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Planning Measurement and Control Systems for Lump Sum Petrochemical Projects

IP.com Disclosure Number: IPCOM000219949D
Publication Date: 2012-Jul-18
Document File: 42 page(s) / 2M

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PLANNING~ MEASUREMENT AND CONTROL SYSTEMS

FOR LUMP SUM PETROCHEMICAL PROJECTS

R.J. LEVENE


M.W. KELLOGG LIMITED
GREAT BRITAIN

SUMMARY

The application of detailed control procedures to lump sum contracts by client/ consultants is non-standard for petrochemical projects. Using the contractor's normal control data~ a parallel system was developed and operated. Payment of the contract price was made by measurement against programmed achievement milestones, run as a separate system.

INTRODUCTION

The function of project control is to provide the Project Manager with information at the required time and frequency that enables him to control the progress and cost of the job.

Project control has been defined within Kellogg as the process which :-

- forecasts and evaluates potential schedule or cost problems prior to their occurence,

- reviews trends or actual problems and proposes action to overcome or reduce difficulties,

- regularly reports the status of project cost and schedule progress.

The control of lump sum petrochemical projects, in the main, rests with the contractor and very little of the output of the day to day control systems is given to the client or consultant acting on his behalf. Similarly, payment is either made on a fixed time basis or on a measure of progress given by the contractor which is not easy to verify.

Some dissatisfaction with this state of affairs and the development of the use of management techniques by clients has led to the need for greater~control and more sophisticated control techniques for both lump sum and reimbursable contracts. During the preparation of the invitation to bid for this particular project, the need for such control, although recognised as non-customary~ was a prime requirement of the client. During this preparation staged conditions were included by Kellogg, as consultant, to ensure that the necessary data for adequate control would be available to the consultant and the client during the project.

PROJECT CONTROL RESPONSIBILITIES IN A CLIENT/CONSULTANT/CONTRACTOR SITUATION

It is important when the client, consultant and contractor are fully involved in the day to day control systems of the project to identify the control needs of each responsibility level in the project. Each system is run in parallel~ using the same basic elements of data in order that comparisons can be made


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between the different levels. It is~ therefore, most important at the start of the project to identify the basic data required for each system and adjust them where necessary to make them compatfble with all requirements.

CONTRACTOR RESPONSIBILITIES

These requirements in outline form are :-

Schedule Requirements : The procedures of schedule control are standard throughout the petrochemical industry. The use of critical path techniques was, therefore, specified as a requirement at invitation to bid stage~ in order that during the contract, the contractor could provide full schedule information. Suc...