Beyond the Ordinary

The Project

As we have stated previously, we think the project is actually starts at time the idea for a new product or expanded product line was formed and runs to the time of the first actual delivery. Business owners never agree with this concept on the first meeting and in fact are reluctant to ever totally agree. Some insist that the project is the detailed design phase and the construction phase. We accept whatever boundary the owner imposes.

Hopefully, after confidence in our project management or chemical engineering services is built, the project boundaries will expand to encompass at least the following four steps:

  • Preliminary design and estimate
  • Gear-up and funding
  • Detailed design
  • Construction
  • Preliminary design and estimate

    There are a number of tasks to be completed during this phase. Below we have listed the most common and provided some remarks about each:

    • Obtain site information, soil information, and weather information
    • Prepare the plant block flow diagram. Basically this is a large sheet of paper upon which one draws blocks indicating the major process steps and utilities such as boilers, generators, and waste handling facilities.
    • Designate the process areas. Using the plant block flow diagram, the blocks are grouped or split as required to cluster operations into the most efficient and safe process areas. For example, the block that was labeled raw material receiving may be split into a raw material stores area for the bulk dry material. a tank farm for the liquids , and the minor processing aids be assigned to another storage area.
    • Prepare the heat and material balances. The operating areas are divided into the unit operations and a material balance around the plant and around each unit operation is performed, At this time expected utility demands are identified and estimated, points of emissions are identified and estimated, and points of waste generation are identified and estimated,
    • Prepare the process flow diagrams. The material balances, which are basically average flow quantities, are transcribed into flow diagrams with with expected actual rates and details such as pressure and composition of each stream. Auxiliary flow paths are added such as vapor equalizers, recirculation when needed, blow down collection, and surge volumes between unit operations
    • Prepare the interlocking diagrams. The critical safety controls are identified and drawn on the process flow diagram.
    • Prepare the preliminary mechanical arrangements. Items of equipment are located and a foundation outline sketched in so building outlines can be prepared.
    • Prepare the preliminary site layout. The building outlines are arranged on the site so that roads, pipe bridges, and underground services can be sketched in.
    • Prepare the preliminary piping and instrumentation diagrams. The Process Flow diagrams are transformed into preliminary PIDs.
    • Prepare the preliminary equipment list. In addition to the major equipment, the balance of the plant equipment is listed from the PIDs.
    • Prepare the preliminary instrument list. A list of control loops and field instruments is taken from the PIDs.
    • Prepare the preliminary motor list. A motor list is taken from the equipment list with the horsepower required for each estimated.
    • Prepare detailed purchase specifications for the major equipment and long lead equipment.
    • Using the specifications, obtain vendor prices and delivery times for the major equipment and long lead equipment.
    • Perform the preliminary design hazard analysis.
    • Prepare environmental estimates and environmental permit applications.
    • Prepare the preliminary construction plan.
    • Prepare the capital appropriation total installed cost estimate, +/- 10%.
    • This is a lot of work. Most organizations do not have the extra people it takes to do this amount of work on short notice. We prefer to use an A/E for the work. There are several reasons

      • Most viable A/E firms can undertake work like this with only a few weeks notice.
      • They understand the documents needed and the quality of the estimate needed.
      • They use professionals that will check the preliminary design. Using an outside engineer to verify the preliminary design reduces the chance of design error.
      • By selecting the project A/E before the preliminary work starts, a project familiarity will be attained that will speed up the detailed design.

    Gear up and funding

    During this phase all the required construction permits are files and the appropriation request is made. Generally work continues to improve the manufacturing process and if test marketing is conducted, it continues through this period also. At this time the detailed planning for detailed design and construction must be done and the detailed planning for checkout and start up should begin. Some of the tasks that we call "gear up" along with comments are listed below:

    • Designate the Project Task Force members.
    • Prepare the Task Force administrative procedures.
    • Prepare the Purchasing Plan. This plan recognizes that the task force will be in residence with the A/E during detailed design and moves to the construction site at the end of detailed design. It recognizes and authorizes any early placement orders and any sole source purchases. It also provides for the purchase of set quantities of construction materials (pipe, valves, fittings, wire, conduit and so on). It also describes the construction contracts expected as to which contacts will be lump sum and what items will be time and material.
    • Prepare the Expediting Plan. Whenever an item falls behind schedule by a predetermined period, corrective action needs to be taken. This may mean visits to vendors, authorization of overtime, or other corrective measures.
    • Prepare the Control Schedule. This is the detailed schedule used to measure progress in design and construction. The major difference between this schedule and any other project schedule is that the measurement is always the amount of work estimated to complete the task. For example a task that requires 600 hours that still requires 580 hours to complete has only progressed 20 hours. Although this sounds unusual, this method flags late completion items earlier than any other method.
    • Prepare the Commitment Register. This is a log of purchasing commitments updated daily as commitments are made. It is used along with the control budget to report budget status.
    • Prepare Control Budget. This contains all the monies listed on the engineering and construction estimate plus all additional costs anticipated for Task Force expenses and consumables. As commitments are made, the actual commitments are recorded, replacing the estimated entries, to keep an accurate forecast of total project costs. This is the earliest predictor of cost over or under runs available.
    • Prepare the Receiving and Warehouse Procedures. One of the first buildings constructed is the warehouse. Its first use is to store constitution materials. Procedures are put into place to account for receiving items so invoices can be paid, and to allow for authorized withdrawal by the construction contractors. The plan also addresses the placement of items in the warehouse to allow for withdrawal by the construction contractors.
    • Prepare final specifications for the major equipment and long lead equipment
    • Prepare the Design Criteria documents. We have prepared detailed description of this document in the resource list.
    • Prepare the Select the A/E.

    Detailed design

    • The first work item for the A/E to do is create the Design Transmittals.
      • The Design Criteria for each process area are presented to the A/E to start the work.
      • The A/E prepares a Design Transmittal in response to each Design Criteria detailing how those Design Criteria objectives will be fulfilled including a drawing and specification count and a manning plan.
      • The Project Engineers's approval of a Design Transmittal is authorization for the A/E to proceed on the detailed work.
      • Although this sounds like a lot of work, it is work that will be done at some point in the detailed design. Making this the first step forces the design supervisors and job captains to think their way through the work to be done and resolve any problems before work is done by the designers that may have to be redone when the conflict would have been discovered.
    • As authorized and per the construction plan, the design work proceeds culminating in construction packages in construction order.

    Task Force Purchasing

    Purchasing for the project is conducted by the Task Force Purchasing Agent. Several aspects of this activity are:

    • Long lead items and major equipment will be purchased almost immediately after funds are authorized.
    • Awarding a contract to the A/E is the next major activity.
    • As specifications and construction packages are approved, requests for bid are placed. Upon receipt of bids, a bid tally is prepared, all commercial information is stripped from the bids, and the bid are evaluated by the project engineer for acceptability. The technical ranking is returned to the purchasing agent that places the order. Generally the lowest priced technically qualified items are purchased. Consideration is given to standardization of equipment for price discount and minimization of spare parts.
    • The A-E should prepare material take-off for all the construction items. You may want the project team to buy 80% of these items for delivery job site because of quantity discounting and to prevent mark-up by the construction contractors. The construction contractors can be allowed to furnish the balance at an agreed mark-up.
    • For communication and focus the Task force Purchasing Agent should be in residence along with the other Task Force members.


    We don't directly manage construction and don't have many remarks to make on construction details. There are some preparation items that need to be addressed.

    • The construction plan addresses the most expedient way to complete construction. A typical sequence might be:
      • Clearing, grubbing, and draining.
      • Excavating and backfilling starting with security buildings and the warehouse, perhaps multiple contract packages.
      • Major foundations starting with the security buildings and the warehouse, perhaps multiple contract packages.
      • Setting the major (heavy) items of equipment.
      • Steel erection.
      • And so on
    • There will be many construction contracts, each bid and awarded on qualification and price, and each managed to be finished on time.

The Architect-Engineer

    Selection of the A/E

    One of the first, and a very important task is to select the Architect-Engineer (A-E).

    • The first task is for the project manager to think through along with the owner, what arrangement fits the interest of the operation as well as the project. For example:
      • One could consider a specialty engineering company to do the chemical process part of the design, a local environmental engineering company to do the environmental permits, and a larger A/E to do the detailed detailed design work. The logic in this approach is that the process work and the environmental work would be on-going while the detailed design is a one time effort and a cost benefit to using the smaller companies for the smaller pieces of the work.
      • One could consider using an A/E for all the work. The logic in this case is centering of responsibility and communication and some gains in delivery time
    • Another question is whether to use a small engineering company that may have to subcontract parts of the work or a big engineering company.
      • A small company is almost always very easy to work with but almost always late on delivery. If they have a problem on another job they will always take resource from all the jobs in house, including your job. They sincerely want to deliver on time but when it comes time to add resources to bring your job back on schedule they will add what they have but it's never enough.
      • Although we have seen exceptions, a big company has resources to meet schedules, they lack flexibility not to mention an element of bureaucracy that is always unpleasant.
    • The third question is whether to award a lump sum contract or a time and material contract.
      • We prefer time and material and always recommend time and material for a "first time" design.
        • The work you pay for is the actual work it takes to do the detailed design plus whatever mistakes are made along the way.
        • If you find that you need to modify the work scope, it is very simple to give any A/E new instructions under time and material.
        • Presenting time sheets is a part of time and material invoicing so it is relatively easy to review the amount of hours charged on the job against progress.
      • If you prefer to award a contract lump sum:
        • The contract will cover all the actual work envisioned plus about 10% to allow for mistakes whether the mistakes are made or not.
        • If you have to change direction, the contract has to be modified which may take some time to do.
        • The A/E may not be willing to show time records under this arrangement so monitoring progress is harder.
    • One of the difficult decisions is who to select.
      • First of all make a list of A/E firms that from their advertizement and websites appear to be qualified to do the work you need and have some record of success doing these kind of jobs.
      • Send a letter to each one announcing your planned work and ask for a statement of qualification, list of similar projects, and references you can call.
      • The reply will not be uniform. Some will send qualifications, some will also send a list of similar projects, some will add resumes of key individuals, and some may actually send references. From this response, make a short list of candidate companies.
      • Make a detailed list of how you are going to make the selection. Figure out what traits and experience is required and how much each trait matters. We have provided a technical evaluation sample on our resource page.
      • Visit each candidate firm. Talk to the project manager, the job captains, and some of the engineers. Look at some of the work in progress. Ask for their time and material charging schedule. Ask enough questions that you can fill out your evaluation form.
      • Finish the forms and the math exercise to rank the firms. You will probably end up with several acceptable firms. At this point you will have to make a decision and be prepared to live with the decision
      • Reject any "good deal" immediately. For example, a mechanical contractor that offers to design foundations for free may provide big strong foundations but they are not going to actually perform the engineering which may put you, the owner at some risk, and are going to cause a problem with the construction when their foundations interfere with some planned underground electrical or utility needs.

    Managing the A/E.

    Managing the A/E's work should be the easiest part of the job. When the funding is approved and the relevant permits issued, the A/E will be provided with the construction plan and will know what construction packages are required and the timing, The preliminary information, expected vendor information delivery from the purchasing plan, and will be given the Design Criteria to start the preparation of the Design Transmittals. All the lead engineers will be professional engineers that know their specialty. There is little to do from here on to technically manage the A/E. But there is the matter of schedule. We suggest that as the Design Transmittals are being prepared, that the Task Force work with the A/E project management to make the following points:

    • On a time and material contract the A/E will be paid even when they make a non-professional mistake. The A/E should have offered a guaranty on the professional work. Nonprofessional mistakes include working on the wrong part of the job, excessive detail, or other errors.
    • Even though the A/E will be paid, progress reports have to be based on a weekly estimate to complete from all disciplines on all design packages. Anytime the actual progress measured this way fall behind, the A/E should note this and explain to the project manager's satisfaction what they intend to do to regain scheduled progress.

Now, all we have to do is build it. When the concrete is cured, the welding done and the last bolt tightened, we should be able to go touch that factory that was only in our eye some months ago.