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Industrial Engineering Projects: Practice and procedures for capital projects in the engineering, manufacturing and process industries PDF

316 Pages·1998·9.53 MB·English
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Industrial Engineering Projects Practice and Procedures for Capital Projects in the Engineering, Manufacturing and Process .Industries The Joint Development Board An Imprint of Chapman & Hall London . Weinheim . New York . Tokyo . Melbourne . Madras Published by E & F N Spon, an imprint of Chapman & Hall, 2-6 Boundary Row, London SE18HN, UK Chapman & Hall 2-6 Boundary Row, London SE1 8HN. UK Chapman & Hall, GmbH, Pappelallee 3, 69469, Weinheim, Germany Chapman & Hall USA, 115 Fifth Avenue, New York, NY 10003, USA Chapman & Hall Japan, ITP-Japan Kyowa Building, 3F, 2-2-1 Hirakawacho, Chiyoda-ku, Tokyo 102, Japan Chapman & Hall Australia, 102 Dodds Street, South Melbourne, Victoria 3205, Australia Chapman & Hall India, R. Seshadri, 32 Second Main Road, CIT East, Madras 600 035, India First edition 1997 O 1997 E & FN SPON Typeset in 10 1'2 on 12pt Times by On Screen, West Hanney, Oxfordshire Printed in Great Britain by Cambridge University Press, Cambridge ISBN 0 419 22510 2 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the UK Copyright Designs and Patents Act, 1988, this publication may not be reproduced, stored, or transmitted, in any form or by any means, without the prior permission in writing of the publishers, or in the case of re- prographic reproduction only in accordance with the terms of the licences issued by the Copyright Licensing Agency in the UK, or in accordance with the terms of li- cences issued by the appropriate Reproduction Rights Organization outside the UK. Enquiries concerning reproduction outside the terms stated here should be sent to the publishers at the London address on this page. The publisher makes no representation, express or implied, with regard to the ac- curacy of the information contained in this book and cannot accept any legal respon- sibility or liability for any errors or omissions that may be made. No responsibility for loss occasioned to any person acting or refraining from action as a result of the material included in this publication can be accepted by the author or the publisher. A catalogue record for this book is available from the British Library LCCP no: 9746020 Printed on permanent acid-free text paper, manufacturedi n accordance with @ ANSIINISO 239.48-1992 (Permanence of Paper) Contents i;. Preface Foreword xiii r' 1 Introduction 1.1 Owner involvement 1.2 Complexity 1.3 Management 1.4 Information control and reporting 1.5 Time 1.6 Safety, quality and environmental issues 1.7 Estimating and risk 1.8 Cost control and reduction 1.9 Terminology 1.10 Non-standard documentation 1.1 1 Conclusion 1 b 2 Management of engineering projects 2.1 Introduction 2.2 Project manager 2.3 Project organization 2.4 Outside influences 2.5 Corporate and co-venturer's requirements 2.6 Project execution plan (quality plan) 2.7 Project stages 2.8 Construction 2.9 Initial operations 2.10 Project risk analysis and management 2.11 Safety, environment and quality assurance 2.12 Latham and CRINE 2.13 Insurance 1 Bibliography 3 Estimating 3.1 Introduction 3.2 Initial actions 3.3 Estimating accuracy 3.4 Stages in estimate preparation 3.5 Estimate types 3.6 Hierarchical composite rates II contents 3.7 Man-hour norms 3.8 Escalation, exchange rates and financing charges 3.9 Contingency allowance 3.10 Risk analysis and evaluation 3.11 Estimate content 3.12 Interfaces 3.13 Monitoring change 3.14 Control by estimate 3.15 Continued use of estimate 3.16 Coding and control 3.17 Estimate presentation Bibliography 4 Value management 4.1 Introduction 4.2 Definition of value 4.3 VM definitions 4.4 Timing of studies 4.5 Value management methodology and job plan 4.6 Conclusion 5 Project services 5.1 Introduction Part I Cost control 5.2 Objectives 5.3 The control estimate 5.4 Cost segregation 5.5 Approval of funds 5.6 Cost control techniques 5.7 Contingency management 5.8 Escalation 5.9 The cost control report 5.10 Other reports Part 2 Planning and progress control 5.11 Introduction 5.12 The importance of planning 5.13 Organization 5.14 Levels of planning 5.15 Network techniques 5.16 Critical path and float 5.17 Progress measurement 5.18 Continuing control Part 3 Document control 5.19 Introduction 1 Contents 5.20 Main activities 5.21 Control methods 5.22 As-built drawings 5.23 Reporting 5.24 Retention of documents Part 4 Material control 5.25 Introduction 5.26 Traceability 5.27 Coordination 5.28 Site storage 5.29 Spares 5.30 Close-out Part 5 Coordination of procedures 5.3 1 Introduction 5.32 Management procedures 5.33 Design procedures 5.34 Site procedures 5.35 Production of site procedures 5.36 Typical site procedures 5.37 People and procedures 5.38 Changes to procedures 5.39 Compliance 5.40 Conclusion Bibliography 6 Quality assurance 6.1 Introduction 6.2 Quality assurance 6.3 Total quality management 6.4 The standards 6.5 The systems 6.6 Procedures 6.7 Team quality 6.8 Subcontractor and supplier quality 6.9 Quality improvement 6.1 0 The way forward Bibliography 7 The contract 7.1 Introduction 7.2 Types of contract 7.3 Forms of contract 7.4 Terms and conditions 7.5 Definitions and interpretations 7.6 Scope of work 1 Contents Responsibilities Law and statute Damage, injury and insurance Subcontracting Time Variations Payment Testing, take-over and liability for defects Default and remedies Suspension and termination Resolution of disputes Supplementary and special conditions 8 Indemnities and insurances 8.1 Introduction 8.2 General 8.3 Definitions 8.4 Need for indemnities and insurance 8.5 Provision of insurance 8.6 Specialist advice 8.7 Standard conditions of contract 8.8 Contractor1subcontractor 8.9 Indemnities 8.10 Drafting of clauses 8.1 1 Problem areas 8.12 Current practices 8.13 Amended documents 8.14 Non-standard conditions of contract 8.15 Sound legal advice 8.16 Insuring clauses 8.17 Conditions and warranties 8.18 Types of insurance 8.19 Other forms of insurance 8.20 Risk management 8.2 1 Constructing the team Bibliography 9 Contractor/subcontractors election 9.1 Introduction 9.2 Selection strategy 9.3 Establishing selection criteria 9.4 Pre-qualification 9.5 Evaluation criteria 9.6 Shortlisting 9.7 Examination of company reports and accounts 9.8 Pre-qualification interviews Fi Contents ( 9.9 Contracting strategy 9.10 Tendering process 9.1 1 Types of tender 9.12 EC directives 9.13 Receipt and analysis of tender 9.14 Finalization of contract documents 9.15 Conclusion 10 Procurement of materials and equipment 10.1 Introduction 10.2 Scope of procurement activities 10.3 Requisitions 10.4 The procurement cycle 10.5 The procurement team 10.6 EU regulations 10.7 Communication 10.8 Terms and conditions 10.9 Certification and certifying authorities 1 0.10 Material traceability 10.11 Spares and special tools 10.12 Supplier data 10.13 Quality assurance 10.14 Pre-qualification of suppliers 10.15 Tender list 10.1 6 Enquiries 10.17 Expediting and inspection 10.18 Shipping/transport/insurance 10.19 Progress measurement and reporting Bibliography 11 Operational maintenance 11 .1 Introduction 11.2 Planning 11 .3 Estimating and budgeting 11.4 Contracting strategies 11 .5 Control of costs 11.6 Contractslfinancial audits 12 Health and safety and the environment 12.1 Introduction 12.2 Historical summary of legislation 12.3 The Health and Safety at Work Act 1974 12.4 Construction (Design and Management) Regulations 1994 (CDM) 12.5 References - 1 Contents 12.6 Maintenance of safety records on site 264 12.7 Statutory approvals for capital projects 264 12.8 Conclusion 267 Appendix A Glossary of terms 269 Appendix B Acts and Regulations pertinent to the construction industry 282 Appendix C Safety records required on site 284 Appendix D Example forms 286 Appendix E The Local Government (Access to Information) Act 1985 290 Appendix F Environmental impact assessment 292 Index 295 Preface The Joint Development Board (JDB), which is sponsored by The Royal Institution of Chartered Surveyors and the Association of Cost Engineers, is charged with raising the profile of project and commercial controls in the Engineering Industry. The JDB, which has previously published the Standard Method of Measurement of Industrial Engineering Construction, noted that there was no single source which imparted to the reader a clear, basic understanding of the manner in which industrial engineering projects were managed from feasibility through to commissioning and operation. The JDB also noted that a smaller workload and reducing margin had put all sides of the engi- neering industry under increasing pressure to improve the efficiency of their operations and the quality of its products. Efficiency and quality are not restricted to design and construction activities. For a project to be a commercial success the project must be managed and the twin parameters of cost and time must be effectively con- trolled, by systems and procedures which are themselves subject to continuous improvement. It was the recognition of the need to increase the efficiency and quality of project controls that prompted the JDB to produce this book, which aims to bring together the knowledge, skills and day-to-day practice of the engi- neering construction industry in the management and control of capital projects. The Members of the JDB (including co-opted Members) responsible for the preparation and production of this book are: A.E. Jackson, FRICS, MACostE (Chairman) AMEC Process and Energy Ltd D.R.D. Ainsley, FRICS A.L. Currie and Brown J.H. Blenkhorn, ARICS, MACostE, FInstPet Franklin and Andrews K.R. Cookson, FRICS Franklin and Andrews M.G. Leese, FRICS, FACostE, ACIArb Bahrain Petroleum Company M. Mitchell, ARICS British Gas plc P.J. McBrien, FCII, FIRM D.F. Parkinson, FRICS, Hon. FACostE Davis, Langdon and Everest V. Thompson, FACostE R.B. Watson, FRICS, MACostE Engineering Cost Management R.A. Webber, MACostE Jacobs Engineering B.G. Wheeler, FRICS, MACostE 1 ( preface On behalf of the JDB we wish to acknowledge the following for their invaluable help and specialist knowledge: I. McCallum, MACostE, MInstCES A. L. Currie and Brown G. Davies, MIQA, CEng AMEC Process and Energy Ltd R.R. Genillard, DMS, MIMgt, MCIPS AMEC Process and Energy Ltd J. Roberts, BSc, CEng, MIMechE Independent consultant together with Laporte Engineering Services for the use of certain forms and AMEC plc for the provision of photographs We would like to express our thanks on behalf of the Councils of the two spon- soring bodies to all those who have contributed so much of their time and effort in the production of this first edition and for the support of their companies. Alec Ray Jeremy Bayliss President President The Association of Cost The Royal Institution Engineers of Chartered Surveyors

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