promo_epc project rule of credit and progress measurement

EPC Project Rule Of Credit and

Progress measurement

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Outline

2. Rule of Credit - Engineering

3. Rule of Credit - Procurement

4. Rule of Credit – Fabrication and Construction

5. Managing Rule of Credit in Primavera P6

1. Progress Calculation

Progress Calculation

01 +Rule of Credit / Weighted Steps method

Food for Thought

Progress Measurement

Project progress monitoring and control is one of the most important tasks of construction project management. Every team member needs to know, in a timely and accurate manner, how is the project progressing, where they are currently in comparison to the initially set plans, whether deadlines are met, budgets are safely measured and followed. Executing a successful project depends on many factors, but ultimately the most important question that need to be answered before any measures can be taken is “What’s been accomplished so far?” Progress measurement addresses this question and serves as a fundamental building block for effective project controls. Progress measurement system plays an important part of project control. It includes the detail progress tracking sheet of its WBS elements, work categories and work steps for each deliverable. It is developed either when the additional requirements are occurred for a particular project or when progress measurement system is not in placed.

The work scope to be measure includes fabricate and installation of pipeline including tie-in work, insulation work, painting work, fabricate and installation of new pipe racks, fabricate and installation of equipment access platforms, installation of process equipment. Progress measurement system would be different depending on organizational and/or project preference. Prior implementing a system for progress evaluation an estimate must be developed for both man-hours and quantities of drawings for each engineering discipline. When working with progress calculation, you should know the level of reporting. In a typical project, engineering progress is measured as level 2 (phase wise) and level 3 (engineering discipline wise) and level 4 (document wise).

Progress Measurement

Progress measurement system plays an important part of project control. It includes the detail progress tracking sheet of its WBS elements, work categories and work steps for each deliverable. It is developed either when the additional requirements are occurred for a particular project or when progress measurement system is not in placed. The work scope to be measure includes fabricate and installation of pipeline including tie-in work, insulation work, painting work, fabricate and installation of new pipe racks, fabricate and installation of equipment access platforms, installation of process equipment. Progress measurement system would be different depending on organizational and/or project preference. Prior implementing a system for progress evaluation an estimate must be developed for both manhours and quantities of drawings for each engineering discipline. When working with progress calculation, you should know the level of reporting. In a typical project, engineering progress is measured as level 2 (phase wise) and level 3 (engineering discipline wise) and level 4 (document wise).

Physical progress for the engineering phase of a project consists of three levels of indenture as follows: •Progress by Drawing, Datasheet, Document and Request for •Quotation (RFQ)

•Progress by Discipline

•Total Engineering Progress

Weighted Step

One of the most important choices that a control project controller or project manager makes in establishing an progress control or EVM plan is to select an appropriate measure of earned value for each work package. This choice of the measure of interim progress, or completion, for each work package will do more than any other discretionary choice in making the EVM results meaningful. The execution process for a successful project depends on mange factors, but one fundamental question that need to be answered is before proactive or prescriptive measures can be implemented is: What’s been accomplished so far? Progress measurement addresses this question and serves as a fundamental building block for effective project controls. Steps make it possible to describe and report progress for activity work at a granular level by breaking an activity into its component parts. Steps can have a step weight that quantifies the portion of an activity's total work that each step represents. On a project per project basis, you can use step weights to calculate Activity Percent Complete. Weighted steps enable you to track the progress of an activity based on the number of steps completed.

According to the 5th edition of the PMBOK Guide, “ Weighted milestone method. An earned value method that divides a work package into measurable segments, each ending with an observable milestone, and then assigns a weighted value to the achievement of each milestone. ”

Weighted Step

How do you figure out percent complete on a project? How is it you go about objectively assigning a reasonable and accurate measurement of how far along you are on an item of work? How many times have you asked, “Hey, where did that number come from?” Rule Of Credit can answer those questions. For any workpackage in the work breakdown structure, a project manager can define any number of milestone events that define the incremental progress of that task. An example milestone could be, “Engineering Completed”. Another milestone could be “Pre-construction Completed". Connected with that, a percent complete value is associated with each milestone. All milestones in the task will tally up to 100%. As work is completed on the task, these milestones can be checked-off as completed and the associated percent will be auto-applied to the task.

EPC Weighted Level

Level 1 - ProjectProject 1 Project 2 Project 3

Level 2 - PhasesDesign Procure Construction

Level 3 - WorkPackagesSite Prep Foundation Slab Steel

Level 4 - ContractorForm Loc 1 Mesh Loc 1 Pour Loc 1

1 Activity per project

3-5 Activity’s per project

As much detail as needed to communicate W4

Also called the “CM” schedule. 25 – 35 activities per project.

Level 1 - ProjectProject 1 Project 2 Project 3

Level 2 - PhasesDesign Procure Construction

Level 3 - WorkPackagesSite Prep Foundation Slab Steel

Level 4 - ContractorForm Loc 1 Mesh Loc 1 Pour Loc 1

1 Activity per project

3-5 Activity’s per project

As much detail as needed to communicate W4

Also called the “CM” schedule. 25 – 35 activities per project.

Level 1

Level 2

Level 3

Level 4

Engineering

Progress Planning

Engineering

Procurement

Construction

Engineering Progress Plan will be prepared by engineering milestones and by engineering deliverables for each category. Weight point of engineering deliverables for each category will be based on the estimated manhours

Procurement Progress Plan will cover equipment and bulk materials to be purchased. This plan will be prepared respectively for the milestones of purchase commitment, receipt of major raw materials to vendor shops, FOB and/or ex-works and arrival at the Site. Weight percentages for categories will be based on the costs defined in the CONTRACT.

Construction Progress Plan will be prepared construction milestones covering mobilization, demobilization, management, temporary facilities and by construction including pre-commissioning progress for permanent facilities. For construction including pre-commissioning progress, the representative Bills of Quantities (B/Q) will be allocated to work packages.

Progress Calculation

-Engineering Weightage

Why Rule of Credit

Very Accurate through all phases

Easily identifies changes and slippage in schedule

Can provide detailed historical information for future estimates

Can be used for “What If” scenarios

Clear defined information as to what will be provided and expected in each review package

Can provide cost, hour and schedule alignment.

1

2

3

4

5

6

Engineering Weighted Level

Engineering

Process Civil and Structure

Mechanical Electrical Instrumentation Piping

Issue For Review (IFR)

Issue For Approval (IFA)

Issue For Construction (IFC)

Approved for Construction

(AFC)

Level 1

Level 2

Drawing Document Datasheet RFQ Level 3

Level 4

Engineering Progress Measurement

Engineering Progress Calculation

Level 4

Level 3

Level 2

Engineering progress for each document The sum of the product of weight factor for each work step

and engineering progress for each work step

Engineering progress for each discipline The sum of the product of weight factor for each

document and engineering progress for each document

Calculate total engineering progress The sum of the product of weight factor for each discipline

and engineering progress for each discipline

Weighted Progress

Step 1

Step 2

Step 3

Calculate the progress for each document or item

EPd = Σ (WFws x EPws) Where, EPd = Engineering progress of each document or item WFws = Weight factor of each work steps EPws = Percent completion of each work step

Calculate engineering progress for each discipline or work category

EPwc = Σ(WFdd x EPdd) Where, EPwc = Engineering progress of each discipline or category WFdd = Weight factor of each document or item

Calculate engineering progress for each discipline or work category

Calculate total engineering progress

EP = Σ(WFwc x EPwc) Where, EP = Total engineering progress WFwc = weight factor of each discipline or category,

Level 1 - WBS

WBS DESCRIPTION WEIGHTAGE

BASIS COST (RM)

WEIGHT FACTOR

ENG ENGINEERING Manhour 1,862,010 0.064

PRC PROCUREMENT Cost 6,499,944 0.223

CM CONSTRUCTION Cost 19,770,791 0.679

CON COMMISIONING Cost 967,255 0.032

Total Cost 2,9100,000

Weight Factor = Cost Total cost

Level 2 - WBS

BASIS COST (RM) WEIGHT FACTOR

ENGINEERING (TOTAL COST) $1,862,010.00

CIVIL & STRUCTURE Manhour $380,890.00 20.46%

PROCESS Manhour

$207,710.00 11.16%

MECHANICAL Manhour

$260,160.00 13.97%

GENERAL Manhour

$140,580.00 7.55%

PIPING Manhour

$376,430.00 20.22%

ELECTRICAL Manhour

$296,200.00 15.91%

INSTRUMENTATION Manhour

$200,040.00 10.74%

Weight Factor = Discipline Cost Engineering Total cost

Engineering Work Category Breakdown

Level 4 - WBS

ENGINEERING (Weightage) ( Option 1)

Proposed Weightage ( Option 2)

Proposed Weightage

Study & Design Preparation 40 %

Issued for Approval 40%

Client Comment -

Incorporate Client Comment -

Issued for Construction 20%

Issue for review (IFR) 10%

Issue for approval (IFA) 20%

Issue for construction (IFC) 30%

Approved for construction 40%

Level 4 - WBS

Study and

Design

Preparation

IFR IFA IFC AFC Progress (%

Complete)

Weight

Progress

Document Title Category DisciplineBudgeted

Man Hour

Weight

Factor5% 15% 20% 25% 35%

Tie In Plan Dwg Piping 300 0.05484 100.0% 100.0% 100.0% 100.0% 33.0% 76.6% 4.2%

Piping GA Dwg Piping 400 0.07313 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 7.3%

Tie In Isometric Dwg Piping 350 0.06399 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 6.4%

Standard Pipe Support Dwg Piping 450 0.08227 100.0% 100.0% 100.0% 100.0% 33.0% 76.6% 6.3%

Demolition Dwg Piping 350 0.06399 100.0% 100.0% 100.0% 75.0% 0.0% 58.8% 3.8%

Tie In List Doc Piping 550 0.10055 100.0% 55.5% 0.0% 0.0% 0.0% 13.3% 1.3%

Critical Line List Doc Piping 600 0.10969 100.0% 55.5% 0.0% 0.0% 0.0% 13.3% 1.5%

Stress Analysis Report Doc Piping 800 0.14625229 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Coating Specs Doc Piping 850 0.15539305 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Piping class Doc Piping 820 0.14990859 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

GRAND TOTAL 5470 1.0000 30.8%

% Complete= (5% x 100%) + (15% x 100%) + (20% x 100%) +(25% x 100%)+( 35% x 33.0%)

Weight factor = 0.0584 * 76.6 % Progress tracking Excel sheet available for download in ignite.com

Rule of Credit

02 +Engineering

Engineering Rule Of Credit

For Engineering, the weighting is according to the estimated man hours (units) assigned to each discipline. The Master Deliverable List (MDL) is the document for contractual required Engineering deliverables, containing all submittal (delivery) drawings and documents required to complete a specific project. The Engineering Master Deliverable List will be the basis of progress measurement of engineering work.

Rule of Credit Overview

Step Rule of Credit Increment % Cumulativ

e %

1 Study and design preparation 5% 5%

2 Issue for review (IFR) 10% 15%

3 Issue for approval (IFA) 20% 35%

4 Issue for construction (IFC) 30% 65%

5 Approved for construction 35% 100%

Engineering

Step Rule of Credit Increment % Cumulative %

1 Study and design preparation 5% 5%

2 Issue for review (IFR) 10% 15%

3 Issue for approval (IFA) 20% 35%

4 Issue for construction (IFC) 30% 65%

5 Approved for construction 35% 100%

Engineering

Step Rule of Credit Increment % Cumulative %

1 Study and design preparation 10% 10%

2 Issue to client 30% 40%

3 Approval by client 35% 75%

4 Issue for construction / purchasing 25% 100%

Engineering

Step Rule of Credit Increment % Cumulative %

1 Study/ design preparation 10% 10%

2 Issue for internal review 5% 15%

3 Issue to client 15% 30%

4 Approval by client 35% 65%

5 Issue to construction 35% 100%

Engineering

Step Rule of Credit Increment % Cumulative %

1 Study 10% 10%

2 Issue for internal review 5% 15%

3 Issue to client 15% 30%

4 Approval by client 35% 65%

5 Issue to construction 35% 100%

Engineering

Step Rule of Credit Increment % Cumulative %

1 Document Started, Format Accepted, TOC Complete 10% 10%

2 Write-up Complete 10% 20%

3 Issue IDC 5% 25%

4 IDC approved 15% 40%

5 Code 3 – Rejected, Revise & Re-Submit - 40%

6 Code 2 – Approved with Comments, Revise & Re-Submit & Proceed with Construction

20% 60%

7 Code 1 – Approved without Comments 25% 85%

8 AFC 15% 100%

Engineering

Step Rule of Credit Increment % Cumulative %

1 Study & design preparation 10% 10%

2 Issue for approval 25% 35%

3 Client comment - 33%

4 Incorporate client comment 35% 70%

5 Issue for construction 30% 100%

Process – P&IDs, PFD

Step Rule of Credit Increment % Cumulative %

1 Document Started, Format Accepted, TOC Complete 25% 25%

2 Write-up Complete, Dept Sign-off, Issue for Review / Issue for Client Approval

25% 50%

3 Code 3 – Rejected, Revise & Re-Submit 10% 60%

4 Code 2 – Approved with Comments, Revise & Re-Submit & Proceed with Construction

20% 80%

5 Code 1 – Approved without Comments 10% 90%

6 Final Issue / Upload in SAP / Issue for Construction (IFC) 10% 100%

Instruments & Valves

Step Rule of Credit Increment % Cumulative %

1 Document Started, Format Accepted, TOC Complete 25% 25%

2 Write-up Complete, Dept Sign-off, Issue for Review / Issue for Client Approval

25% 50%

3 Code 3 – Rejected, Revise & Re-Submit 10% 60%

4 Code 2 – Approved with Comments, Revise & Re-Submit & Proceed with Construction

20% 80%

5 Code 1 – Approved without Comments 10% 90%

6 Final Issue / Upload in SAP / Issue for Construction (IFC) 10% 100%

3D modelling

Step Rule of Credit Increment % Cumulative %

1 Completion to 30% Status 20% 20%

2 Completion to 60% Status 25% 45%

3 Completion to 90% Status 30% 75%

4 Code 3 – Rejected, Revise & Re-Submit 0% 75%

5 Code 2 – Approved with Comments, Revise & Re-Submit & Proceed with Construction

10% 85%

6 Code 1 – Approved without Comments, Final Issue / Release into SAP

15% 100%

Piping Modeling

Step Rule of Credit Increment % Cumulative %

1 Preliminary : modeled point to point, branch fittings modeled, pipe support location shown, critical line issued for stressing

20% 20%

2 Detailed : line modeled with valves, fittings and instruments, ISO generating free of errors

25% 45%

3 Checking : Clash free, physical supports modeled, conforms to stress analysis,, extracted for checking

30% 75%

4 Code 3 – Rejected, Revise & Re-Submit 0% 75%

5 Code 2 – Approved with Comments, Revise & Re-Submit & Proceed with Construction

10% 85%

6 Code 1 – Approved without Comments, Final Issue / Release into SAP

15% 100%

Piping Calculation

Step Rule of Credit Increment % Cumulative %

1 Initiate Pipe Stress Calcs/Issue Deliverables to Mech Eng 20% 20%

2 Prepare / Issue for Client Approval 55% 75%

3 Release / Approved for Construction 25% 100%

Piping Drawing

Step Rule of Credit Increment % Cumulative %

1 Document Started, Format Accepted, TOC Complete 25% 25%

2 Issue for Review / Issue for Client Approval 25% 50%

3 Code 3 – Rejected, Revise & Re-Submit 10% 60%

4 Code 2 – Approved with Comments, Revise & Re-Submit & Proceed with Construction

20% 80%

5 Code 1 – Approved without Comments 10% 90%

6 Final Issue / Upload in SAP 10% 100%

MTO

Step Rule of Credit Increment % Cumulative %

1 Drawing / PDMS received or completed 10% 10%

2 MTO generation 45% 55%

3 Internal verify 35% 90%

4 MTO released 10% 100%

Rule of Credit

03 + Procurement

Procurement - Subcontract

Step Rule of Credit Increment % Cumulative %

1 RFQ issued to subcontractor 10% 10%

2 Technical Bid Evaluation (TBE) 5% 15%

3 Cost Bid Evaluation (CBE) 5% 20%

4 Purchasing Request (PR) 10% 30%

5 PO issued 30% 60%

6 Site mobilization 40% 100%

Procurement - Subcontract

Step Rule of Credit Increment % Cumulative %

1 RFQ issued to subcontractor 10% 10%

2 Tender evaluation done 5% 15%

3 PO placed to vendor 10% 25%

4 Received key vendor drawings 5% 30%

5 Approved key vendor drawing 5% 35%

6 Fabrication 50% 85%

7 Final inspection finished 5% 90%

8 Ex-Work 5% 95%

9 Delivery at site 5% 100%

Procurement – Valves, Bulk Materials

Step Rule of Credit Increment % Cumulative %

1 Issued RFQ 10% 10%

2 Technical Bid Evaluation 10% 20%

3 P.O. Issued 15% 35%

4 Receipt of Major Materials 10% 45%

5 Function Testing 25% 70%

6 Final Inspection 15% 85%

7 Inco Term Delivery Complete 10% 95%

8 PO invoice close out 5% 100%

Procurement – Vessel Standalone

Step Rule of Credit Increment % Cumulative %

1 Issued RFQ 10% 10%

2 Technical Bid Evaluation 10% 20%

3 P.O. Issued 15% 35%

4 Commencement of Fabrication 10% 45%

5 Hydro Static testing 25% 70%

6 Final Inspection 15% 85%

7 Inco Term Delivery Complete 10% 95%

8 PO invoice close out 5% 100%

Major Buyout (Pumps, Control System)

Step Rule of Credit Increment % Cumulative %

1 Issued RFQ 10% 10%

2 Technical Bid Evaluation 10% 20%

3 P.O. Issued 15% 35%

4 Commencement of Fabrication 10% 45%

5 Hydro Static testing 25% 70%

6 Final Inspection 15% 85%

7 Inco Term Delivery Complete 10% 95%

8 PO invoice close out 5% 100%

Rule of Credit

04 + Fabrication / Construction

Fabrication of Equipment Erection

Step Activities Increment % Cumulative %

Equipment Erection

1 Chipping & Padding 5% 5%

2 Lifting & rigging 40% 45%

3 Levelling & grouting 15% 60%

4 Preliminary alignment 20% 80%

5 Final alignment 10% 90%

6 Clear punch list 10% 100%

Fabrication of Piping Erection

Step Activities Increment % Cumulative %

Piping Erection

1 Material at site 5% 5%

2 Pipe laying 20% 25%

3 Preparation 20% 45%

4 Full welding execution 35% 80%

5 NDT 5% 85%

6 Pipe support erection 10% 95%

7 Final inspection 5% 100%

Fabrication of Piping

Step Activities Increment % Cumulative %

Piping Fabrication

1 Weld map drawing preparation 4% 4%

2 Withdrew material 3% 7%

3 Welding preparation 20% 27%

4 Spool assemble and tack weld 25% 52%

5 Full welding execution 20% 72%

6 Non Destructive Test (NDT) 6% 78%

7 Surface preparation and coating 15% 93%

8 Final Inspection 4% 97%

9 Deliver at Site 3% 100%

Tie-In work

Step Activities Increment % Cumulative %

Tie-in Work

1 Preparation done 10% 10%

2 Tagging done 10% 20%

3 Tie-in work 70% 90%

4 Final inspection 10% 100%

Hydrotest

Step Activities Increment % Cumulative %

Hydrotest

1 Preparation done 20% 20%

2 Testing 45% 65%

3 Reinstated 25% 90%

4 Punchlist cleared 10% 100%

Fabrication of Vessel

Step Activities Increment % Cumulative % WBS Weight

Fabricate Nozzles 5%

1 Weld/Fabricate nozzles 50% 50%

2 Completed NDE 50% 100%

Fabricate section number head 5%

1 Layout, cut holes prep 30% 30%

2 Fit/Weld nozzles/compensation pads 70% 100%

Fabricate Section Number 20%

1 Bevel, square, roll vessel 10% 10%

2 Weld long seams / re-roll 15% 25%

3 Layout, cut holes prep 10% 35%

4 Fit/weld nozzles/compensation pads 10% 45%

5 Build/install internal pads and external (trial fit) 55% 100%

Complete vessel / pressure envelope 55%

1 Fit Sections and Weld Circ Seams 25% 25%

2 Local PWHT with Overlap 10% 35%

3 Complete Internal / External Attachments 50% 85%

4 Hydrotest Vessel 15% 100%

Fabrication of Vessel

Step Activities Increment % Cumulative % WBS Weight

Paint 15%

1 Blasting 20%

2 Painting 40%

3 Lining & Acceptable Holiday (Spark) Testing 25%

4 Release 15%

Mechanical Work – Rotating Equipment

Step Activities Increment % Cumulative %

Rotating Equipment

1 Receive material 15% 15%

2 Rough, set. And prelim alignment 20% 35%

3 Level & grout 10% 45%

4 Final alignment 15% 60%

5 Run in 20% 80%

6 Clear punch list 20% 100%

Civil Work – Foundation & Concrete Paving

Step Activities Increment % Cumulative %

Foundation

1 Excavation 10%

2 Rebar 30%

3 Formwork 10%

4 Pouring concrete 15%

5 Strip & finishing 10%

6 Backfilling & compaction 15%

7 Clear punch list 10%

Civil Work – Cable Trench

Step Activities Increment % Cumulative %

Cable Trench

1 Excavation 35% 35%

2 Pre-cast concrete 25% 70%

3 Installation of concrete 25% 95%

4 Clear punch list 5% 100%

Civil Work – RCC Structure

Step Activities Increment % Cumulative %

Cable Trench

1 Excavation/PCC 10% 10%

2 Raft concrete 15% 25%

3 Super structure wall 40% 65%

4 Slab and backfilling 35% 100%

Electrical Cabling

Step Activities Increment % Cumulative %

Electrical cabling

1 Transportation to site 10% 10%

2 Tray erection 30% 40%

3 Cable laying 40% 80%

4 Cable connection 10% 90%

5 Testing 10% 100%

Electrical Fittings

Step Activities Increment % Cumulative %

Cable Trench

1 Installation 50% 50%

2 Cable connection 10% 60%

3 Testing 40% 100%

Fabrication of Piping

Progress tracking Excel sheet available for download in ignite.com

Rule of Credit in P6

05 + “Step” function in Primavera P6

Option 1 : Detail construction activity listed as activities.

Without Using STEPs Function

“Steps” is a function in Primavera P6 that allow user to divide activities into smaller increments and track the completion.

• Activity percent complete is calculated based on the relative weights of the completed steps versus incomplete steps. • This method suit of large activities that contents few activities steps.

Steps make it possible to describe and report progress for activity work at a granular level by breaking an activity into its component parts.

With STEPs Function

“Steps” features in Primavera P6 in an interesting features to be used rather than creating a list of activities short-durations and no priorities. If you’re going to use the Steps feature in Primavera™ P6 to progress % Complete you need to check the “ Activity Percent Complete Bases on Actual Steps” box in Project Calculations tab.

With STEPs Function

As you tick this box you will get a message explaining that the Physical Percent Complete values will be recalculated from the steps. Note: if an activity is set to Percent Complete Type “Physical” but does not have Steps, then the values will NOT be recalculated. It will only recalculate values that have steps assigned AND are Percent Complete Type “Physical”

With STEPs Function

Following that you need to use “ Physical % Complete “on the Activity that contains the steps

With STEPs Function

Steps Function

To indicate the portion of activity work that a single step represents, you can assign it a numerical value, or weight. Once work for a step is underway, Primavera can use the step weight and the reported progress of step work (Step Percent Complete) to calculate the percentage of total work that has been completed for the activity (Activity Percent Complete).

In the diagram above , each step is assigned a Step Weight and the Step Weight Percent is calculated. When you add a step to an activity that already has steps defined, the default weight for the new step is 1, providing no steps have been marked Completed, and no steps have a Step % Complete of 100%.

Option 2: Detail construction activity listed as steps Steps be saved as templates for repetitive process.

With STEPs Function

Primavera P6 STEPs Function

Thank You …