Presented 10th November 2009 at International Research and Practice Conference, Omsk, Siberia. Participants included ACostE, Union of Russian Builders, Government of Omsk Region, FSI, OJSC, Siberian Regional Cost Estimating Centre

1. 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

2. Shane Forth FACostE, FAPM
Power and Process Europe  Association of Cost Engineers
– Project Controls Strategy – Vice-President
– Operational Excellence – Chairman, Planning & Scheduling SIG
– AMEC Project Management Academy
– Project Support
– Chairman Project Control Managers
 Whessoe Oil & Gas Working Group
– Bid Manager and Project Services
 Kuwait Santa Fe Braun
– Scheduling Engineer – Various Working Groups, Graduate &
Apprenticeship Schemes Occupational
Standards
 Other Experience
– Kvaerner, ICI, Simon Carves, John Laing
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3. 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
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4. Estimate Accuracy
1 Feasibility (- 25% to + 50%)
2 Concept (- 15% to + 25%)
3 Basic Design (- 10% to + 15%)
Estimate Accuracy
4 Detail Design (- 5% to + 10%)
+
_
0% Completeness of Design 95%
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5. Information for Estimating
1 Feasibility Generalised scope definition
Required capacity of plant
Approximate Weights
Preliminary project schedule
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6. 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
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7. Information for Estimating
3 Basic Design Firm quotes for major equipment
Detailed scope definition
Finalised heat and mass balance calculations
P & ID’s 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
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8. 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
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9. 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

10. 1 Feasibility - Factors
Construction % of Total Installed Cost
Average Labour Manhour Rate
= Estimated Construction Manhours
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11. 1 Feasibility - Order of Magnitude
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12. 1 Feasibility - Order of Magnitude
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13. 2 Concept - Principle Quantities
Unit of Unit
Measure Qty
Piping
Pipework Metres 75000
Supports Tonnes 200
Tests No off 40
Valves No off 300
E&I
Electrical cable Metres 100000
Instrument cable Metres 50000
Electrical devices No off 800
Motors No off 26
Instruments No off 400
Control Systems I/O Count 6000 13

14. Onshore
1 Feasibility 2 Concept
(typically - 25 % to + 50 %) (typically - 15 % to + 25 %)
 In house Estimates for Equipment and  Preliminary details from suppliers for Major
Tagged Items Equipment and Tagged Items
 Factored from Equipment and Tagged  Principle quantities (approximate) for
Items for Bulk Materials bulk materials
 Order of Magnitude from historical data on  Base norms adjusted for location factors and
similar projects productivity assumptions
 Estimate for Project Sanction  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  Firm details from suppliers for 90% -100% of
Equipment and Tagged Items Equipment and Tagged Items
 Preliminary MTO – in house, forced detail  Intermediate and Final MTO’s
 Base component norms adjusted in house  Base component norms adjusted in house
for location factors and productivity for location factors and productivity
assumptions, or as provided by assumptions, or as provided by
subcontractors subcontractors
 Target Cost Estimate  Definitive Estimate 14

15. Offshore
1 Feasibility 2 Concept
(typically - 25 % to + 50 %) (typically - 15 % to + 25 %)
 In house Estimates for Equipment and  Preliminary details from suppliers for Major
Tagged Items Equipment and Tagged Items
 Estimated Weight  Estimated Weights for Bulk Materials
 Order of magnitude from historical data on  Base norms adjusted for location factors and
similar projects productivity assumptions
 Estimate for Project Sanction  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  Firm details from suppliers for 90% -100% of
Equipment and Tagged Items Equipment and Tagged Items
 Preliminary MTO – in house, forced detail  Intermediate and Final MTO’s
 Base component norms adjusted in house  Base component norms adjusted in house
for location factors and productivity for location factors and productivity
assumptions, or as provided by assumptions, or as provided by
subcontractors subcontractors
 Target Cost Estimate  Definitive Estimate 15

16. Shutdown
For Poorly Defined scope Rough Estimate
Estimate in manhour ranges 500 Jobcards
+ management fee 7000 Activities = 140,000 Manhours
20 Manhours per Activity
116
Improved Estimate
120 - Lump Sum, must exclude emergent work
- For repeat shutdown at the same plant,
89 estimate manhours using historical data
100
- Visit site during tender period for preliminary
75 71 discussions and assessment - especially important
80 for unfamiliar plant
60
49
30 30
40 23
17
20
0 Vessels Control Exchangers Drums NRVs Fin Pumps Towers Other
Inspect Valves Fans
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17. Shutdown
Tender Period Preparation Shutdown Event
(typically 2 months) (typically 6 months) (typically 3 weeks)
A Preliminary Turnaround list D Prepare Work Packs
E Prepare Jobcards F Preliminary Plan H Final Plan and
B Assess Workscope (activities, manhours, etc) Manhours Agreed
C Outline Plan
G Review Preliminary Plan J Shutdown Event
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18. Shutdown
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19. Estimate - Base Norms
Location Factor Adjustments
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20. 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

21. Estimate - Quantity Allowances
Certain quantity allowance may also be applied to the base estimate
for expected but unidentified work:
Engineering Material Cutting Construction
Growth Take Off & Waste Increase
Allowance Allowance Allowance Allowance
Anticipated Applied to for Anticipated Applied to
design growth additional amount of construction
due to internal materials to be materials that is labour,
design changes supplied due to cut and wasted equipment and
anticipated (eg.due to services due to
Engineering standard anticipated
Growth pipe lengths, Engineering
Allowance loose flanges Growth
Allowance
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22. Component Norms - Construction
INDEX
1
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23. Component Norms - Construction
INDEX
1
2
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24. Component Norms - Construction
INDEX
1
2 3
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25. Component Norms - Construction
INDEX
1
4
2 3
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26. Construction Manhours Prediction
INDEX
1 Estimated Manhours = Component Norms x Estimated Quantities
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27. Construction Manhours Prediction
INDEX
1 Estimated Manhours = Component Norms x Estimated Quantities
2 Revised Manhours = Component Norms x AFC Revised Quantities
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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
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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
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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
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31. 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)
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32. 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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33. Thank you for your attention.
Excellence in Cost Engineering
www.acoste.org
The Association of Cost Engineers
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