International Approach to Predicting Construction Labour Hours

International Approach to Predicting Construction Labour Hours

Speaker – Shane ForthVice President – Association of Cost Engineers

Manager of Project Controls – AMEC Power and Process Europe

Siberian Regional Cost Estimating Centre

International Research and Practice Conference

10th – 11th November 2009 – OMSK, Russia

2

Shane Forth FACostE, FAPM

Power and Process Europe– Project Controls Strategy – Operational Excellence– AMEC Project Management Academy– Project Support

Whessoe Oil & Gas– Bid Manager and Project Services

Kuwait Santa Fe Braun– Scheduling Engineer

Other Experience – Kvaerner, ICI, Simon Carves, John Laing

Association of Cost Engineers– Vice-President – Chairman, Planning & Scheduling SIG

– Chairman Project Control Managers Working Group

– Various Working Groups, Graduate & Apprenticeship Schemes Occupational Standards

3

Estimate Accuracy

There is no merit in attempting to achieve a level of accuracy that is inconsistent to the amount of information available, particularly as this could lead to the Estimate being given a ”perceived” credibility it does not deserve

4

Estimate Accuracy Est

imate

Acc

ura

cy

Completeness of Design0% 95%

1 Feasibility (- 25% to + 50%)

3 Basic Design (- 10% to + 15%)

4 Detail Design (- 5% to + 10%)

+

_

2 Concept (- 15% to + 25%)

5

Information for EstimatingGeneralised scope definition

Required capacity of plant

Approximate Weights

Preliminary project schedule

1 Feasibility

6

Information for EstimatingPlant Location

Preliminary process diagram

Main statutory requirements

Equipment list

Outline engineering specifications

Preliminary “block” plot plan

Offsites and utilities by system and capacity

Budget quotes for Equipment

Preliminary equipment data sheets

Preliminary process and instrument diagram

2 Concept

7

Information for Estimating3 Basic Design Firm quotes for major equipment

Detailed scope definition

Finalised heat and mass balance calculations

P & ID’s for process and offsites

Detailed plot plans

Detailed engineering specifications

Preliminary Material Take Offs

Operators requirements

Local authority requirements

Project master schedules

Information on site conditions

8

Information for Estimating4 Detail Design Local availability of labour and materials

Detailed equipment list

Completed and approved plant layout

Electrical single line diagrams

Detailed equipment specifications/data sheets

Detailed material take offs

Firm quotations from potential vendors

Quotations from potential contractors

Commissioning and operating information

Installation and fabrication specifications

Construction subcontract enquiries

Production design phase continues

9

1 Feasibility - Factors

Cost x 6.0

Cost x 5.0 Cost x 4.0

Cost x 3.0

Estimated Total Installed Cost (from which construction manhours can be estimated)

10

1 Feasibility - Factors

Construction % of Total Installed CostAverage Labour Manhour Rate

= Estimated Construction Manhours

11

1 Feasibility - Order of Magnitude

12

1 Feasibility - Order of Magnitude

13

2 Concept - Principle Quantities

Piping

Pipework

Supports

Tests

Valves

Metres

Tonnes

No off

No off

75000

200

40

300

E & I

Electrical cable

Instrument cable

Electrical devices

Motors

Instruments

Control Systems

Metres

Metres

No off

No off

No off

I/O Count

100000

50000

800

26

400

6000

UnitQty

Unit of Measure

14

Onshore 1 Feasibility(typically - 25 % to + 50 %) In house Estimates for Equipment and

Tagged Items Factored from Equipment and Tagged

Items for Bulk Materials Order of Magnitude from historical data on

similar projects Estimate for Project Sanction

2 Concept(typically - 15 % to + 25 %) Preliminary details from suppliers for Major

Equipment and Tagged Items Principle quantities (approximate) for

bulk materials Base norms adjusted for location factors

and productivity assumptions Estimates for Optioneering

3 Basic Design(typically - 10 % to + 15 %) Firm details from suppliers for 80%-90% of

Equipment and Tagged Items Preliminary MTO – in house, forced detail Base component norms adjusted in house

for location factors and productivity assumptions, or as provided by subcontractors

Target Cost Estimate

4 Detail Design(typically - 5 % to + 10 %) Firm details from suppliers for 90% -100%

of Equipment and Tagged Items Intermediate and Final MTO’s Base component norms adjusted in house

for location factors and productivity assumptions, or as provided by subcontractors

Definitive Estimate

15

Offshore 1 Feasibility(typically - 25 % to + 50 %) In house Estimates for Equipment and

Tagged Items Estimated Weight Order of magnitude from historical data on

similar projects Estimate for Project Sanction

2 Concept(typically - 15 % to + 25 %) Preliminary details from suppliers for Major

Equipment and Tagged Items Estimated Weights for Bulk Materials Base norms adjusted for location factors

and productivity assumptions Estimates for Optioneering

3 Basic Design (typically - 10 % to + 15 %) Firm details from suppliers for 80%-90% of

Equipment and Tagged Items Preliminary MTO – in house, forced detail Base component norms adjusted in house

for location factors and productivity assumptions, or as provided by subcontractors

Target Cost Estimate

4 Detail Design(typically - 5 % to + 10 %) Firm details from suppliers for 90% -100%

of Equipment and Tagged Items Intermediate and Final MTO’s Base component norms adjusted in house

for location factors and productivity assumptions, or as provided by subcontractors

Definitive Estimate

16

Shutdown Rough Estimate 500 Jobcards

7000 Activities = 140,000 Manhours 20 Manhours per Activity

Improved Estimate- Lump Sum, must exclude emergent work- For repeat shutdown at the same plant,

estimate manhours using historical data- Visit site during tender period for preliminary

discussions and assessment - especially important for unfamiliar plant

For Poorly Defined scopeEstimate in manhour ranges+ management fee

116

89

75 71

49

30 3023

17

0

20

40

60

80

100

120

VesselsInspect

Control Valves

Exchangers Drums NRVs FinFans

Pumps Towers Other

17

Shutdown Preparation (typically 6 months)

B Assess Workscope

A Preliminary Turnaround list

E Prepare Jobcards (activities, manhours, etc)

D Prepare Work Packs

F Preliminary Plan

C Outline Plan

G Review Preliminary Plan

H Final Plan and Manhours Agreed

Tender Period (typically 2 months)

Shutdown Event (typically 3 weeks)

J Shutdown Event

18

Shutdown

19

Estimate - Base Norms Location Factor Adjustments

20

Estimate – Base Norms Project Specific Adjustments

Considerations Climate

Site Layout and Access

Site Location – How Remote ?

Clock In and Walking Time to Workface

Work Days and Hours

Labour Density

Industrial Relations

Availability of Skilled Trades (Competing Projects, use of Local & Travelling Labour)

Use of Equipment, Working Methods (eg.Machine or Hand Excavate)

Permit to Work on Brownfield Sites

Contract Conditions

21

Engineering Material Cutting Construction

Growth Take Off & Waste Increase Allowance Allowance Allowance Allowance

Estimate - Quantity Allowances Certain quantity allowance may also be applied to the base estimate for expected but unidentified work:

Anticipated design growth due to internal design changes

Anticipated amount of materials that is cut and wasted (eg.due to standard pipe lengths, loose flanges

Applied to construction labour, equipment and services due to anticipated Engineering Growth Allowance

Applied to for additional materials to be supplied due to anticipated Engineering Growth Allowance

22

Component Norms - ConstructionINDEX

1

23

Component Norms - ConstructionINDEX

2

1

24

Component Norms - ConstructionINDEX

32

1

25

Component Norms - ConstructionINDEX

4

32

1

26

Construction Manhours PredictionINDEX

1 Estimated Manhours = Component Norms x Estimated Quantities

27

Construction Manhours PredictionINDEX

1 Estimated Manhours = Component Norms x Estimated Quantities 2 Revised Manhours = Component Norms x AFC Revised Quantities

28

Construction Manhours PredictionINDEX

1 Estimated Manhours = Component Norms x Estimated Quantities 2 Revised Manhours = Component Norms x AFC Revised Quantities3 Achieved Manhours = Component Norms x Installed Quantities

29

Construction Manhours PredictionINDEX

1 Estimated Manhours = Component Norms x Estimated Quantities 2 Revised Manhours = Component Norms x AFC Revised Quantities3 Achieved Manhours = Component Norms x Installed Quantities4 Actual Manhours = Expended Manhours

30

Construction Manhours PredictionINDEX

1 Estimated Manhours = Component Norms x Estimated Quantities 2 Revised Manhours = Component Norms x AFC Revised Quantities3 Achieved Manhours = Component Norms x Installed Quantities4 Actual Manhours = Expended Manhours5 Predicted Manhours = Actual Manhours + Productivity Forecast for Revised to go

31

Construction Manhours PredictionINDEX

1 Estimated Manhours = Component Norms x Estimated Quantities 2 Revised Manhours = Component Norms x AFC Revised Quantities3 Achieved Manhours = Component Norms x Installed Quantities4 Actual Manhours = Expended Manhours5 Predicted Manhours = Actual Manhours + Productivity Forecast for Revised to go

This is part of Earned Value Analysis (EVA)

32

Estimating – Historical Data

The Solution

Key Aspect Production of accurate estimates from high quality estimating base data

Past projects close-out information and statistics Bulk material quantities, weights and costs Engineered items details and costs

Project Controls Information (documents, changes, man-hours and costs)

must be processed promptly at project completion to maintain factors, norms etc.

33

Thank you for your attention.

Excellence in Cost Engineering

www.acoste.org

The Association of Cost Engineers