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

316 Pages·1998·9.53 MB·English

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
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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
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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