obtain Geotechnical Survey 2 Conduct Test Trenching Identify Underground Interferences Test trenching methodology (hydraulic, probe, backhoe) Survey inverts and document 3 Grading and Paving Plan Develop Disposal Plan for Excavated Material Define Tank Diking Requirements 4 Sewer Plan Storm Sewer Requirements Oily Water Sewer Requirements Chemical Sewer Requirements 5 Road Layout 6 Foundation Sketches Define Location, Sizes, and Types of Foundations Define Piling Sizes and Depths 7 Structural Steel Sketches Define Limits of Fireproofing 8 Building/Shelters Size and Description Materials Requirements HVAC Requirements 9 Scope of Work Interface Definition INSTRUMENT DEFINITION 1 Instrument Index Preliminary Control Valve Sizing 2 Demolition Scope Identified 3 Number and Location of New Junction Boxes Preliminary Junction Box Location Plan 4 Instrument Specifications for Special Instruments (Analyzers, LEGEND P = Provide or Prepare R = Review A = Approve S = Support

2/16/2009

FEL Responsibility Matrix, Page 6 of 7


Activity / Deliverable

Req'd (Y/N)

Owner

Responsibility S&B Others

Comments

Flow Meters, etc.) H/C and/or Toxic Vapors Detection Systems 5 Protective Instrument System Definition (if required) 6 Control System Summary Control System Philosophy and Key Components Pricing for Controls System Pricing for Programming / Configuration DCS Block Diagram Control Room Layout 7 Scope of Work Interface Definition Instrumentation Execution Plan Subcontracting Strategy Division of Responsibility Matrix (EPC) ELECTRICAL DEFINITION 1 Load List 2 Electrical Equipment Data Sheets / Specifications 3 Electrical Equipment List 4 Electrical One-Line Diagrams 5 Area Classification Drawing 6 Cathodic Protection System Description 7 Conduit and Cable Schedule Type and Length of Cables, Conduit, Etc. Cable Routing Sketches 8 Description of Lighting Requirements 9 Description of Grounding Requirements 10 Preliminary Control Room and Substation Layout(s) Pre-Engineered Electrical Buildings Definition 11 Special Systems Definition PA Systems (Gaitronics) Alarm Systems Closed Circuit Television System 12 Electric Tracing Definition Engineering, Materials and Installation Pricing (S/C) 13 Scope of Work Interface Definition

LEGEND P = Provide or Prepare R = Review A = Approve S = Support

2/16/2009

FEL Responsibility Matrix, Page 7 of 7


Front End Planning Phase Cost TIC >$5MM Industrial projects: 4.2 % Building projects: 1.9 % Expect DOUBLE for projects <$5 million

2 – 6% TIC >$5MM 4 – 9% for < $5MM

PM-FEP-GDLN-001 FRONT END PLANNING

J. Fish

Rev 1 11-29-08

Page: 16

APPENDIX A


APP

PM-FEP-GDLN-001 FRONT END PLANNING

J. Fish

Rev 1 11-29-08

Page: 17

APPENDIX B


POTENTIAL ITEMS TO ADDRESS DURING FRONT END PLANNING

FRONTEND ENDPLANNING PLANNING(FEP) (FEP) FRONT 10% 10% FEP2 2PROCESS PROCESS FEP Engineering Engineering AlternativeSelection Selection Alternative

To Align Team & Identify Critical Tasks/Elements

Lessons Learned

PROCESS SIMPLIFICATION

Preliminary Hazards Review

Design Management Plan

Early RISK Identification & Mitigation Plan

FEP22 FEP PFD's PFD's

PLOT PLOT PLAN PLAN

EQUIPMENT EQUIPMENT LIST LIST

15% 15%

25-30%of of Engineering Engineering 25-30%

SCOPEDEFINITION DEFINITION PHASE PHASE FEP FEP 3 SCOPE Initiate PERMITTING PROCESS

DEVELOP PERMITTING PLAN

PDRI

WORK FLOW FLOW PROCESS PROCESS WORK

PDRI INFO MGMT PLAN (PIMS)

Cost & Schedule Risk Analysis to establish Contingencies

FEP 3

CLASSII II CLASS

DEVELOP DecisionDEVELOP Decision ESTIMATE ESTIMATE P& ID'S P& ID'S -15%, 25% -15%, 25%

P&ID'S P&ID'S ISSUED ISSUED FOR FOR COMMENT COMMENT

P&ID's P&ID's ISSUE ISSUE FOR FOR APPROVAL APPROVAL

CONDUCT CONDUCT HAZARDS HAZARDS REVIEW REVIEW

P&ID's P&ID's ISSUE ISSUE FOR FOR DESIGN DESIGN

CLASS III III CLASS ESTIMATE ESTIMATE -10%, -10%, +10% +10%

John Fish PM-FEP-WFD-005 Single Slide.PPT John Fish PM-FEP-WFD-005 Single Slide.PPT RevRev 20 20 FEB 2010 FEB 2010 jrfish@fbd.com jrfish@fbd.com

FEP Modules originally Adapted from Strategic Project Planner, byby Westney Consultants FEP Modules originally Adapted from Strategic Project Planner, Westney ConsultantsInternational, International,Inc. Inc.Additions Additionsfrom fromCII CII&&Others Others by byJ. J.Fish Fish S&B/FB&D S&B/FB&D

PM-FEP-GDLN-001 FRONT END PLANNING

J. Fish

Rev 1 11-29-08

Page: 18

25 26

APPENDIX C1


FEP 2 ACTIVITIES

FRONT END PLANNING (FEP)

15%

10% FEP 2 PROCESS Engineering Alternative Selection

To Align Team & Identify Critical Tasks/Elements

Lessons Learned

PROCESS SIMPLIFICATION

Preliminary Hazards Review

Design Management Plan

Early RISK Identification & Mitigation Plan

FEP 2 PFD's

PLOT PLAN

EQUIPMENT LIST

SCOPE DEFINITION PHASE FEP 3

PDRI INFO MGMT PLAN (PIMS)

Cost & Schedule Risk Analysis to establish Contingencies

FEP 3

CLASS II

Decision DEVELOP ESTIMATE P&ID'S -15%, 25%

FEL 2 Deliverable Listing Team Integration Session 1

Responsibility Matrix

25-30%of Engineering

Initiate PERMITTING PROCESS

DEVELOP PERMITTING PLAN

PDRI

WORK FLOW PROCESS

P&ID'S ISSUED FOR COMMENT

P&ID's ISSUE FOR APPROVAL

CONDUCT HAZARDS REVIEW

P&ID's ISSUE FOR DESIGN

CLASS III ESTIMATE -10%, +10%

Process Simplification Construction Management Plan

CONTRACT & PROCUREMENT STRATEGY

SPECIALISTS Participation Plan

DEVELOP MATERIALS MANAGEMENT PLANNING FOR ENGINEERED EQUIP , FABRICATED PIPE/STEEL, THEN BULKS ENGINEERED EQUIPMENT - DEVELOP EQUIPMENT DATA SHEETS

ENGINEERED EQUIPMENT - INQUIRY & BID EVALUATION EFFORT John Fish PM-FEP-WFD-005 Single Slide.PPT Rev 20 FEB 2010 jrfish@fbd.com

DESIGN FOR SAFETY & CONSTRUCTABILITY: Establish Program & conduct Ongoing Constructability/Safety Design Sessions

FEP Modules originally Adapted from Strategic Project Planner, by Westney Consultants International, Inc. Additions from CII & Others by J. Fish S&B/FB&D

PM-FEP-GDLN-001 FRONT END PLANNING

J. Fish

Rev 1 11-29-08

Page: 19

27

APPENDIX C2


FEP 3 TASKS

FRONT END PLANNING (FEP)

15%

10% FEP 2 PROCESS Engineering Alternative Selection

To Align Team & Identify Critical Tasks/Elements

PROCESS Lessons Learned SIMPLIFICATION Preliminary Hazards Review

Early RISK Identification & Mitigation Plan

Design Management Plan

FEP 2 PFD's

PLOT PLAN

EQUIPMENT LIST

PDRI INFO MGMT PLAN (PIMS)

Cost & Schedule Risk Analysis to establish Contingencies

Lessons Learned Constructability Check List RISK/THREAT Identification & Mitigation Plan

Team Integration Session 1

Responsibility Matrix

One Line Pipe Routings (Rack Loading)

CLASS II

Decision DEVELOP ESTIMATE P&ID'S

SPLIST Tie-In List

Piping/Mech Pipe Stress Strategy Mtg VALUE ENGINEERING INTERACTIVE

PLANNING SESSION P&ID's ISSUE FOR APPROVAL

PERMITTING PROCESS

QA/QC Mgmt Plan

Optional

Materials Mgmt PLAN

P&ID'S ISSUED FOR COMMENT

Instrument Index

PDRI

Cost & Schedule Management Plan

FEP 3

-15%, 25%

FEL 2 Deliverable Listing

25-30%of Engineering

SCOPE DEFINITION PHASE FEP 3 Initiate PERMITTING PROCESS LINE LIST

DEVELOP PERMITTING PLAN

PDRI

WORK FLOW PROCESS

PDRI

Update RISK/THREAT Identification & Mitigation Plan FREEZE P&ID’s & scope as basis of Estimate

CONDUCT HAZARDS REVIEW

P&ID's ISSUE FOR DESIGN

Cost & Schedule Risk Analysis to establish Contingencies P&ID Changes must be managed via formal MOC

CLASS III ESTIMATE -10%, +10%

Process Simplification Construction Management Plan

CONTRACT & PROCUREMENT STRATEGY

SPECIALISTS Participation Plan

DEVELOP MATERIALS MANAGEMENT PLANNING FOR ENGINEERED EQUIP , FABRICATED PIPE/STEEL, THEN BULKS ENGINEERED EQUIPMENT - DEVELOP EQUIPMENT DATA SHEETS

ENGINEERED EQUIPMENT - INQUIRY & BID EVALUATION EFFORT John Fish PM-FEP-WFD-005 Single Slide.PPT Rev 20 FEB 2010 jrfish@fbd.com

DESIGN FOR SAFETY & CONSTRUCTABILITY: Establish Program & conduct Ongoing Constructability/Safety Design Sessions

28

APPENDIX C3 PM-FEP-GDLN-001 FRONT END PLANNING

J. Fish

Rev 1 11-29-08

Page: 20


FEP 3 TASKS

FRONT END PLANNING (FEP) WORK FLOW PROCESS 15%

10% FEP 2 PROCESS Engineering Alternative Selection

PDRI To Align Team & Identify Critical Tasks/Elements

PROCESS Lessons Learned SIMPLIFICATION Preliminary Hazards Review

Early RISK Identification & Mitigation Plan

Design Management Plan

FEP 2 PFD's

PLOT PLAN

EQUIPMENT LIST

SCOPE DEFINITION PHASE FEP 3 One Line Pipe Routings (Rack Loading)

Lessons Learned

PDRI INFO MGMT PLAN (PIMS)

Cost & Schedule Risk Analysis to establish Contingencies

Constructability Check List RISK/THREAT Identification & Mitigation Plan

CLASS II

Decision DEVELOP P&ID'S ESTIMATE

Team Integration Session 1

Responsibility Matrix

Process Simplification

Establish AREAS CBS/WBS

Construction Management Plan

CONTRACT & PROCUREMENT STRATEGY

SPECIALISTS Participation Plan

Piping/Mech Pipe Stress Strategy Mtg VALUE ENGINEERING INTERACTIVE

PLANNING SESSION P&ID's ISSUE FOR APPROVAL

CONTRACT & PROCUREMENT Detailed PLAN

PDRI

Update RISK/THREAT Identification & Mitigation Plan FREEZE P&ID’s & scope as basis of Estimate P&ID's ISSUE FOR DESIGN

CONDUCT HAZARDS REVIEW

SOURCE INSPECTION PLAN

Validate Existing Site Conditions

PERMITTING PROCESS

QA/QC Mgmt Plan

Optional

Materials Mgmt PLAN

P&ID'S ISSUED FOR COMMENT

SPLIST Tie-In List

PDRI

Cost & Schedule Management Plan

FEP 3

-15%, 25%

FEL 2 Deliverable Listing

Instrument Index

Initiate PERMITTING PROCESS LINE LIST

DEVELOP PERMITTING PLAN

25-30%of Engineering

Cost & Schedule Risk Analysis to establish Contingencies P&ID Changes must be managed via formal MOC

CLASS III ESTIMATE -10%, +10%

Owner Turnover Plan for Commissioning & Start-Up

EQUIPMENT LOCATION DRAWINGS

Change Mgmt & Contingency Management Plan

Develop Conceptual 3D Model to support Constructability, Operability & Maintainability reviews

SAFETY Mgmt Plan

DEVELOP MATERIALS MANAGEMENT PLANNING FOR ENGINEERED EQUIP , FABRICATED PIPE/STEEL, THEN BULKS ENGINEERED EQUIPMENT - DEVELOP EQUIPMENT DATA SHEETS

ENGINEERED EQUIPMENT - INQUIRY & BID EVALUATION EFFORT OPERABILITY, RELIABILITY, & MAINTAINABILITY PLANNING & REVIEWS

John Fish PM-FEP-WFD-005 Single Slide.PPT Rev 20 FEB 2010 jrfish@fbd.com

DESIGN FOR SAFETY & CONSTRUCTABILITY: Establish Program & conduct Ongoing Constructability/Safety Design Sessions

29

APPENDIX C4 PM-FEP-GDLN-001 FRONT END PLANNING

J. Fish

Rev 1 11-29-08

Page: 21

FRONT END PLANNING GUIDE  

This is a quick reference guide developed to help S&B and FB&D Project Managers define the Project Scope of work prior to the estimate using...

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