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Posts Tagged ‘TIC’

Do You Always Under Estimate Your Projects?

October 31st, 2009 No comments

 

I got a request the other day looking for someone to do a workshop on estimating. Some engineers were interested in what projects really cost and how are these costs developed. It sounded like they were doing the estimating and were always wrong. If you do not understand what goes into an estimate and the process involved you will always end up with a poor estimate. In this article I want to give them, and you, the detail that goes into an total installed cost (TIC) estimate for a complex project (multi-disciplined project). This is an estimate that covers the on site field work as well as the engineering and owners costs.

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Project Procurement II

June 7th, 2009 No comments

This is a continuation of the procurement article from March. Part of the project process is developing TIC estimates. In the early stages you usually use budgetary quotes. These you will get from suppliers and condition them based on your experience. Depending on your company policy, you may get the budgetary quotes or procurement can get them. They are based on  preliminary information known at the time. In the later stages you will have to get firm quotes which is a procurement function. Typically the owner will procure the engineered equipment and the contractors will procure the  bulks.

The procurement cycle starts when you prepare the Request For Proposal (RFP) and the procurement group issues it to suppliers. Once the RFP is issued, all communication with the supplier should then go through procurement. The procurement groups function is to ensure the Purchase Order (PO) covers all the items asked for and tracks any changes. If o t h e r s a r e  h a v i n g  i n d e p e n d e n t conversations with the suppliers and changing items and quantities, you will have no control over the cost. In fact your procurement agent should advise the……………… click here

Project Procurement I

June 7th, 2009 No comments

 

 

In my early days I learned that if you want to get a project done on time, you have to get the equipment / material to the contractor. Now, I’m sure most have you have been involved in a project that has gone off track because the equipment was late, holding up the contractor. Some of the causes are lack of planning for purchase of long lead items, the procurement cycle, expediting, drawing approvals and in some cases lack of vendor response. In this article, I want to talk about some of these procurement issues to help you improve on your project execution and get the material there on time.

There always seems to be confusion as to whether we are working with a Request For Proposal(RFP) or Request For Quotation (RFQ)……………….. click here


Hidden Contracts You Didn’t Know About

February 15th, 2009 No comments

We were in the process of buying the electrical equipment for a new plant when the electrical engineer came in with the bad news. They had been told by the electric utility the project would have to buy the transformer from the utility company. We could understand hooking up the transformer, but to actually have to buy the transformer was crazy, which we told him in no
uncertain terms! The transformer we needed cost $750,000 from our referred supplier, while the utility wanted $1,250,000 for basically the same thing. They put a few bells and whistles on it but the cheaper version would work just as well. Was there any way around this? Apparently not. It was the law in this jurisdiction. So just like that, POW, we were, $500,000 behind in the budget. Unfortunately this senario is all too familiar and is just one example of what I call hidden contracts. These are contracts your company has with out side suppliers / agencies / government bodies that you are not usually aware of until the bill comes in.
Utilities are just one of those hidden contracts.

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Vendor Data Requirements (3)

December 15th, 2008 No comments

This article is a continuation of the article I started in October, a discussion on Vendor Data Requirements and their importance to your project. This is the vendor data that you require with their proposal and data required  later in the project should they be the successful bidder. In review, this document is typically used when purchasing equipment and outlines to the vendor exactly what information you expect him to include with his quote. As I started in last months article, this is a continuation of the section on Performance Required by the Successful Bidder’ which outlines the conditions the successful bidder will be required to perform to. In this article I will complete the Performance Required by the Successful Bidder’ section.

Mechanical
If you don’t have a mechanical fabrication and installation standard / guideline then you should make up one to protect yourself. It covers items such as any base plates should be of rigid construction and have grout and vent holes to ensure the plate can be properly grouted.
One issue that happened to me …..

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Vendor Data Requirements (cont’d)

November 15th, 2008 No comments

In October I started a discussion on Vendor Data Requirements and their
importance to your project. This is the vendor data that you require with their proposal and later in the project should they be the successful bidder. In review, this document is used when purchasing equipment and outlines to the vendor exactly what information you expect him to include with his quote. In this article I will cover additional information you should be asking for and why you need the information. Following are some  additional data items typically required from a vendor ;
6. Transport
As you have to unload project equipment you need to know how the equipment will be delivered to your site and the number of pieces. If it is coming by normal non-restricted transportation methods you can organize the proper equipment and set a time for the unloading. If the equipment is too large and has to be transported by restricted methods you want to know how it is being shipped as you will have to handle it.

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Vendor Data Requirements

October 15th, 2008 Comments off

Last month we talked about the Standard Component List and it’s importance to your project in helping make sure you get what you want and what you need. Another important document, that goes along with the Standard Component List, is the Vendor Data Requirements. This document is typically used when This document comes in a couple of formats, one as a printed document describing in detail what information you are looking for and the other as an itemized list.

Either one works as long as you outline to the vendor what information you require. The printed document is a standard one and covers every possible piece of equipement. The itemized lists can be tailored to suit what you are purchasing. As an
example, you can develop a list for rotating equipment and one for pressure vessels and use them accordingly.

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