Scope of Work in Petrochemical Project related to Project Management

This article is about Scope of Work in Petrochemical Project related to Project Management Personnel in Plants and Petrochemical Plants as per International Procedures, Codes & Standards. Here furthermore will be discussed about Contract Kick-Off Meeting for New Project, Design Review Meeting, Total Safety adoption at project site, Quality System, Cost Control and Forecasting, Schedule and Progress Reporting, Scope Change Procedure in Plant and Petrochemical Plants.

Scope of Work in Petrochemical Project related to Project Management Personnel in Plants, Contract Kick-Off Meeting for New Project, Design Review Meeting, Total Safety adoption at project site, Quality System, Cost Control and Forecasting, Schedule and Progress Reporting, Scope Change Procedure in Plant

1. Coordination and Design Review

1.1  Contract Kick-Off Meeting

A contract kick-off meeting will be held to review all aspects of the engineering, design, procurement, and construction management services to be provided by the EC. The location and format of this meeting will be described in the contract scope. The meeting shall take place within two weeks after the contract is awarded. The ENGINEERING CONTRACTOR shall keep detailed minutes of the meeting. The minutes shall include specific information on all agreements reached and all action items with the responsible party assignments. The meeting minutes shall be transmitted to Company.

The meeting will provide a forum for all parties to establish relationships, review schedule milestones, discuss, and plan key aspects of the contract execution strategy, and review other technical and administrative issues. Representatives from Company project management, engineering and design disciplines, and procurement and construction representatives will attend this meeting as necessary for the project scope.

For the contract kick-off meeting to be productive, the EC’s project manager and lead engineers/designers for each discipline must have:

    • Reviewed all of the information provided by Company.
    • Developed questions about any unclear project requirements.
    • Developed an execution strategy and a detailed schedule for review with Company.
    • Submitted the EC’s drawing and document register for Company’ review.
    • Advised Company before the meeting of any conflict(s) between referenced codes, standards and specifications, and any proposed deviation(s) or alternative(s) for Company to consider.

Agenda topics for the contract kick-off meeting may include:

    • Non-disclosure agreement (NDA) (when appropriate)
    • Scope of EC’s services
    • Technical scope clarification
    • Deliverables to be provided by the EC
    • Contract schedule
    • Codes, standards, and specifications
    • Cost control
    • Design change procedures
    • Progress reporting
    • Lines of communication
    • Country authority approval requirements
    • Procurement procedures (including expediting and inspection) if relevant
    • Construction management strategy if relevant
    • CAD strategy
    • Documentation control
    • Completeness of Company’ provided deliverables
    • Any missing information

The deliverables and design packages to be prepared by the ENGINEERING CONTRACTOR and the extent and timing of design reviews by Company will be fully discussed at this contract kick-off meeting. The accessibility and operability requirements for major equipment items shall be discussed and agreed to with Company before any detailed design is begun.

Separate meetings to develop individual design discipline execution plans in greater detail may be held at a later date(s) as required. Any such meeting(s) should occur before 5% of the discipline’s hours have been spent to ensure a clear understanding of project requirements and to avoid rework.

1.2  Design Review Meeting

All deliverables prepared by the ENGINEERING CONTRACTOR shall be checked by the ENGINEERING CONTRACTOR before being released for review by Company or the owner. Company will review work performed by the ENGINEERING CONTRACTOR as it proceeds during the engineering and design phase. Although all engineering and design activities by the ENGINEERING CONTRACTOR shall be under direct review by Company, this does not relieve the ENGINEERING CONTRACTOR for the overall accountability for the accuracy and quality of the work. Company will not perform a full design check of any ENGINEERING CONTRACTOR deliverables.

1.2.2   The contract scope shall provide the detailed schedule of individual drawings and documents to be submitted by the ENGINEERING CONTRACTOR to Company for review or approval.

1.2.3   The ENGINEERING CONTRACTOR shall schedule the submission dates of individual drawings and documents to ensure that a reasonable period of time (generally a minimum of 10 working days) is allowed for Company’ review without delaying the contract schedule. These submission dates shall be clearly identified on the drawing and document register prepared by the EC.

1.2.4   Company may visit the ENGINEERING CONTRACTOR at their design offices throughout the engineering and design phase. The number and duration of the visits will depend upon the progress of design activities. During these visits, the ENGINEERING CONTRACTOR shall provide copies of any drawing(s) or document(s) requested by Company. These drawings/documents may have been previously completed and issued by the ENGINEERING CONTRACTOR or may be only partially complete.

1.3  Design Review Meeting

1.3.1   Periodic design review and coordination meetings may be held by video conference or may be held in the offices of the EC. The ENGINEERING CONTRACTOR shall keep detailed minutes of all design review and coordination meetings. The minutes shall include specific information on all agreements reached and all action items and the party responsible for them. These minutes shall be transmitted to Company. These meetings will address:

    • Information requirements and flow.
    • Technical review.
    • Schedule progress review/resources and action plans.
    • Problem areas.
    • Changes to scope.

1.3.2   Design review meetings shall be scheduled and held at the following design milestones:

    • At 30% design completion. This will be a review of the CAD model. There may be separate reviews for each unit operation if appropriate. The model is expected to contain at least the following at this review stage:

– All equipment modeled

– 50-75% large bore piping (>50 mm dia) modeled

– Primary structures defined with major members sized

– Main cable routes modeled

– Access ways shown

– Maintenance requirements (bundle pulling areas, etc.) shown

– Buildings shown

– It is understood that some subsequent changes to the model detail may need to be made as the design develops beyond the 30% design completion stage. The purpose of the review is for all parties to agree to the overall concept for the design and to agree to use it as the basis for further design development. However, any major changes would be the subject of further review.

    • At 60% design completion. This will continue the review of the CAD model. There may be separate reviews for each unit operation if appropriate. The model is expected to contain at the following at this review stage:

– All equipment modeled

– 50-75% of all piping modeled

– 50-75% of all structures modeled with members sized

– 50-75% of all cable routes modeled

– Access ways shown

– Maintenance requirements (bundle pulling areas, etc.) shown

– Buildings shown

    • At 100% completed piping general arrangement/ISO drawings (90 percent complete CAD model for piping). This will comprise a detailed review to verify compliance with the P&ID, confirm estimated line pressure losses (by Company) and a check of the plant design for safety, operability, and reliability. This will also involve a further review of the CAD model. There may be separate reviews for each unit operation if appropriate. The model is expected to contain at least the following at this review stage:

– All equipment modeled

– All piping modeled

– All structures modeled with members sized

– All cable routes modeled

– Access ways shown

– Maintenance requirements (bundle pulling areas, etc.) shown

– Buildings shown

1.3.3   Construction sub-contract enquiry packages ready for issue (if applicable). This will include a detailed review of the scope of work and associated drawings and specifications for each construction sub-contract enquiry package.

1.3.4   These design review meetings shall be attended, at a minimum, by the project managers and applicable engineering specialists/design engineers from Company and the EC.

2. Total Safety

2.1      Company has an overriding commitment to safety. Safety is designed into the project, and conformance to the Company established safety programs is a condition of employment. An awareness of and total commitment to good safety practices and procedures must be an integral part of the engineering, design, procurement, and construction management services provided by the EC.

2.2      Specific obligations to construction site safety are detailed in Section 11 of this scope of work. The ENGINEERING CONTRACTOR shall demonstrate, however, an awareness of and a total commitment to safety aspects during all stages of project execution from the start of design work to completion of site work.

2.3      Safety issues will be an important part of the reviews that Company will perform on work performed by the EC.

2.4      The ENGINEERING CONTRACTOR must be able to demonstrate a commitment to safety not only with compliance to and/or incorporation of the above in the design, but also by showing that all employees assigned to the project have a strong safety awareness.

3. Quality System

3.1      Company has made a corporate commitment to the quality process by establishing a tiered quality management system (QMS) that is ISO certified.

3.2      The ENGINEERING CONTRACTOR shall operate a quality system conforming to the essential elements of ISO 9001. Company may allow a lack of formal ISO certification of the ENGINEERING CONTRACTOR on a case-specific basis. Company’ formal approval of the exception is required before the start of the project. The ENGINEERING CONTRACTOR shall prepare a quality management plan for the project. The plan shall include a description of how the ENGINEERING CONTRACTOR will ensure the quality of the work to be performed. The plan shall address the following issues:

    • Procedures for the control and distribution of deliverables that are issued by Company to the ENGINEERING CONTRACTOR for the ENGINEERING CONTRACTOR to use as the basis of the design work, particularly regarding updated revisions of such deliverables.
    • Procedures for qualifying computer software that is to be used for design and procedures for verifying the output of the software.
    • Procedures for interdisciplinary review of design work that requires the input of design disciplines other than the originating discipline.
    • Procedures for checking and approving design deliverables before issuing.
    • Procedures for incorporating Company and/or owner comments into design deliverables.
    • Processes and schedule for ensuring work is performed in accordance with the management system.
    • Inspection and test plan for equipment procured by the EC.

3.3      The ENGINEERING CONTRACTOR shall supply a copy of their quality management plan to Company for review.

4.  Cost Control and Forecasting

4.1      The ENGINEERING CONTRACTOR shall prepare an estimate for the cost of equipment and material to be purchased and for the construction work when relevant. The method(s) to be used to generate the cost estimate will be given in the contract scope.

4.2      This cost estimate shall be completed within four weeks from award of the contract for individual cost sections as detailed in the contract scope.

Note: Certain cost sections shall be estimated for each individual area of the plant (e.g., compression, interconnections, plantwide, or other as required).

4.3      After review of the cost estimate with Company, Company and the ENGINEERING CONTRACTOR shall jointly agree to a budget for equipment and material purchases and construction works. Thereafter, the ENGINEERING CONTRACTOR shall maintain an effective system for recording all commitments and expenditures against the individual budget cost sections when relevant.

4.4      The ENGINEERING CONTRACTOR shall issue a monthly cost report to Company giving the following information by individual budget cost sections as referenced above:

    • Current budget
    • Commitments to date
    • Expenditures to date
    • Current forecast at completion
    • Labor hours
    • Labor rates
    • Reimbursable expenses to date

4.5      The ENGINEERING CONTRACTOR shall provide a narrative explanation for any variance(s) between the current budget and forecast for each budget cost section and their proposed corrective action(s) to maintain overall project costs within the agreed to budget.

5. Schedule and Progress Reporting

5.1      The contract scope shall include a key date schedule that identifies the required timing of the major activities relating to the contract. The key date schedule shall include engineering, design, procurement, construction, and start-up as appropriate.

5.2      The ENGINEERING CONTRACTOR shall develop detailed time schedules to plan, control, and report progress during all phases of the project execution from start of design work to contract completion including, as appropriate, construction and pre-commissioning activities. These schedules shall use software and be based on a format agreed to with Company and shall clearly identify the timing of any information that will be required from Company as the contract activities proceed. They shall also identify any milestone activities that require input from Company such as design review meetings.

5.3      The ENGINEERING CONTRACTOR shall ensure that their design and procurement (material delivery) schedules are fully integrated with the project construction program if relevant. In addition, the ENGINEERING CONTRACTOR shall ensure that the construction program is consistent with scheduled site delivery dates for individual items of equipment and material purchased and supplied by Company.

5.4      Each item on the schedules shall be weighted by the estimated total man-hours required to produce the item. The schedule shall be used to control and report progress during all phases of the contract work using the estimated total man-hours and by monitoring the percentage of completion of each item.

5.5      The ENGINEERING CONTRACTOR shall issue a weekly report to Company that summarizes the following information.

    • Progress to date versus the agreed to schedules
    • Percent complete progress (man-hour chart)
    • Key tasks that are in progress
    • Work plan for coming one-week and six-week periods
    • Any constraints or specific areas of concern and proposed remedial action(s) to resolve problem areas

Any overdue or future events that require specific action(s) by Company within the next two-week period shall be listed separately. This shall include the following if appropriate:

    • Provision of any specific documents, such as drawings, specifications, and vendor prints, and/or information required by the ENGINEERING CONTRACTOR to enable them to proceed with their work.
    • Attendance at meetings such as design review meetings, bid clarification meetings, etc.
    • Approval to commit a specific purchase order if relevant to the ENGINEERING CONTRACTOR scope.
    • Upcoming equipment and/or material inspection “hold points” that Company may elect to attend.

5.6      The ENGINEERING CONTRACTOR shall prepare a formal monthly progress report and issue it to Company. The format of this monthly progress report will be agreed to at the contract kick-off meeting but will include, at a minimum, the following sections:

    • Percent complete progress
    • Actual progress against schedule
    • Key achievements during the past month
    • Planned activities for the coming month and six-week period
    • Information requirements
    • Cost status
    • Change order status
    • Areas of concern (including proposed remedial action)
    • Log of all correspondence not resolved and open for action by Company or the EC

5.7      A monthly project progress review meeting will be held either by video conference or in the offices of the ENGINEERING CONTRACTOR or moved to the construction site offices later if relevant. The content of monthly progress reports will be presented by the ENGINEERING CONTRACTOR and discussed with Company at these meetings.

5.8      Company and the ENGINEERING CONTRACTOR will agree on a schedule for monthly project progress review meetings at the contract kick-off meeting. These meetings will be held throughout all phases of the project, from start of detailed design work to completion of construction and pre- commissioning activities.

5.9      The project status will determine who the participants will be. They may include representatives from EC’s project management, design, procurement, and construction departments. These representatives shall be personnel assigned to work on this project, not their functional or departmental managers.

5.10    The monthly progress review meetings will be conducted entirely in English. A local alternative language may be used for the meetings if all parties at the meeting are in agreement and if everyone understands the language chosen for use. The ENGINEERING CONTRACTOR shall prepare meeting notes and issue them to Company for agreement within two working days.

6. Scope Change Procedure

7. Administration and Communication

7.1      The ENGINEERING CONTRACTOR shall appoint a project manager who shall be dedicated to this project. Company reserves the right to approve the individual selected. The ENGINEERING CONTRACTOR may not release the appointed and approved project manager from the project without prior consent from Company. The EC’s project manager shall be responsible for coordinating and controlling all aspects of work and shall be the single point of contact (SPOC).

7.2      All contract correspondence shall be in English.

7.3      All technical and commercial questions must be formally communicated by the ENGINEERING CONTRACTOR to Company.

7.4      All document transmission between Company and the ENGINEERING CONTRACTOR shall be electronic. Electronic documents shall be submitted through a secure workspace operated by Company using “eRoom,” an internet web-based tool. Other web-based tools for external team collaboration may be acceptable but must be approved by Company before being used. Electronic document file formats submitted by the ENGINEERING CONTRACTOR to Company for review and approval shall conform to the requirements given in this specification Section 4, paragraph 4.3.2.2.1. A transmittal sheet summarizing what is supplied and the current revision level shall accompany all drawings and documents issued.

7.5      Generally, correspondence will be by e-mail. The general communications strategy for the contract will be to promote the free flow of information among the various specialists working on the project in Company and the ENGINEERING CONTRACTOR project team. However, all decisions, commitments, and approvals must be formally confirmed between the single points of contact (SPOCs) in Company and the ENGINEERING CONTRACTOR organization. Company will distribute project information freely to specialists involved in the project and will expect to receive information freely from these specialists. However, all contractual correspondence shall be sent between the SPOCs. Hard (paper) copies, with signatures if required, of all e-mailed contractual correspondence shall be mailed to the appropriate SPOC. Contractual correspondence is defined as:

    • Any notice or instruction issued according to any term of the contract
    • Any correspondence that relates to contract cost or schedule
    • Transmittals of documents for formal review or approval by Company
    • Comments by Company on any of the work performed by the EC
    • Minutes of project meetings
    • Confirmation of decisions that have been discussed between specialists

7.6      The Company single point of contact will be specified in the contract scope.

7.7      All contractual correspondence from the ENGINEERING CONTRACTOR to Company shall be dated and consecutively numbered and shall include the project name, number, and subject in the heading of the e-mail.

7.8      All communication will be documented. Telephone conversation between the EC’s personnel and Company, equipment suppliers, or other outside groups will be documented within two working days as “record of telephone conversation” reports or confirming letters that document all items of importance that were discussed and any agreements that were reached.

7.9      Minutes of all meetings and/or conferences between the ENGINEERING CONTRACTOR team members, Company team members, equipment supplier representatives, and/or other outside groups shall be prepared by the ENGINEERING CONTRACTOR within five working days to document the persons in attendance, subjects of discussion, decisions reached, action items, and issues. The individual responsible for each action item or issue and a target or commitment date for completion of the action or resolution of the issue must be provided.

7.10    Any items that appear as “open” in any communication must be closed via formal communication and the closing communication distributed to the same group that received the original communication.

 

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