Sooner or later any professional in construction will be tasked with completing a construction project in a time frame that will require every skill and technique known to the company. The skill, known as “compressing” will include not only considering Impact and Acceleration and its effect on the project, but will require consideration of the various additional techniques described below. While this list is not exhaustive, it does include many of the “tricks of the trade” our more successful clients have utilized to achieve remarkably fast turnover in industrial and power projects.
DURING THE PROJECT
1. Multiple-prime Contracts
Owners often chose to adopt a multi-prime contracting approach in an effort to reduce time and cost. If experienced and qualified management personnel are involved, the owner can assume the role of a general contractor and enter into competitive bid, lump-sum prime contracts with key contractors. This approach can increase bidding competitiveness and allow fast-tracking while retaining lump-sum competitive bids, but it also demands effective coordination, scheduling and job management. If these prime contracts will require a substantial amount of subcontracts, management should confirm that the prime contractor has had success managing both its own direct labor force and that of subcontractors.
2. Limit Time and Material Work
Trade contractors can become complacent when working under Time and Materials (T&M) and cost reimbursable contracts. Recent examples include contractors’ failure to implement labor productivity measurement and management systems under these types of contracts versus fixed price contracts. Therefore, management should plan to limit T&M to a single digit percentage of total construction cost. However, in order to pursue a fast-track job under this approach, management should establish a well-defined contract scope and involve multiple-prime contractors. Acquiring meaningful contractor constructability input under this approach may require creative negotiations and contract terms. See our article on Change Orders for the usual dangers faced in such a situation. In addition, limiting T&M work and overtime may be inconsistent with acquiring craft personnel in tight labor markets.
3. Packaged Units
Pre-packaged vendor units, such as gas turbine generator sets, can have the effect of maximizing shop fabrication, reducing field labor man-hours, shortening the overall project schedule and reducing risks associated with system start-up. While these packaged units tend to be at the low end of the MW output scale, the trend is toward increasing their power production. Generally, with packaged units, deviations from the standard design should be avoided. The owner can start with the vendor-developed standard turbine package and then critically scrutinize all suggested modifications or enhancements, recognizing that significant time and money can be saved if re-engineering efforts can be avoided.
4. Restrictive Specifications
Whenever possible, try to use the manufacturer's standard designs and minimize customization and excessively restrictive specifications. Specs should not be "gold-plated" or require an excessive product life cycle. This approach should minimize unnecessary follow-on conformance negotiation efforts and reduce the inventory of spare parts. A pre-selected list of acceptable vendors and components for all major components should also help in accelerating the procurement process.
5. Vendor Schedule Performance
Employing thorough investigations and evaluations, management should keep records on contractor’s and vendor’s past project schedule performance and make use of this information in pre-qualification and selection process. Ask vendors for reliable indicators of shop capacities and current and planned workloads, as these can significantly affect future production and deliveries.
6. Fabrication Sequence
Rather than employing the traditional and less costly approach of fabricating similar steel shapes and pipe sizes in groups from large to small, contract for and require fabricators to fabricate strictly by erection sequence and job schedule. Associated piping and fittings or columns, beams, diagonals, angles, and plates should be fabricated before moving on to another pipeline or structure. Of course, milestone delivery dates should also follow the erection sequence dates. Any incentive/penalty dates should be based on delivery dates of inspected and accepted piping and steel.
7. Incentives, Penalties and Schedule Performance
Recognize plant investment economics in construction contracts and major vendor purchase orders by offering daily bonuses for early project completion. Use a similar value as the daily penalty for late completion. For this approach to work, however, project durations should be aggressive yet reasonable, and the owner's project management team should take a very active role in early project planning and problem-prevention. These issues should be thoroughly addressed in RFPs, contract documents, and training programs.
8. Delivery Dates of OFE
The owner can assume a fair allocation of risk and allow the contractors to plan and execute a tight project schedule by guaranteeing to the contractors the delivery dates for owner-furnished equipment. This, in-turn, should also help reduce the amount of the contractor price contingency.
9. Dedicated Expeditor
For critical pieces of equipment, and in order to minimize the time required for vendor drawing information, assign a dedicated expeditor who is fully knowledgeable of technical requirements, is authorized to establish priorities, and has full and direct access to vendors (particularly vendor management personnel). Issue a weekly expediting or material status report.
10. Monthly Meetings with Equipment Suppliers
Focus on the early identification of any potential delays and facilitate design reviews and field erection planning with monthly progress/status meetings with major equipment suppliers. Involve both engineering personnel and construction supervisors as appropriate.
11. Turnover Dates
Every contract and subcontract should include the current projected system turnover dates. This again emphasizes the importance of accurate and up-to-date project schedules and progress reports.
12. Tracking Craft Productivity
Whether under lump-sum or T&M contracts, prime contractors are advised to implement labor productivity management systems. In addition, the owner can assist in controlling project schedule risk and uncertainty by playing an active role in tracking contractor performance. For example, the owner can review the previous week’s productivity ratio (labor-hours earned/actual labor hours), and seek to identify the causes of performance variances, both good and bad.
13. Determining Percentage of Completion
Effective project control and accurate forecasting of final costs rely, in part, upon the accurate determination of percentage of completion. Management should take an active role in tracking contractor progress through the determination of percentage of completion, for both individual activities and the entire project. Establish a system for accurate and efficient estimation of percentage of physical completion. For example, for each discipline and work activity, formalize the significant progress milestones, assign meaningful weighting values, and thoroughly train personnel on system procedures.
Start the most difficult and time-consuming field activities as early as possible. If drawings are available, work such as equipment module construction and pipe spool fabrication should be started early to minimize future field congestion.
Be judicious in the use of premium-time labor hours. With full understanding of project schedule economics and the cost effects of overtime work, be prepared to authorize overtime only when beneficial. Make sure management capabilities and compensation packages are adequate for keeping the trades motivated and productive. Having said this, recognize that projects with 50-hour (or more) work-weeks are often considered to be more appealing to the crafts than those working 40-hour work-weeks. Review our article on Hidden Change Orders to avoid defacto authorization of this type of work.
15. Multiple Shifts
Pay particular attention to the effectiveness of the daily management of transition between shifts. In strong organized labor regions, offer labor productivity incentives as the labor force is downsized. For large projects in strong union areas, for the last 10-15 percent of construction activity, consider establishing a financial incentive program for trades that factors in absenteeism, accident and injury incident rates, productivity rates and milestone achievement. Again, be sure to factor in Impact and Acceleration when making your bid.
SYSTEM TURNOVER PERIOD
1. Systems-based Schedules
Plan to transition from an area or discipline-based construction schedule to a systems-based schedule as early as possible to facilitate systems testing and start-up. Identify components by start-up system with a special designator on all drawings. For example, one of the first systems to be tested is the make-up water system; thus, every wire, cable, pump, pipe, valve, and motor control switch on this system will have a system identification number, facilitating the planning and execution of start-up.
2. Expedited Start-up Schedule
Owners often want to compress the start-up schedule as much as possible to minimize the time from construction completion to commercial operation. Benefits from this tactic can be significant, since daily financing costs during this period are typically high. Several HCG clients also emphasize the importance of tight owner control over start-up schedules, often dictating sequences and milestones.
Ensure that during start-up owner field personnel possess both adequate authority and capability. It is paramount that knowledgeable owner field personnel possess adequate authority to effectively direct the work during the start-up phase. The goal should be to avoid contractor delays waiting on owner decisions.
Although reduced project durations are often desirable, virtually every technique addressed in these articles comes with a price, some more expensive than others. Readers are encouraged to assess these schedule compression techniques within the needs of their respective organizations and projects, because most involve some form of tradeoff or investment in additional effort. A central issue, then, is whether or not the benefits of compressing the schedule exceed the associated cost. Thus, the implementation of schedule compression techniques should involve a corresponding cost/benefit analysis.
Nevertheless, the ability to compress the project, to deliver top quality work within a strict budget of both time and money is a skill that can lead to projects opening up that otherwise would be monopolized by others. It is a competitive advantage but the price to achieve it is dedication to developing remarkable skills…and, as one client told the author, the ability to sleep at nights when the slightest delay can unravel four months of intensely planned work.
“It’s the big leagues, “ he told me, “the place where we divide the men from the boys. Hey, you’re either bored and broke or terrified…and maybe rich. I like the latter.”
But, as the Boy Scouts say….BE PREPARED.