W16_OAN_Standardized WBS for Fuel Terminal Project

  1. Problem Definition

Fuel Terminal (FT) project is a construction project of Fuel Distribution facility to Received, Storage, and distribute Fuel to Gas.

A FT area consists of several areas: Office Area, Tank Farm area, Pump equipment area, Jetty Area, Fire & Safety and utility equipment area. In this project each area is supported by some equipment or facilities.

Figure 1: Typical Layout Fuel Terminal

  1. Development of Feasible Alternatives

Using OmniClass, we have 15 Possible Alternatives:

  • Table 11- Construction Entities by Function
  • Table 12 – Construction Entities by Form
  • Table 13-Spaces by Function
  • Table 14 – Spaces by Form
  • Table 21 – Elements
  • Table 22 – Work Results
  • Table 23-Products
  • Table 31 – Phases
  • Table 32 – Services
  • Table 33 – Disciplines
  • Table 34 – Organizational Roles
  • Table 35 – Tools
  • Table 36 – Information
  • Table 41 – Materials
  • Table 49 – Properties

 

  1. Possible Solution

Table 13-Spaces by Function

Spaces by Function are basic units of the built environment delineated by physical or abstract boundaries and characterized by their function or primary use. Spaces have a purpose or use.  This is their function and the concern of this table.  Spaces can be occupied by people, things, and substances and serve as mediums for activities and movement.

  1. Selection Criteria

The criteria for choose OmniClass are:

  • The WBS should represent zone for FT Project
  • Deliverables should be decomposed to the level of detail needed to estimate the effort required to obtain them
  • Ensure That each WBS element has a single point of accountability
  • Support historical cost collection for future cost estimating purposes

 

  1. Analysis and Comparison of the Alternatives
  • Table 13-Spaces by Function – Zone Breakdown Structure (ZBS).

Detail ZBS for FT projects can be extracted by OmniClass Table 13 (Space by Function) which noted spaces for decompose ZBS components, which detail shown:

Table 1: FT OmniClass ZBS

Figure 2: FT Space by Function

  1. Selection and Preferred Alternatives

Based on Figure 2, WBS represent Zone for FT Project. All Deliverable consist detail needed to estimate the project. By doing this, we can ensure our WBS has high accountability, and we can use our historical data for future cost estimating purposes.

  1. Performance Monitoring and the Post Evaluation of Result

Standardized FT WBS can build from OmniClass Tables 13 – Spaces by Function. It is necessary to keep update the WBS periodically during project phase. Project management team also needs to evaluate the impact during phases of the project so the project can smoothly deliver with on time, on budget and on scope.

Refrences

  1. Planning Planet (2017). Creating Work Breakdown Structure.
    Retrieved from http://www.planningplanet.com/guild/gpccar/creating-work-breakdown-structure
  2. W7_TH_Standardized WBS Structure for Gas Station Project – Part 4
    Retrieved from https://emeraldaace2017.com/2017/09/
  3. OmniClass (2017), OmniClass Table 13 – Spaces by Function.
    Retrieved from http://www.omniclass.org/

 

 

 

 

W15_OAN_Contract Type for EPC Project

  1. Problem Definition

Normally the company use lump sum or Firm Fixed Price (FFP) contract type. Using EPC Contract History from last 5 projects, scope accuracy less than 80%.

Table 1: Project Profile

  1. Development of Feasible Alternatives

there are 4 (four) common types of contracts which is used in the engineering and construction industry:

  1. Lump Sum Contract
  2. Unit Price Contract
  3. Cost Plus Contract
  4. Incentive Contract

 

  1. Possible Solution

Lump Sum Contract

Advantage

  • Minimum Risk for the owner
  • Time involved for preparing the plans and specifications is considerably longer
  • Contract is based on agreed rates
  • Minimum Owner supervision related to quality and schedule

Disadvantage

  • Time involved for preparing the plans and specifications is considerably longer.
  • Because price determines who is awarded the contract, the quality of work will be poor.
  • Difficult to make changes

Unit Price Contract

Advantage

  • Owner pays for only measured work
  • Scope and quantities easily adjustable

Disadvantage

  • Negotiation of ‘unit’ rates can be very time consuming
  • Final cost not known at outset since bills of quantities at bit time are only estimates
  • Additional site staff needed to measure, control, and report on units completed

Cost Plus Contract

Advantage

  • Set a contract early with little negotiation.
  • Selection of supplier is based on rates.
  • Work definition is unimportant to contract.
  • Field work may be started before the plans and specifications are complete

Disadvantage

  • Owner assumes all of the risk.
  • The contractor is encouraged to use inefficient (time wasting) labor and expensive materials.
  • Owner has to manage all coordination issues.
  • Owner carries cost of poor quality.
  • the contractor cannot afford delays that will keep the job going longer than expected.

Incentive Contract

Advantage

  • Used to Encourage More Effective Work From Contractors.
  • When Appropriately Applied, Contractors are Paid Based on Their Handling of Cost, Schedule, and Their Performance
  • Good Business Practice
  • Owner & Contractor share financial risk and have mutual incentive for possible saving

Disadvantage

  • Opportunities are Given to Contractors to Receive Unearned Fees
  • Require complete auditing by owner’ staff

 

  1. Selection Criteria

In order to determine what kind of contract should be used there are some criteria must be considered:

  • Flexibility for additional or reduction of scope
  • Quality of the services
  • Detail spec, volume and scope of work requirement
  • Owner financial risk
  • Owner supervision
  • Price negotiation

 

  1. Analysis and Comparison of the Alternatives

Author analyze and compare the alternatives by using compensatory models. The attributes of the contract type as shown in table 2.

Table 2: Attribute of Contract Type

Ranking attribute by using non-dimensional scaling as shown in

Table 3: Non Dimensional Scaling

After set relative rank for each attribute, further is to conduct additive weighting for all alternatives as shown in table 4

Table 4: Weighting for Alternatives

  1. Selection and Preferred Alternatives

Base from above calculation Incentive Contracts become the best alternatives to replace FFP contract type for our project.

  1. Performance Monitoring and the Post Evaluation of Result

Management should consider to use incentive contract type as the best alternatives to replace FFP contract type to avoid over budget project and monitoring should be conducted during the project contract to ensure that all requirements are met

Refrences

  1. Sullivan, W.G., Wicks, E. M., Koelling, C. P. (2014). Engineering Economy, Chapter 14, page 559 to 617. Pearson. Sixteenth Edition.Benefits & Disadvantages of Functional Organizational Structure.
  2. The Engineering Tool Box.
    Retrieved from: http://www.engineeringtoolbox.com/contract-types-d_925.html#
  3. Giammalvo, Paul D. AACE Certification Preparation Course Day 5. Page 75 to 95.
  4. Module 05-1: Introduction to Managing Contract.
    Retrieved from : http://www.planningplanet.com/guild/gpccar/introduction-to-managing-contracts
  5. W40_MFO_Contract Type for EPC Project
    Retrieved from https://emeraldaace2017.com/2017/10/13/w10_mfo_contract-type-for-epc-project/