ACCELERATING AND COMPRESSING INDUSTRIAL PROJECT SCHEDULES, PART 3
The Holloway Consulting Group is an internationally recognized construction project scheduling expert, and we have posted a series of posts on the management techniques used to accelerate, compress or shorten, industrial project schedules. Chapters 1 and 2 of this series are posted here. The project schedule acceleration techniques addressed in these posts are relevant to EPC construction projects initiated and executed under a “schedule acceleration or compression” philosophy. The techniques used to “accelerate” the completion of delayed and impacted projects, that were not undertaken with schedule compression in-mind, are different and will be addressed in a future post.
Owners often chose to adopt a multi-prime contracting approach in an effort to accelerate project completion and reduce cost. If experienced and qualified project management personnel are available, the owner can essentially assume the role of general contractor and enter into competitive bid, lump-sum prime contracts with key contractors. This approach can increase bidding competitiveness and allow fast-tracking while retaining lump-sum competitive bids, but it also demands effective coordination, scheduling and job management. If these prime contracts require a substantial amount of subcontracting, management should confirm that the prime contractors’ experience goes beyond just the management of its own direct labor force.
TIME AND MATERIAL WORK
Trade personnel can become complacent with Time and Materials (T&M) and cost reimbursable work. Therefore, project management should plan to limit T&M to less than, say, three percent of total construction cost. However, in order to pursue a fast-track job and accelerate completion under this approach, management should establish a well-defined contract scope and involve multiple-prime contractors. Acquiring meaningful contractor constructability input under this approach may require creative negotiations and contract terms.
PACKAGED VENDOR UNITS
Pre-packaged vendor units, such as gas turbine generator sets, often have the effect of maximizing shop fabrication, reducing field labor, accelerate job completion, and reducing risk associated with system start-up. While these packaged units tend to be at the low end of the MW output scale, the trend is toward increasing their power production. Generally, with packaged units, deviations from the standard design should be avoided. The owner can start with the vendor-developed standard turbine package and then critically scrutinize all suggested modifications or enhancements, recognizing that significant time and money can be saved if re-engineering efforts can be avoided.
Whenever possible, use the manufacturer’s standard designs and minimize customization and excessively restrictive specifications. Specs should not be “gold-plated” or require an excessive product life cycle. This approach should minimize unnecessary follow-on conformance negotiation efforts and reduce the inventory of spare parts. A pre-selected list of acceptable vendors and components for all major components should also help in accelerating the procurement process.
VENDOR SCHEDULE PERFORMANCE
Based on thorough investigations and evaluations, project management should keep records on contractors’ and vendors’ past project schedule performance and make use of this information in pre-qualification and selection process. Ask vendors for reliable indicators of shop capacities and current and planned workloads, as these can significantly affect future production and deliveries.
Instead of fabricating similar steel shapes and pipe sizes in groups from large sections to small, contract for and require the fabricators to fabricate strictly by erection sequence and job schedule. Associated piping and fittings or columns, beams, diagonals, angles, and plates should be fabricated before moving on to another pipeline or structure. Of course, milestone delivery dates should also follow the erection sequence dates. Any incentive/penalty dates should be based on delivery dates of inspected and accepted piping and steel.
INCENTIVES, PENALTIES AND SCHEDULE PERFORMANCE
Recognize plant investment economics in construction contracts and major vendor purchase orders by offering daily bonuses for early project completion. Use a similar value (or a significant portion thereof) as the daily penalty for late completion. For this approach to work, however, project durations should be aggressive yet reasonable, and the owner’s project management team should take a very active role in early project planning and problem-prevention. These issues should be thoroughly addressed in RFPs, contract documents, and training programs.
DELIVERY DATES OF OFE
The owner’s project management can assume a fair allocation of risk and allow the contractors to accelerate job completion by guaranteeing to the contractors the delivery dates for owner-furnished equipment. This, in-turn, should also help reduce the amount of the contractor’s contingency.
For critical pieces of equipment, and in order to minimize the time required for vendor drawing information, assign a dedicated expeditor who is fully knowledgeable of technical requirements, is authorized to establish priorities, and has full and direct access to vendors (particularly vendor management personnel). Consider issuing a weekly expediting or material status report.
Ensure early identification of any potential delays and facilitate design reviews and field erection planning with monthly progress/status meetings with major equipment suppliers. Involve both engineering management personnel and construction supervisors as appropriate.
SYSTEM TURNOVER DATES
Every contract and subcontract should include the current projected system turnover dates. However, this again emphasizes the importance of accurate and up-to-date project schedules.