What are the Different ways of measuring the progress in EPC project

Dear Rizwan,

EPC contracts are usually large contracts. They are divided into zones or areas. And each area will have different teams or contractors in many disciplines. You will need a monitoring tool to measure the total amount of works. This can be very simple or very complicated depending on the management team.

As a basic step, you must have initial milestones for each area or activity. If these are not contactual dates, then you must specify them with your Construction team. Subsequently, you can move forward to more details as more activities open up and you will need tens of people to report to you on daily basis the ongoing activities at site.

Hope this gives you a basic idea about what is needed.

With kind regards,

Samer

Rizwan,

There are numerous ways to track progress on EPC projects. I prefer Earned Value. Below are some tips:

Engineering phase:

Earned Value (using engineering manhours converted to £ based on a typical hourly rate).

-Each design deliverable should be assigned a budget.

-Rather than trying to track physical percent complete on something as ephemeral as a design deliverable, use agreed status weightings. –e.g. if a deliverable has started = 10% complete, if it has been issued for comment =50%, if it has been issued for construction = 100%

Supplementary progress measures

-# deliverables issued for construction vs planned (monthly & cumulative)

-Top 5 most critical deliverables status vs planned each week

-ave duration to issued for comment stage vs planned (monthly & cumulative)

-ave duration from issued for comment to issued for construction vs planned (monthly & cumulative)

Procurement phase:

Earned Value (using combination of procurement manhours converted to £, plus budget £ for the procurement package)

-Each procurement package should be assigned a capital budget, plus a procurement labour budget (the latter could be averaged out across the total number of packages, or weighted average based on capital budget)

-Create a fragnet of activities for each procurement package to include as a minimum: Issue tender docs, tender returns, tender analysis, negotiations, place order, vendor design, vendor design approval, manufacture & delivery

-Spread the procurement labour budget across issue tender, tender assessment, negotiations & place order –weighted by duration

-For supply-only vendors, spread the procurement budget across vendor design (eg 5%), design approval (eg 10%), manufacture (eg 70%) and delivery (eg 15%)

-For subcontractors who will be installing & commissioning as well as supplying, you will need to adjust these percentages, and reserve some of the budget for the construction-phase activities

Supplementary progress measures

-# packages returned for tender vs plan (monthly & cumulative)

-# packages ordered vs plan (monthly & cumulative)

-top 5 most critical packages staus vs plan each week

-ave duration of tender returns vs plan (monthly & cumulative)

 -ave duration of tender assesments vs plan (monthly & cumulative)

-ave duration of negotiations & order placement vs plan (monthly & cumulative)

Construction phase:

Earned Value

-standard earned value techniques for siteworks

-EPC projects will often be quite large and complex. There is value in reporting earned value at lower levels. eg by discipline, trade, work area etc, to enable management to drill down and focus on problem areas

Cheers,

G