International Approach to Predicting

Construction Labour Hours

Speaker Shane Forth
Vice President Association of Cost Engineers
Manager of Project Controls AMEC Power and Process Europe

Siberian Regional Cost Estimating Centre

International Research and Practice Conference
10th 11th November 2009 OMSK, Russia

Shane Forth FACostE, FAPM

Power and Process Europe

Project Controls Strategy

Operational Excellence
AMEC Project Management Academy
Project Support

Whessoe Oil & Gas

Association of Cost Engineers

Vice-President
Chairman, Planning & Scheduling SIG

Chairman Project Control Managers

Working Group

Bid Manager and Project Services

Kuwait Santa Fe Braun

Scheduling Engineer

Other Experience

Various Working Groups, Graduate &

Apprenticeship Schemes Occupational
Standards

Kvaerner, ICI, Simon Carves, John Laing

Estimate Accuracy
There is no merit in attempting to achieve a level of
accuracy that is inconsistent to the amount of
information available, particularly as this could lead to
the Estimate being given a perceived credibility it
does not deserve

Estimate Accuracy
1 Feasibility (- 25% to + 50%)
2 Concept (- 15% to + 25%)

Estimate Accuracy

3 Basic Design (- 10% to + 15%)

4 Detail Design (- 5% to + 10%

+
_
0%

Completeness of Design

95%
4

Information for Estimating

1 Feasibility

Generalised scope definition

Required capacity of plant
Approximate Weights
Preliminary project schedule

Information for Estimating

2 Concept

Plant Location
Preliminary process diagram
Main statutory requirements
Equipment list
Outline engineering specifications
Preliminary block plot plan
Offsites and utilities by system and capacity
Budget quotes for Equipment
Preliminary equipment data sheets
Preliminary process and instrument diagram

Information for Estimating

3 Basic Design Firm quotes for major equipment
Detailed scope definition
Finalised heat and mass balance calculations
P & IDs for process and offsites
Detailed plot plans
Detailed engineering specifications
Preliminary Material Take Offs
Operators requirements
Local authority requirements
Project master schedules
Information on site conditions

Information for Estimating

4 Detail Design Local availability of labour and materials
Detailed equipment list
Completed and approved plant layout
Electrical single line diagrams
Detailed equipment specifications/data sheets
Detailed material take offs
Firm quotations from potential vendors
Quotations from potential contractors
Commissioning and operating information
Installation and fabrication specifications
Construction subcontract enquiries
Production design phase continues
8

1 Feasibility - Factors
Cost x 4.0

Cost x 5.0

Estimated Total Installed Cost

(from which construction manhours can be estimated)

Cost x 3.0

Cost x 6.0
9

1 Feasibility - Factors

Construction % of Total Installed Cost

Average Labour Manhour Rate
= Estimated Construction Manhours

10

1 Feasibility - Order of Magnitude

11

1 Feasibility - Order of Magnitude

12

2 Concept - Principle Quantities

Piping

Unit of
Measur
e

Unit
Qty

Pipework

Metres

Supports

Tonnes

Tests

No of

40

Valves

No of

300

75000
200

E&I
Electrical cable

Metres

100000

Instrument cable Metres

50000

Electrical devices No of

800

Motors

No of

26

Instruments

No of

400

Control Systems

I/O Count 6000

13

Onshore
1 Feasibility

2 Concept

(typically - 25 % to + 50 %)

(typically - 15 % to + 25 %)

In house Estimates for Equipment and

Tagged Items
Factored from Equipment and Tagged
Items for Bulk Materials
Order of Magnitude from historical data on
similar projects
Estimate for Project Sanction

Preliminary details from suppliers for Major

Equipment and Tagged Items
Principle quantities (approximate) for
bulk materials
Base norms adjusted for location factors
and productivity assumptions
Estimates for Optioneering

3 Basic Design

4 Detail Design

(typically - 10 % to + 15 %)

(typically - 5 % to + 10 %)

Firm details from suppliers for 80%-90% of

Equipment and Tagged Items
Preliminary MTO in house, forced detail
Base component norms adjusted in house
for location factors and productivity
assumptions, or as provided by
subcontractors
Target Cost Estimate

Firm details from suppliers for 90% -100%

of Equipment and Tagged Items
Intermediate and Final MTOs
Base component norms adjusted in house
for location factors and productivity
assumptions, or as provided by
subcontractors
Definitive Estimate

14

Offshore
1 Feasibility

2 Concept

(typically - 25 % to + 50 %)

(typically - 15 % to + 25 %)

In house Estimates for Equipment and

Tagged Items
Estimated Weight
Order of magnitude from historical data on
similar projects
Estimate for Project Sanction

Preliminary details from suppliers for Major

Equipment and Tagged Items
Estimated Weights for Bulk Materials
Base norms adjusted for location factors
and productivity assumptions
Estimates for Optioneering

3 Basic Design

4 Detail Design

(typically - 10 % to + 15 %)

(typically - 5 % to + 10 %)

Firm details from suppliers for 80%-90% of

Equipment and Tagged Items
Preliminary MTO in house, forced detail
Base component norms adjusted in house
for location factors and productivity
assumptions, or as provided by
subcontractors
Target Cost Estimate

Firm details from suppliers for 90% -100%

of Equipment and Tagged Items
Intermediate and Final MTOs
Base component norms adjusted in house
for location factors and productivity
assumptions, or as provided by
subcontractors
Definitive Estimate

15

Shutdown
For Poorly Defined scope

Rough Estimate

Estimate in manhour ranges

+ management fee

500 Jobcards
7000 Activities
=
20 Manhours per Activity

116

Improved Estimate

120
100

140,000 Manhours

89
75

71

80

- Lump Sum, must exclude emergent work

- For repeat shutdown at the same plant,
estimate manhours using historical data
- Visit site during tender period for preliminary
discussions and assessment - especially
important
for unfamiliar plant

49

60

30

30

40

23

17

20
0 Vessels
Inspect

Control Exchangers Drums

Valves

NRVs

Fin
Fans

Pumps

Towers

Other

16

Shutdown

Tender Period
(typically 2 months)

Preparation
(typically 6 months)

A Preliminary Turnaround list

B Assess Workscope

Shutdown Event
(typically 3 weeks)

D Prepare Work Packs

F Preliminary Plan

H Final Plan and

G Review Preliminary Plan

J Shutdown Event

E Prepare Jobcards
(activities, manhours, etc)

Manhours Agreed

C Outline Plan

17

Shutdown

18

Estimate - Base Norms

Location Factor Adjustments

19

Estimate Base Norms

Project Specific Adjustments
Considerations
Climate
Site Layout and Access
Site Location How Remote ?
Clock In and Walking Time to Workface
Work Days and Hours
Labour Density
Industrial Relations
Availability of Skilled Trades
(Competing Projects, use of Local & Travelling Labour)

Use of Equipment, Working Methods

(eg.Machine or Hand Excavate)

Permit to Work on Brownfield Sites

Contract Conditions

20

Estimate - Quantity Allowances

Certain quantity allowance may also be applied to the base estimate
for expected but unidentified work:

Engineering

Material

Cutting

Construction

Growth
Allowance
Anticipated

Take Off
Allowance
Applied
to for

& Waste
Allowance
Anticipated

Increase

design growth
due to internal
design changes

additional
materials to be
supplied due to
anticipated
Engineering
Growth
Allowance

amount of
materials that is
cut and wasted
(eg.due to
standard
pipe lengths,
loose flanges

Allowance
Applied
to
construction
labour,
equipment and
services due to
anticipated
Engineering
Growth
Allowance
21

Component Norms - Construction

INDEX

22

Component Norms - Construction

INDEX

1
2

23

Component Norms - Construction

INDEX

1
2

24

Component Norms - Construction

INDEX

1
4
2

25

Construction Manhours Prediction

INDEX

1 Estimated Manhours = Component Norms x Estimated Quantities

26

Construction Manhours Prediction

INDEX

1 Estimated Manhours = Component Norms x Estimated Quantities

2 Revised Manhours = Component Norms x AFC Revised Quantities

27

Construction Manhours Prediction

INDEX

1 Estimated Manhours = Component Norms x Estimated Quantities

2 Revised Manhours = Component Norms x AFC Revised Quantities
3 Achieved Manhours = Component Norms x Installed Quantities

28

Construction Manhours Prediction

INDEX

1 Estimated Manhours = Component Norms x Estimated Quantities

2 Revised Manhours = Component Norms x AFC Revised Quantities
3 Achieved Manhours = Component Norms x Installed Quantities
4 Actual Manhours
= Expended Manhours

29

Construction Manhours Prediction

INDEX

1 Estimated Manhours = Component Norms x Estimated Quantities

2 Revised Manhours = Component Norms x AFC Revised Quantities
3 Achieved Manhours = Component Norms x Installed Quantities
4 Actual Manhours
= Expended Manhours
5 Predicted Manhours = Actual Manhours + Productivity Forecast for Revised to go

30

Construction Manhours Prediction

INDEX

1 Estimated Manhours = Component Norms x Estimated Quantities

2 Revised Manhours = Component Norms x AFC Revised Quantities
3 Achieved Manhours = Component Norms x Installed Quantities
4 Actual Manhours
= Expended Manhours
5 Predicted Manhours = Actual Manhours + Productivity Forecast for Revised to go

This is part of Earned Value Analysis (EVA)

31

Estimating Historical Data

Key Aspect
Production of accurate estimates from high quality estimating base data

The Solution
Past projects close-out information and statistics
Bulk material quantities, weights and costs
Engineered items details and costs
Project Controls Information (documents, changes, man-hours and
costs)

must be processed promptly at project completion

to maintain factors, norms etc.
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Thank you for your attention.

Excellence in Cost Engineering
www.acoste.org

The Association of Cost Engineers

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