The following abstracts have been submitted for consideration for the 2014 Annual Meeting in New Orleans, LA. The final program will consist of approximately 100 tracks.
(OWN-1493) Developing Owner Requirements for Changes in the Work (Change Orders)
Primary Author: Mr Jeffery J Borowicz CCP CEP PSP DTE Energy - Detroit Edison / Michcon
Abstract: Many Capital Project owners do not have a contractual method of administering "Changes in the Work" as applied in Capital Improvement projects. Many owners rely on contractors, subcontractors, architects and engineers to provide details of their change, but owners have to sort through the quotations that are unorganized, inconsistent or misleading.
This paper will explore the criteria associated with developing Change Order (CO) language for Owners that will help facilitate proper submittal of change orders by contractors, subcontracts, Architects and Engineers. Paper will also discuss method for incorporating into Terms and Conditions of the contracts, as well as, the Owner review process of checking the CO's for accuracy and consistency, as applied to the contract document language, so the contract terms are enforced.
(OWN-1507) Establishing Business Management System for Oil and Gas Projects
Primary Author: Mr Sean T. Regan CCP CEP Jacobs Engineering Group Inc
Abstract: Currently many owners are implementing new projects in the oil and gas field with a current trend of small to medium companies implementing expansion projects in the field as such they do not have the experience within the refineries to implement the business management programs required to develop capital EPCM projects. This presentation is based on the implementation of an Integrated Project Management Team (IPMT) to develop the Business Management aspects of the program. The program will review development and demonstrate examples of:
(OWN-1512) Lessons learned process to manage Future Projects
Primary Author: Mr Nkosinathi Clayton Banda Sasol Petroleum International
Abstract: Lesson learned are very important in managing current and future projects this helps to improve organization processes, systems, procedures and policies. When we fail to learn from one project to other projects we tend to repeat the same mistakes again and again. If we also dont learn from project successes we also miss the opportunity to implement good systems and practices to successfully complete existing and future projects. Therefore it is important that lessons learned should be an-ongoing effort throughout the life of the project these lessons are gathered, analyzed and recorded in a lesson learned register and shared with other existing project team , future projects and other colleagues within the organization either in a formal or informal manner. This technical paper will focus mainly on the lesson learned process in order to manage future projects, this is important in project management in order to evaluate the project performance and improvements .A register of these lessoned learned is crucial so that improvements and challenges that were identified are considered when starting future projects and produce a formal or informal report with findings and also outlining actions that are needed to enhance and ensure success in the future projects. No one remembers an effective start-up, but everyone remembers an ineffectiveness of the project the consequences are felt for a long time (Frigenti and Comminos). Therefore this consequences should be managed efficiently and proactively to minimize the risks of having some mistakes and failures.
(OWN-1515) Cost Management of Mega Shutdowns
Primary Author: Mr Inderpal Dhillon Suncor Energy Services Inc
Abstract: It is Oil and Gas industrys challenge to estimate cost of mega shutdowns (a.k.a. Turnarounds) to an acceptable accuracy. Further, containing actual cost within corporate tolerance of estimate variance is a nightmare. This challenge is primarily due to large volume of cash spent on these events and the speed with it is spent. On a mega turnaround, an organization can spend $8-$10 million CAD a day for the peak of the event. The peak might last 20-25 days in a 40 day shutdown. Overall cost of such event is about $500 million. Total cost includes planning, preparation, pre & post turnaround activities and commissioning & startup. The challenge is further complicated with level of uncertainty of reliability of the asset. Schedule takes precedence over cost due to lost revenue which is stakeholders primary interest.
This paper will primarily focus on:
Steps for preparing estimates when scope is not firm
Challenges for containing cost when schedule is priority
Current and expected cost management practices and
Management information system for mega shutdowns.
(OWN-1541) Can Project Management Contractors fill Owners' Cost Engineering Needs for Major Capital Projects?
Primary Author: Mr Stephen L. Cabano Pathfinder LLC
Co-author(s): Mr Paul G Williams Pathfinder, LLC
Abstract: As Capital projects in the Chemical Process Industry become larger and more complex, many right-sized owner organizations find themselves resource-limited in all facets of managing these projects. The Cost Engineering function is no different. One option that owners have adopted is the application of a Project Management Contractor (PMC), who works on behalf of the owner overseeing all project activities. Many questions arise, however - Are these effective? Can a traditional engineering contractor provide the unbiased and owner-oriented support the owner requires? Are the engineering and construction execution contractors willing to work under such an arrangement? This paper will define this PMC approach and provide guidelines for an effective Cost Engineering environment on major projects applying the PMC support strategy. The paper will also address effective techniques for defining the PMC scope and selecting the optimum PMC. Worldwide lessons learned will be shared and discussed.
(OWN-1545) Owner Cost Estimate Reveiws
Primary Author: Mr Allen C Hamilton CCP Project Management Assoc LLC
Abstract: A critical point in the progression of any project is the decision to commit significant resources and implement the project. Before proceeding for approval, project teams find it useful to have a third party review the cost estimate. The review is to ensure the basis, data and assumptions are consistent with expected project outcomes and identify any areas of concern. The paper will primarily address the appropriation estimate but other cost estimate reviews will be covered. The timing and use of periodic cold eyes reviews will be discussed. The planning, interviews, reviews and report for the cost estimate review will also be discussed. The author will present his extensive experience and hands on work in the understanding of these activities.
(OWN-1547) IMPROVING OWNERS COST ESTIMATING PROCESS AND PRACTICES - NOC PERSPECTIVE
Primary Author: Mr Johnson Olugbelenke Awoyomi CCP Nigerian National Petroleum Corp
Abstract: A National oil Company (NOC) in Africa created a Cost Engineering Division (CED) in 2011 to serve its entire value chain. This paper is premised on the approaches and lessons gained in setting-up/running this effort. Prior to 2011, all the various units of the NOC were preparing own cost estimates /budgets without any basis, consistency and guidelines. The AACE International TCM Frameworks and RPs Numbers 34R-05 (Basis of Estimate) and 31R-03 (Reviewing, Validating and Documenting the Estimate) were used as guide to develop foundational cost engineering procedures and trainings. Another key focus is awareness creation for cost engineering because setting up a CED in an NOC is fraught with challenges of acceptability and change culture. The paper underscores the amazing value additions in terms of savings (in-house estimates Versus Best Practices) and shows how it has helped to optimize costs resulting in better control of budgets. And is now viewed as a management tool for project sanctioning. Finally, the paper identifies a number of issues and offer solutions for the benefit of AACE International and the industry.
(OWN-1549) Camp Costs Optimization for Mega Oil/Gas Projects
Primary Author: Mr Yuhong Wu CCP Suncor Energy Services Inc
Abstract: More and more mega Oil/Gas projects are constructed in remote areas with associated lenthy construction durations, and owner companies always need to provide site camp services for construction contractors and vendors throughout the construction period. Camp cost is very significant in the construction indirect cost as well as in Owner Companys total project cost (TPC) estimate for a mega project. This paper presents an integrated approach to minimize the overall camp cost from Owner Companys perspective, by means of performing overall project schedule resource leveling/smoothing to decrease the manpower loading peaks, adopting hoteling strategy with consideration of proper work shifts in project/construction execution plan to enhance camp utilization, as well as conducting scenario analysis and optimization of owner owned camp operation cost and third party camp rental cost. The case study on a mega Oil/Gas project by utilizing this integrated approach also shows a very promising result on camp cost savings.
(OWN-1560) Oil & Gas Reimbursable Construction Contracts Cost Management - An Owner's Perspective
Primary Author: Mr Moses Yaw Nkuah FRICS CCP Imperial Oil Resources
Abstract: Over the past decade, there has been an unprecedented expenditure on capital projects in the Alberta oil and gas industry. The execution of these projects mainly follows a cost-reimbursable/cost-plus contract. Under this type of contract, the owner pays the contractor for all necessary and reasonable expenses incurred, in addition to a fee to cover the contractors overhead and profit. Cost-reimbursable contracts are typically used because the owners want to start a project immediately, without complete engineering details, plans and specifications. Additionally, there are many uncertainties associated with oil and gas projects in Alberta that the majority of contractors do not want to assume the risk of a fixed price contract. It is obvious that the owner assumes almost all the risk of increased costs.
Therefore, the control of these expenditures is paramount in order for the executing organizations to avoid excessive financial consequences. The purpose of this article is to explore the cost management best practices that can be used on an oil & gas reimbursable construction project from an owners perspective.
(OWN-1564) Third Party Cold-Eyed Estimate Reviews and Validations
Primary Author: Mr Douglas W Leo FRICS CCP CEP Saybrook Associates Inc
Co-author(s): Dr Stephen P Warhoe PE CCP CFCC SP Warhoe LLC
Abstract: Owner Companys capital projects are ever increasing in scope, scale, costs and strategic importance. In order to gain confidence around the accuracy and adequacy of capital project estimates, it is become the norm to request third party cold-eyed reviews and validations of the cost estimate before seeking final sanction of the project. These reviews are often conducted under tight time constraints given the push for final approval of the project. Using past mega project case studies, this paper will focus on how to conduct such a cost review and what high impact areas of the estimate with which to concentrate. It will address all the differences between conducting an estimate review and conducting an estimate validation. It will look at how to provide the qualitative review and the quantitative validation under the definite limitations of time. Both owners and reviewers will be provided with a better understanding of the realistic expectations from the third party estimate review.
(OWN-1566) Behind the Perception of Chronic Public Works Cost Overruns
Primary Author: Mr William M Hart PE CFCC PSP Marsh Risk Consulting
Abstract: We have all read accounts of government-funded construction projects that greatly exceed original estimates of cost and schedule. The perception of some people is that this is the norm for public works and that these failures are simply a manifestation of government's inability to manage effectively and operate efficiently when compared to the private sector. That there are problems on public works projects, as with any projects, is an accepted fact. First, this paper evaluates the true extent of those problems by reviewing statistical data on Federal, state, and private project performance. Public works cost overruns are then analyzed in greater depth by utilizing case studies to consider: the way in which public projects are justified, the role of politics in the decision-making process, estimating and change order practices, contracting practices and, the special requirements/limitations placed on public projects. Through this discussion, the unique sources of public works cost overruns are identified and recommendations for improving public project performance are provided.
(OWN-1588) Cost Exposure for Development Projects: A Front End Loading (FEL) Lesson Learned
Primary Author: Mr Trian Hendro Asmoro ST CCP PT Medco E&P Indonesia
Co-author(s): Mr Rosy Julianto PT Medco E&P Indonesia
Abstract: The ultimate objective of the gas development project is to deliver the gas sales to selected buyers as per agreed schedule and price. With limited gas reserves and high development costs due to sour gas facilities, the cost exposure during the Front End Loading (FEL) process is very critical.
FEL stages used to evaluate a completed project have limitations in observing the project cost. The cost estimation level is developed and improved in accordance with three FEL stages Appraise (FEL1), Select (FEL2) and Define (FEL3), prior to the execution phase. Although the actual cost will be realized after execution, the projective project cost needs to be confirmed at the end of FEL 3.
This paper concludes that the characteristics of cost exposure during the development of a project or FEL stages must be identified and understood by the company. By recognising lessons learned from a sour gas facilities project which did not comply with the proper FEL process, the company is therefore able to foresee the project risk, particularly regarding the project cost.
(OWN-1592) Owner's Guidelines for Specifying Schedule Deliverables from EPC Contractors
Primary Author: Mr Himansu Bhaumik PE Duke Energy
Abstract: Many of the large scale projects implemented around the globe suffer from schedule delays due to variety of reasons. One of the reasons is the failure on the part of the EPC contractor to prepare a meaningful schedule in a timely manner and detailed to the appropriate level as demanded by the complexity and size of the project. Part of this fault goes to the Owner for not specifying the schedule deliverables during the early part of the project. Usually a lot of attention is devoted to the preparation of the scope of work and engineering specifications during the FEED stage, while the schedule deliverable needs are, to a large extent, neglected. A well documented specification for schedule deliverables will go a long way to insure that the EPC Contractor is bound by set of definitive requirements. This paper discusses in detail the usual project needs for schedule deliverables. It recommends a check list for the Owner for specifying such deliverables required from the EPC or the Managing Contractor.
(OWN-1601) Solutions to national content goals in developing markets
Primary Author: Ms Ksenia Kleban
Abstract: Imposing concepts of cost stewardship in developing countries by on job mentoring and delegating of job ownership to national staff. Project execution in developing countries requires national content development with the target to have national staff fully trained for long-term production. Due to the limited exposure to modern business practices, a main challenge is to teach national staff to think long term/tomorrow versus short term/today. A method of on job mentoring and sharing a job between expatriate and national staff that combines contracts administration of generic reimbursable order with work in progress stewardship.
(OWN-1640) San Francisco Public Utility Commission (SFPUC) Program Controls System
Primary Author: Mr Mojgan Yosefkhan San Francisco Public Utility Commission
Abstract: The SFPUC is a City department that provides retail drinking water and sewer services to San Francisco, wholesale water to three (3) other Bay Area Counties, and hydroelectric power to San Franciscos municipal operations. The SFPUC supplies drinking water to 2.5 million customers in the four (4) Bay Area counties of Alameda, Santa Clara, San Mateo and San Francisco. Headquartered at 525 Golden Gate Avenue in San Francisco, the SFPUC has approximately 2,000 employees with a combined annual operating budget of approximately $400 million.
The purpose of this paper is to provide an overview of the SFPUCs Oracle Primavera-based program controls system, as an effective management tool for implementation of major capital improvement programs such as the Water System Improvement Program ($4.6 Billion) and the Sewer System Improvement Program ($6.9 Billion). In addition, this paper explains how this tool empowered project managers to monitor budget and schedule, measure performance, forecast project status at completion, identify pitfalls and proactively develop mitigation plans to avoid or minimize cost overruns and delays.
(OWN-1641) Strategies to Reduce Risks for Utility Owners on Transportation Projects
Primary Author: Ms Maureen Melis Wakeland Texas Department of Transportation (TxDOT)
Co-author(s): Ms Charon Williams Texas Department of Transportation (TxDOT)
Abstract: State Departments of Transportation are responsible for delivering multi-modal transportation projects to serve the needs of the traveling public, which includes the coordination of impacted utility facilities. The utility accommodation process often delays transportation-project delivery which, in turn, increases associated costs. This paper will describe strategies to overcome project delivery concerns to include best practices for enhanced partnerships and integrated project scheduling techniques. As part of the process, it was found that earlier utility industry involvement, collaboration efforts during routine utility coordination meetings, development of cohesive project schedules and adoption of enterprise scheduling tools, all contribute to the reduced risks of project delays and cost overruns. Ultimately, application of these strategies will result in improved efficiencies and effectiveness of capital-project programs.
(OWN-1655) Project Portfolio Management
Primary Author: Mr Alfred J. Soltesz Berkeley Research Group
Co-author(s): Mr Lawrence A Bastianelli CCP Berkeley Research Group LLC
Abstract: Project Portfolio Management is one of the four aspects of a total Management of Projects organizational system. Portfolio Management aligns the portfolio of individual projects and programs with strategic corporate goals.
This paper describes the concepts of Portfolio Management and its relation to corporate strategy and goals. The various levels of portfolios and the differences between them are described. The paper also reviews the differences between an owned portfolio and a managed portfolio.
The paper then covers processes involved in Portfolio Management, including:
Process for generating project/program ideas
Gated process for project selection
Identification of corporate objectives
Fit of a project/program into the overall corporation
Shared portfolio risk and allocation across the portfolio
Allocation of critical resources to projects
Project portfolio performance monitoring and reporting
Final project performance evaluation/lessons-learned feedback
(OWN-1670) Integrated Project Reporting using Dashboards: harnessing the power of Primavera P6
Primary Author: Mr John Wallace Blodgett Pacific Gas & Electric Co
Co-author(s): Mr Brian Criss PSP DR McNatty & Associates Inc
Abstract: "Integrated Reporting" can be accomplished by using reporting and dashboard tools that support accessing multiple data sources directly or through a data warehouse. The data sources can include Primavera P6 a financial tool such as SAP and/or internal home-grown databases. The data warehouse is the "central" database containing data with differing structures used in producing reports that incorporate the data directly from their auditable source databases. The report/dashboard is supported by programming to align the data based on common elements to provide Enterprise level information, supported by individual system audit reports. A further objective is to move beyond siloed spreadsheet data by incorporating various sources into a single source of consolidated information. The data warehouse can also be used to store snapshots of datasets in order to perform trending and analytics. This paper will discuss the business case for developing dashboards an example case-study of an existing dashboard developed and used by a Utility company and alternative approaches, such as off-the shelf Analytics offerings.
(OWN-1680) Owner Assurance Reviews: What to Consider?
Primary Author: Mr Christopher P Caddell PE CCP DRMP Turner & Townsend
Abstract: Most owners conduct some type of assurance review on a project prior to sanction to ensure it has been properly developed, including the scope, cost, schedule, and other parameters. However, how owners conduct these reviews and the depths to which they probe can vary widely. If the assurance review is not comprehensive enough, the project may appear to be adequately developed but in reality have major flaws. This paper outlines the key focus areas and the details around each that a proper assurance review should address. Key focus areas include corporate objective alignment, stakeholder involvement, scope development, execution planning, quality standards, procurement strategies, cost estimates, schedule development, project documentation, project team capability, and risk management. A proper assurance review should involve the appropriate subject matter experts looking at the details for each of these areas to ensure the project has been sufficiently developed to proceed to execution and is set up for success.
(OWN-1695) Games Contractors Play
Primary Author: Mr Joseph A. Lukas PE CCP PMCentersUSA
Abstract: Most private corporations and many government agencies have greatly reduced their internal staffing in non-proprietary job functions, including their projects organization. At best, these organizations may have some internal Project Managers, a few cost management personnel and some engineers. This means organizations have to rely on contract suppliers of engineering, construction and even project management to get new capital assets installed. These organizations need expertise in contracting work to ensure work is done efficiently for the best price and schedule. Unfortunately this isnt always the case!
This presentation will cover the top 10 most popular games contractors use to maximize their profits on contracted work. Specific examples will be discussed based on the presenters experiences working as both the owner and service provider. The techniques used by contractors that will be covered will span from the proposal, project staffing, schedules, invoicing and the use of change orders. The advantages and pitfalls in using alliance relationships will also be discussed. Attend this presentation and learn how to better manage your suppliers of project services.
(OWN-1716) Establishing a client estimating department
Primary Author: Mr David Colangelo CCP Kinross Gold Corporation
Abstract: Clients who are in the business of delivering projects or face many challenges when it comes to organizing resources specific to estimating. While some corporations can afford an entire projects delivery group or department, there are companies who simply cannot. This article will review some of the issues faced by clients in establishing an department or capabilities from the ground up. It is important that the basic elements are established right from the outset, setting the solid base to continue to grow with the organization going forward. Assembling the right people or team, developing estimating guidelines and standards, WBS standardization, estimating tools and templates, reference resources and software are the topics which are important first steps in establishing an estimating department or capabilities.
(OWN-1746) Advancing Data Exchange for Development and Management of Real Property
Primary Author: Mr William H Hunt CCP CEP PSP General Services Administration (GSA)
Co-author(s): Mr Michael D. Dell'Isola PE Faithful+Gould; Mr James R. Watson
Abstract: The result of past changes in technology and real property management processes has increased the need for more effective data exchange among all parties involved. Published classification systems such as UNIFORMAT II and OmniClass have been developed to organize various aspects of building elements, products, and attributes serving maintenance, operations, construction, information modeling and much more.
This presentation provides the findings of a recent research project by GSA to evaluate lessons learned and address the lack of connectivity between planning, design/construction, and operations/maintenance.
A critical conclusion is that current classification systems are not sufficiently granular to allow for accurate definition of the built environment and to also connect Capital Planning, Project Execution, Facility Operations, Maintenance, Renovation, and Asset Management Systems.
The methodology provides a granular, relational structure to serve as an industry standard for integrated management of owners portfolios of real property assets, enhance the way design, construction and property management define the built environment, improve estimating and increase utilization of technologies such Building Information Modeling (BIM) and Computerized Maintenance Management Systems (CMMS).