Major project execution in Alberta has historically been challenged by cost and schedule overruns, further complicating the province’s ability to attract investment in new growth in the new normal of sub-$50 oil pricing.
A big gap area that needs to be addressed is the way engineering work packages (EWPs) are progressed, according to the Construction Owners Association of Alberta (COAA).
“I don’t think there’s any EPC that is progressing properly with their EPWs,” says COAA’s Glen Warren.
He gives an example of a project he worked on where it seemed as if many EWPs would be completed at the same time, making for a lot of work for the construction piping crew.
“We added some more people to our crew. Engineering said, ‘We’re 95 per cent through our EWP. We should have them onsite next week.’ Next week comes along, they’re still 95 per cent complete and saying we’ll have it by next week. Next week comes along, they’re still 95 per cent complete — and they didn’t even have the vendor data yet.”
Warren is co-chair of the COAA research team that developed Advanced Work Packaging, a project execution tool that outside of Alberta has resulted in 25 percent productivity improvement and a 10 percent reduction in total installed cost. It is not yet widely applied in Alberta.
The strategy is dependent on engineering and procurement providing their deliverables to meet the path of construction. Contractors mobilize based on the EWP forecasts.
Without timely, accurate information for procurement updates and without equipment and materials on site, cost overruns can occur. That’s where standardizing the progress of EWPs comes into play, through a system referred to as “rules of credit” that helps determine the percentage of completion a project has achieved as it moves along.
To avoid costly misunderstandings, Warren says that formal, project-specific EWP progressing rules need to be in place so everyone is on the same page.
There are many reasons why projects can go off-track through EWP stages, he notes.
Rules of credit could be poorly understood, misunderstood or not utilized at all. EWP development could be constrained by outside forces such as late or insufficient vendor data. What’s important is that there was a clear gap in many construction projects the COAA studied – something needed to be done about it.
The COAA’s rules of credit guidelines — which should be created by the appropriate project team and should be specific to each project — are a series of percentages that cumulatively add up to the full EWP.
As an example, for each EWP, initial scope identified could be a five per cent credit toward completion. Initial design modeling would be 35 per cent of progress, making the entire EWP cumulatively 40 per cent complete (see below).
Warren singles out preliminary vendor data as an element often missed during standard EWP progressing. He uses the example of attaching piping to a pressure vessel.
“We need to know where each of those flanges are, what elevation, what orientation and what size, so the piping engineer can design his pipe to fit where it’s going to fit on that piece of equipment. Quite often, engineering says that they’re almost complete, and yet they don’t even have any drawings from the vendors as to where their piping finishes.”
COAA’s rules of credit guidelines are meant to tie in critical procurements, such as proper vendor data, into each individual EWP, where applicable.
After preliminary vendor data comes a bill of materials that engineering provides to the supply chain group to procure. In COAA’s rules of credit, there’s a section for preliminary vendor data and one for final vendor data, the final information from the vendor. After final vendor data, the engineers can proceed with finalizing their models.
“Quite often,” says Warren, “I’ve been the recipient of an EWP out of an engineering house and I look at it and there’s a whole bunch of holes.”
COAA believes EWP progressing needs to be standardized so that the person receiving the EWPs can verify they are complete.
COAA’s rules of credit guidelines aren’t meant to be one size fits all. The template is meant to be changed depending on the discipline, with milestones added as needed for internal control. An example would be piping EWP progression (see below).
Milestones in this EWP would be piping and instrumentation designs and line designation tables being issued for construction, preliminary stress tests and the final stress test.
Warren concludes, “As long as everybody is aware of what the rules of credit are, they can look at [an EWP] progress and have a pretty good idea when some of that will be complete.”
JWN's Build Better content is provided as part of our partnership in the Alberta Projects Improvement Network with COAA, GO Productivity and Supply Chain Management Association Alberta.