This document appears to be a cost estimate and risk analysis for an EPC contract for the Weddell Unit 3 power and water project in Australia. It includes a breakdown of direct and indirect costs, contingencies, and allowances for items like escalation, wet weather, and miscellaneous costs. The traditional approach to estimating, scheduling, and risk assessment is discussed, with a note that an integrated system using tools like WBS, estimating, time, cost, and risk management could help improve confidence in project outcomes.
Integrated Operations for Oil & Gas Industry using a Project Management Office concept to simplify work processes & data management by Harjono Zainal Abidin, Syed Mohd Alwi & Ramly Khairuddin - Subject Matter Experts at MESINIAGA Bhd - Presented at SPE Applied Technology Workshop 27 March 2012.
Assessment of Risks in International EPC Projects Reference Current Global Ec...HIMADRI BANERJI
Assessment of Risks in the present global economic environment for projects and especially projects that deal with EPC contracting for large scale infrastructure. A review of some of the major projects that have changed the rues of the game for Project Risk Assessment, management and mitigation forms a significant part of the prentation
EPC Contracts – Negotiation, Administration and Risk Managementrockporshe
EPC Contracts: Design, Procurement and Construction Risk Management is a two-day practical course that introduces participants to EPC Contracts, explains how they can be effectively negotiated, and how risks associated with them can be managed. Effective EPC
contract negotiation, risk management and administration can ensure project success, speed of performance, and reduce risks and costs throughout the project’s life cycle.
This course explores vital issues on EPC contracts from the perspective of both the project owner and the contractor.
Integrated Operations for Oil & Gas Industry using a Project Management Office concept to simplify work processes & data management by Harjono Zainal Abidin, Syed Mohd Alwi & Ramly Khairuddin - Subject Matter Experts at MESINIAGA Bhd - Presented at SPE Applied Technology Workshop 27 March 2012.
Assessment of Risks in International EPC Projects Reference Current Global Ec...HIMADRI BANERJI
Assessment of Risks in the present global economic environment for projects and especially projects that deal with EPC contracting for large scale infrastructure. A review of some of the major projects that have changed the rues of the game for Project Risk Assessment, management and mitigation forms a significant part of the prentation
EPC Contracts – Negotiation, Administration and Risk Managementrockporshe
EPC Contracts: Design, Procurement and Construction Risk Management is a two-day practical course that introduces participants to EPC Contracts, explains how they can be effectively negotiated, and how risks associated with them can be managed. Effective EPC
contract negotiation, risk management and administration can ensure project success, speed of performance, and reduce risks and costs throughout the project’s life cycle.
This course explores vital issues on EPC contracts from the perspective of both the project owner and the contractor.
Indian EPC companies really needs rise their bar in execution of EPC projects ,there is substantial risk involved in those projects, needs rise the bar in design , procurement ,safety and integrated project management to successful completion of the project.
Power point presentation on "CMRL UNDER GROUND STATION CONSTRUCTION WORKS" Risks faced and mitigation measures and new risks and their mitigations by adopting innovative construction methods .LARSEN &TOUBRO is pioneer in risk methodology and its mitigations in its construction works. It's great honour for me as L&T employ associated with Risk mitigation team in CMRL package.
Project cost management ,cost estimation cost control and evm for large epc projects and is essential for knowing the cost parameters for all construction engineers.
Businesses and governments face many political risks. Understanding of these risks helps in managing them in a better way. http://i-strategic.com/ highlights some of the most common political risks.
Risk Assessment, Mitigation And Management In Epc Projects With Case Study By...HIMADRI BANERJI
Risk Assessment, Analysis, Mitigation and Management of EPC is therefore, of prime importance today especially with newer risks thrown open by the global economic meltdown related risks, risk related liabilities for performance are allocated to the EPC contractor, with instruments as Liquidated Damages, Extended Guarantees, Latent Defect Liabilities etc.
Effective claims management has become a sophisticated process and one that draws upon numerous areas of expertise including data analysis, accident investigation, managed care, return to work, subrogation, alternative dispute resolution, structured settlements, and Medicare compliance as well as more traditional areas of claims expertise. Technology is continually evolving allowing the risk manager improved decision-making capabilities. Strong claims management fundamentals can apply to any major line of coverage including general liability, workers’ compensation, and auto liability. This session will explore how to identify key cost drivers, ways to better integrate claims resources, how to achieve faster reporting, the use of performance standards and guarantees, and how to evaluate the quality of your current claims services.
The presentation will discuss the fundamentals of the schedule cost risk integration concept and its applications for major projects. It will also review the implementation in a tunnel case study.
Overview of issues associated with Coal Processing by Industry ProfessionalsIQPC Australia
This presentation is a collation of three industry professionals sharing their thoughts in regards to major issues facing the Coal Mining Industry in Australia.
Indian EPC companies really needs rise their bar in execution of EPC projects ,there is substantial risk involved in those projects, needs rise the bar in design , procurement ,safety and integrated project management to successful completion of the project.
Power point presentation on "CMRL UNDER GROUND STATION CONSTRUCTION WORKS" Risks faced and mitigation measures and new risks and their mitigations by adopting innovative construction methods .LARSEN &TOUBRO is pioneer in risk methodology and its mitigations in its construction works. It's great honour for me as L&T employ associated with Risk mitigation team in CMRL package.
Project cost management ,cost estimation cost control and evm for large epc projects and is essential for knowing the cost parameters for all construction engineers.
Businesses and governments face many political risks. Understanding of these risks helps in managing them in a better way. http://i-strategic.com/ highlights some of the most common political risks.
Risk Assessment, Mitigation And Management In Epc Projects With Case Study By...HIMADRI BANERJI
Risk Assessment, Analysis, Mitigation and Management of EPC is therefore, of prime importance today especially with newer risks thrown open by the global economic meltdown related risks, risk related liabilities for performance are allocated to the EPC contractor, with instruments as Liquidated Damages, Extended Guarantees, Latent Defect Liabilities etc.
Effective claims management has become a sophisticated process and one that draws upon numerous areas of expertise including data analysis, accident investigation, managed care, return to work, subrogation, alternative dispute resolution, structured settlements, and Medicare compliance as well as more traditional areas of claims expertise. Technology is continually evolving allowing the risk manager improved decision-making capabilities. Strong claims management fundamentals can apply to any major line of coverage including general liability, workers’ compensation, and auto liability. This session will explore how to identify key cost drivers, ways to better integrate claims resources, how to achieve faster reporting, the use of performance standards and guarantees, and how to evaluate the quality of your current claims services.
The presentation will discuss the fundamentals of the schedule cost risk integration concept and its applications for major projects. It will also review the implementation in a tunnel case study.
Overview of issues associated with Coal Processing by Industry ProfessionalsIQPC Australia
This presentation is a collation of three industry professionals sharing their thoughts in regards to major issues facing the Coal Mining Industry in Australia.
Trade-off Analysis in a Project EnvironmentWhen we try .docxturveycharlyn
Trade-off Analysis in a
Project Environment
“When we try to pick out anything by itself,
we find it hitched to everything else in the
universe.”—MUIR’S LAW
715
Related Case Studies Related Workbook Exercises (from PMBOK® Guide, 4th
(from Kerzner/Project Kerzner/Project Management Edition, Reference
Management Case Studies, Workbook and PMP®/CAPM® Exam Section for the PMP®
3rd Edition) Study Guide, 10th Edition) Certification Exam
None • Multiple Choice Exam • Integration
• Management
• Procurement
• Management
• Scope
• Management
16.0 INTRODUCTION
Successful project management is both an art and a science and attempts
to control corporate resources within the constraints of time, cost, and
performance. Most projects are unique, one-of-kind activities for which
there may not have been reasonable standards for forward planning. As a result, the project manager may
find it extremely difficult to stay within the time–cost–performance triangle of Figure 16–1.
The time–cost–performance triangle is the “magic combination” that is continuously pursued by the
project manager throughout the life cycle of the project. If the project were to flow smoothly, according to
plan, there might not be a need for trade-off analysis. Unfortunately, this rarely happens.
PMBOK® Guide, 4th Edition
Triple-Constraint Definition
16
c16.qxd 1/19/09 4:17 PM Page 715
Trade-offs are illustrated in Figure 16–2, where the �s represent deviations from the original estimates.
The time and cost deviations are normally overruns, whereas the performance error will be an underrun.
No two projects are exactly alike, and trade-off analysis will be an ongoing effort throughout the life of the
project, continuously influenced by both the internal and the external environment. Experienced project
managers have predetermined trade-offs in reserve, recognizing that trade-offs are part of a continuous
thought process.
Trade-offs are always based on the constraints of the project. Table 16–1 illustrates the types of
constraints commonly imposed. Situations A and B are the typical trade-offs encountered in project man-
agement. For example, situation A-3 portrays most research and development projects. The performance
of an R&D project is usually well defined, and it is cost and time that may be allowed to go beyond bud-
get and schedule. The determination of what to sacrifice is based on the available alternatives. If there are
no alternatives to the product being developed and the potential usage is great, then cost and time are the
trade-offs.
Most capital equipment projects would fall into situation A-1 or B-2, where time is of the essence. The
sooner the piece of equipment gets into production, the sooner the return of investment can be realized.
Often there are performance constraints that determine the profit potential of the project. If the project
potential is determined to be great, cost will be the slippage factor, as in situation B-2.
Non–process-type eq ...
“Achieving Mine to Market Throughput” – Iluka South West Operations – Case...Robert Bolton
A case study in how to connect people and processes to deliver product and customer value, plus material and information flow.
A holistic approach to improving flow in a complex mineral sand operation - Iluka South West Operations
Robert is pioneer of the ToC approach in mining, oil and gas, capital infrastructure and financial markets. He has developed and implemented the Theory of Constraints (TOC) concepts in mining and resources capital planning and business execution business systems.
This case study is the turnaround story at the Iluka South West operations in Capel WA. This operation is large and complex operation with 4 separate mining operations feeding a large process plant with many dependent process and common resources.
The Throughput Focused Mining (TFM) approach improved the planning and execution processes to improve the product flow and operation performance. This turnaround was rapid. This operation achieved record production rates. Operational revenue increased significantly.
The additional operating capacity released due to the “Mine to Market” initiative, led to the stopping of a significant capital project. This capital project was to increase operating capacity.
The Theory of Constraints (ToC) concepts, simulations models and education tools, were key element s of this business system solution. Short-term planning and new scheduling methods was an element of this “Mine to Market” approach. This combined with collaboration in the form of weekly meeting, scheduling tools, common terminology and various discussion groups across the business teams, enabled the business transformation to be rapid and sustaining.
Lng markets a canadian contactors perspective john j. jeffersJohn Jeffers
a Canadian contractors perspective of the Global LNG Markets December 2014
Delivered to a LNG Conference in Norway organised and sponsored by DNB & the Canadian Embassy
For more information contact: Slideshare@marcusevans.com.
Integrated Asset Management: How Well Are You Using Best Practices in Your Supply Chain and Maintenance Operations? Presentation by Nicholas Seiersen, Corporate Supply Chain Manager, KGHM International at the marcus evans Global Mining Summit 2014 held in Las Vegas, NV
Risk Management & Contingency Guideline Training WorkshopPedram Danesh-Mand
Through real case studies and by training the key elements of new Contingency Guideline released by Risk Engineering Society (RES), this highly-interactive workshop will enhance your project risk management skills enabling you to:
Understand an integrated approach to schedule, cost and risk to assess and manage optimum contingency
Understand quantitative risk analysis methodologies and common sources of risks in major engineering projects
Obtain a good knowledge of quantification of project estimate uncertainties, schedules, allowances and their confidence level
Learn about accurate assessment, allocation and management of optimum and competitive contingency (both time and cost) for desired confidence level
Assess certainty for having a competitive bid and a successful project
Hear about some lessons learned in practical applications of RES Contingency Guideline in few recent major projects across Australia.
RES Risk 2016 Conference brochure - 18-20 May 2016, SydneyPedram Danesh-Mand
Organised and managed by lead industry practitioners and academia, the national RISK 2016 Conference is the only conference of its kind balancing practical case studies, comprehensive options, future educational topics as well as high level strategic risk management applications and implementation.
Planning, Risks and Delays - Risks, Rewards and Relationships Workshop 03-Dec...Pedram Danesh-Mand
DibbsBarker and Aquenta Consulting present a one-day seminar which will outline best practice project planning, proper administration of construction contracts and the consequences of not meeting scheduling and risk management obligations. We will provide you with an overview of project planning standards, float and time contingency analysis, EOT claims management and the critical interface between effective project planning, schedule risk analysis and successful acceleration, disruption and delay cost claims.
Effective Contingency Management - Contractor Management Forum - PD July 2013Pedram Danesh-Mand
Effective Contingency Management
• Good practice of project contingency assessment
• Risk driven methodology vs. traditional methodology
• Integrated Project Controls
• Joint Confidence Level (JCL)
• Good practice of project contingency management
GOING BEYOND THE TRADITION OF RISK MITIGATION, WE PROVIDE RISK AND OPPORTUNITY PORTFOLIO OPTIMISATION WHICH SEIZES OPPORTUNITIES TO DETERMINE AN ENTERPRISE’S APPETITE AND CAPACITY FOR RISK - AND CAPITALISES ON THE REWARDS.
Monte Calrimulation and Inclement Weather Risk AssessmentPedram Danesh-Mand
Delays due to inclement weather conditions within construction projects are generally planned for. Up until now, Deterministic Analysis has been the most common methodology used to determine the extent of the problem for construction projects. However it is the lack of risk consideration inherent in Deterministic Analysis that creates the opportunity for improving executive decision making by applying Probabilistic Analysis through quantitative risk analysis and different techniques like Monte Carlo Simulation (MCS).
This caste study review outlines the application of MCS to generate a distribution of the likely of inclement weather for a road construction project in Ballina, north of NSW, Australia. The paper also examines the application of MCS methodology for project programming, the advantages and challenges, and provides practical guidance for a probabilistic analysis with the application of MCS for managing the high risk of rainfall and optimizing the float at the activity level and the project level.
Cost Risk Analysis (CRA) by Pedram Daneshmand 19-Jan-2011Pedram Danesh-Mand
As a quantitative risk analysis tool, Cost Risk Analysis enables stakeholders to identify and quantify the project risks and opportunities and, through comparative analysis of possible scenarios, to develop project programmes and budgets with a more level of confidence.
Schedule Risk Analysis (SRA) by Pedram Daneshmand 14-Jan-2011Pedram Danesh-Mand
As a quantitative risk analysis tool, Schedule Risk Analysis enables stakeholders to identify and quantify the project risks and opportunities and, through comparative analysis of possible scenarios, to develop project programmes and budgets with a more level of confidence.
Schedule Risk Analysis (SRA) by Pedram Daneshmand 14-Jan-2011
Assessing EPC Contract Risk by using integrated systems
1. Project Management: Mining, Oil & Gas
10-12 July 2012, Stamford Plaza Brisbane
Pedram Danesh-Mand, Head of Planning & Risk – UGL
2. Assessing EPC Contract Risk by using integrated systems
Pedram Danesh-Mand, Head of Planning & Risk – UGL
pedram.daneshmand@ugllimited.com
3. Important Notice
The presenter does NOT speak on behalf of UGL, or act as representative of UGL. The views
expressed on this presentation and any oral presentation accompanying it, are the
speaker’s own personal and perspective opinions and are not those of UGL.
3
4. Agenda
• Brief introduction
• Industry performance worldwide
• Currently industry trends
• Success factors in Major Projects
• Project Cost Management (PCM)
• “Risk Driver” Methodology vs Traditional Approach
• Improving Confidence Level by using integrated systems
– Estimating
– Work Breakdown Structure (WBS)
– Time
– Cost
– Risk
• Case Studies
4
5. About UGL
• UGL Limited is a global leader in engineering, property services and asset
management and maintenance services through three business units:
– Engineering
– Operations & Maintenance
– Property
• UGL provides services to its Clients across the power, water, rail, resources,
property, transport, infrastructure and defence sectors.
• Headquartered in Sydney, Australia, UGL operates worldwide across 45 countries
employing approximately 55,000 people.
5
6. Project Delivery – Myths
• We have a good project management system in place, don’t worry!
• Trust our very experienced team. Everything’s fine!
• No problem, everything is under control!
• No worries, we have used these databases for years of experience!
• Please, we don’t need anything new!
• Another new system, another tool, again!
o.k., FINE!
But let’s have a look in the
performance of some major projects
worldwide, shall we?
6
7. Project Delivery – Facts
Engineering Projects Oil and Gas Projects
42% behind schedule 81% behind schedule
Ref: Managing the Risk of Delayed Completion in the 21st Century, Survey by Chartered Institute of Building (CIOB), 2007 7
8. Project Delivery – Facts
High-rise Buildings Power Generation Projects
67% behind schedule 66% behind schedule
Ref: Managing the Risk of Delayed Completion in the 21st Century, Survey by Chartered Institute of Building (CIOB), 2007 8
10. Current Industry Trends
• Increasing demand for efficient and technologically complex solutions in shorter
timescales and within tighter financial constraints;
• High demand for an accurate completion date, as required by many commercial
and public benefit projects;
• A growing trend for employers to require the contractor to take more of the risk that
is traditionally taken by the employer;
• A growth in the use of Design & Build (D&B), Guaranteed Maximum Price (GMP)
and Engineer Procure and Construct Contracts (EPC); and
• Potentially devastating consequences of the failure to manage time in construction
projects.
O.K.
To identify the success factors, we
need to understand why projects fail!
Ref: Managing the Risk of Delayed Completion in the 21st Century, Survey by Chartered Institute of Building (CIOB), 2007 10
11. Top 5 causes of failure
• REQUIREMENTS: Unclear, lack of agreement, lack of priority, contradictory,
ambiguous, imprecise
• RESOURCES: Lack of resources, resource conflicts, turnover of key resources,
poor planning
• SCHEDULES: Too tight, unrealistic, overly optimistic
• PLANNING: Based on insufficient data, missing items, insufficient details, poor
estimate
• RISKS & OPPORTUNITIES: Unidentified or assumed, not managed
Ref: Strategies for Project Recovery,
A PM Solutions Research Report,
pmsolutions survey, 2011
11
12. Traditional Approach
EPC Contract
Estimating Scheduling R&O’s
PROJECT INFORM AT ION M on day, 16 Jan uary 2012 % o f C os t % o f Sell V A LUE RE O
C VERY
TENDER NO: T C-3218 Tot al m an Hou rs Man Hours
PROJE T T
C ITLE: Wed de ll Uni t 3 C il
iv 3,364
CONSULT A N /C E
T LI NT: Pow er & W ater C orp or ati on , NT M ec h 11, 854
POST TENDER NEGOT A T ON D T :
I I A E 16-Jan -12 Elec t 6,164
CONSTRUCT ON PR
I OGRAMME DURATI N (Weeks)
O 34 8 Months Mann ing A verage Peak
CONSTRUCT ON SI E D
I T UR T
A ION (Weeks) 34 8 Months C il
iv 10 16
DEF CT
E S LIABI TY PE
LI RI D (Weeks )
O 104 24 Months Mec h 28 45
REVISI N A N
O D ISSUE RE A0-1
V Elec t 17 28
Value R co ver y
e
(1-4) T O AL DIR
T ECT JOB COST S ( ite m s 1- 4) T O AL COST DJC (it em s 1-5)
T 51. 17% 44. 85% $6,338,802.81
( 1) PROJECT E E
L MENTS, DIRECT C OSTS To tal for s ect ion (1) 40. 79% 35. 75% $5,053,352.81
1.1 Civil Works Input f rom File 07-Jun-11 9. 13% 8. 00% $1,131,041.30
1.2 Mec hanic al Input f rom File 30- May-11 18. 16% 15. 92% $2,249,906.72
1.3 Elec tric al Input f rom File 01-Jun-11 12. 79% 11. 21% $1,584,404.79
1.4 Rec ruit ment
1.4 Final Negotiation f igure generally f or w et w eat her increase 0. 71% 0. 62% $88,000.00
1.5 File
( 2) ENGINEERING (Ref er SHT- 2) To tal for s ect ion (2) 8. 12% 7. 12% $1,005,350.00
2.1 UGL Engineering Engineering 09- May-11 7. 62% 6. 68% $943,522.00
2.2 Geotec hnical Report & O&M Manuals 09- May-11 0. 50% 0. 44% $61,828.00
( 3) Gen er al Spe ci ficatio n R qui rem e nts
e ( R fer SHT- 3)
e To tal for s ect ion (3) 0. 81% 0. 71% $100,100.00
3.1 Preliminar y Cost s UG Li Prelims File 0. 81% 0. 71% $100,100.00
3.2 Preliminar y Cost s other File
( 4) COM M ISSIONING (R fe r SH -4)
e T To tal for s ect ion (4) 1. 45% 1. 27% $180,000.00
4.1 Comm sioning c os ts U
is GLi A dmin Inc luded in A dmin below
4.2 Comm sioning Mat erials
is Comiss ioning F ile 1. 45% 1. 27% $180,000.00
4.3 Comm sioning c os ts other
is F ile
(5-9) T O AL IND
T IRE T JOB C O
C STS (it em s 5-9) T O AL COST IND R C TS (i tem s 5- 9)
T I E 42. 79% 37. 49% $5,302,192.18
( 5) ADM INIST R TI O
A N (Ref er SHT-5) To tal for s ect ion (6) 28. 90% 25. 33% $3,580,535.30
5.1 Site Adm in and Site Supervision Cost s A dmin 10. 92% 9. 57% $1,352,868.94
5.2 Site Engineer ing and Site Support Staf f A dmin 7. 44% 6. 52% $921,581.16
5.3 Site Com miss ioning labour Cost s A dmin 7. 71% 6. 76% $955,220.13
5.4 Head Of f ice Support A dmin 2. 44% 2. 14% $302,654.86
5.5 Other admin cos ts Rec rui tment Cos ts 0. 39% 0. 34% $48,210.20
( 6) M OBIL ISA TI ON Plan t & B ild ing s (R fe r SH -6)
u e T To tal for s ect ion (7) 12. 75% 11. 16% $1,579,350.00
6.1 ( 7a) MO BI SATI
LI ON & D EMOBILSA TION Mob & Demob 8. 04% 7. 05% $996,060.00
6.2 ( 7bi) SI E BUI
T LDINGS 0. 69% 0. 60% $85,010.00
6.3 ( 7bii) SI E CO
T NN CT
E IONS 1. 00% 0. 87% $123,550.00
6.4 ( 7biii) PLA N T AN D T OO LS 2. 09% 1. 83% $258,880.00
6.5 ( 7biv) VEH CLES
I 0. 23% 0. 20% $28,900.00
6.6 ( 7bv ) SI TE RU NN NG C
I OST S 0. 44% 0. 38% $54,150.00
6.6 Other - P inc ipal's Site O f ic e + U
r f tility Pow er & Water Connec tions ( PWC Mtg Darw in A ddition) 0. 26% 0. 23% $32,800.00
( 7) COMMUNITY & ENVI RONMENT ( R fer SHT- 7)
e Comm & Env To tal for s ect ion (8) 0. 09% 0. 08% $11,700.00
( 8) HE LT H & SAFE Y EQ
A T UIPM ENT (R fe r SH -8)
e T Health & Saf ety To tal for s ect ion (9) 1. 05% 0. 92% $130,606.88
H ed gi n g No t
( 9) HEDGING (re fe r to SH -9)
T BG & Hedge To tal for s ect ion (10)
C on s der ed
i
(10-13) T O AL A LL O
T WANCES (ite m s 10-13) T O AL COST A LL O
T WANC ES (ite m s 10-13) 4. 33% 3. 79% $535,918.23
(10) ESC AL AT ION ( ref er to SHT-10) Escalat ion To tal for s ect ion (11) $93,861.25
0. 76% 0. 66%
10.1 Esc allation f or Project Management and Super vis ion 0. 57% 0. 50% $70,900.00
10.2 Esc allation f or Engineering 0. 19% 0. 16% $22,961.25
10.3 Esc allation f or Labour (Not r eq' d - Mid Point calc)
10.4 Esc allation f or Materials ( Not req'd)
(11) C on tin ge ncy R&O To tal for s ect ion (12) 3. 07% 2. 69% $379,643.29
(12) We t Weathe r A llo w ance (R fer to SHT- 12)
e Wet Weather To tal for s ect ion (13) 0. 50% 0. 44% $62,413.69
12.1 CIVIL WET WE T
A HER ALLOWANCE 0. 20% 0. 18% $25,358.59
12.2 ELEC RI
T CAL WET WEATH R A LLOWANC
E E 0. 08% 0. 07% $10,323.82
12.3 MECH N CAL WE
A I T WEATHER A LLOWA NCE 0. 15% 0. 13% $18,006.91
12.4 SUPERVISI N WE
O T WE T ER ALLO
A H WA NCE 0. 07% 0. 06% $8,724.38
12.5 OTHER WE T WEATHER A LLOWANCE
(13) PROVI SION L SUMS
A To tal for s ect ion (14)
(14) M ISC C OST S ( LSL , BONDS, INSUR N E
A C S E C)
T T O AL COST M ISC I TE
T M ( 14) 1. 69% 1. 49% $209,427.60
Liability Char ges "U" unc apped Liability ( 1% ), "A" Cont rac t sum Liabilit y (. 5% ) "B 5 of
".
14.1 c ontrac t s um liabilit y ( .25%) A 0. 57% 0. 50% $70,160.00
14.2
14.3 Long Serv ice Levy (LSL) .35 % on c ontract v alue ( inc GST) 0.50% 0. 62% 0. 55% $77,176.00
14.4 Sec urit ies Bonds Insert Final Total Selling Price $14, 032,000 0. 22% 0. 19% $27,011.60
14.5 War ranty Provis ion .25 % on c ontract v alue ( inc GST) 0.25% 0. 28% 0. 25% $35,080.00
Insurances exc luding const ruc tion ris k / const ruc tion w orks "A " .45% of C , Including c onstr uct ion ris k /
V
14.6 c onstruct ion w orks "B .9% of CV ( W
" orn by Bus iness )
14.7 Other c os ts
T O AL C O
T ST ( ite m s 1- 14) PROJE T TOTA L C OST ITEM S 1 TO 14
C 100% 87. 62% $12,386,340.82
(15) OVER H
- EADS & M arg in (it em 15) 12.00% T O AL O H and M arg in IT E
T - M (15) 12. 35% $1,745,046.48
15.1 UGLi Overheads 54.17% 6.50% o f Sell ing Mark up 7. 39% 6. 47% $914,900.17 $914, 900.17
15.2 UGLi Prof it 45.83% 5.50% o f Sell ing Mark up 6. 25% 5. 48% $774,146.30 $774, 146.30
15.3 A dditional Recover y FX Rate 0. 45% 0. 40% $56,000.00 $56, 000.00
15.4 Mark up
15.5 Part ner 3 Prof it & O/H Mark up
(16) T O AL SE
T LL ING ( ite m s 1-15) (16) TOTA L SE LI N
L G PRIC E EXC LUDING GST 100% $14,131,387.30 $1,745, 046.48
GST Valu e $1,413,138.73
PRI E APP
C ROVED BY : DATE : 16-Jan- 12 RECOVERY TO COST : 14.09%
Tender No : TC-3218 Estimator :GRG / RS RECOVERY TO SELLING : 12.35%
12
16. PCM – Process
• Cost Estimating – developing an approximation of the costs of the resources
needed to complete project activities.
• Cost Budgeting – aggregating the estimated costs of individual activities or work
packages to establish a cost baseline.
• Cost Control – influencing the factors that create cost variances and controlling
changes to the project budget.
16
17. PCM – Inputs
• The INPUTS into the Cost Estimating are:
– Available organisational process assets
– Available quantities, resources and productivity rates
– Available work/scope statements
– Work Breakdown Structure (WBS), and
– Other assumptions/documents e.g. PMP, etc.
All these assumptions add
UNCERTAINTIES which reduce the
cost confidence level.
What about other R&O’s and events?
17
18. PCM – Outputs
• The OUTPUTS of the Cost Estimating process are:
– (Deterministic) Activity Cost Estimate
– (Deterministic) Total Project Cost
– (Deterministic) Cost Model Data
– (Deterministic) Cost Baseline
– (Deterministic) Resource Requirements
How CONFIDENT are you in such a
deterministic cost estimate?
18
19. Scope, Cost, Time, & Risk
COST
TIME
RISK
Schedule Cost Risk Integration
19
20. Schedule/Cost/Risk Integration Overview
• Available data gathering and validation
• Schedule and Cost Estimate Development
• Risks & Opportunities Workshop/s (team approach)
• S/C/R Integration
– R&O Register incl. both Uncertainties and Events
– Schedule Cost Risk Model
– Simulation
• Results and Discussions
• Re-Modelling
• Monitoring & Controls
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21. S/C/R Integration Validation
How to review the deterministic Schedule & Cost?
• Validation of
– Quantities (most likely)
– Productivity Rates (most likely)
– Durations (most likely)
– Resource Cost Rates (most likely)
• Constraints (Contractual or Management)
• Logic network and Work Statements, and
• Reasonable Critical Path
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22. S/C/R Integration – R&O Register
• The elements of the R&O Register:
– The identified risks & opportunities
– Likelihood of the identified risks and opportunities
– Impacted activities and/or cost elements
– Schedule and/or Cost Impact/s
– Schedule and/or Cost Variations
– Correlation of risks and opportunities to one another
– Notes, etc.
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23. S/C/R Integration – Simulation
• The S/C/R Model should be simulated with multiple scenarios of the project using
random samplings of the relevant risks and opportunities considering their
probability and impact.
• Two popular methods:
– Monte Carlo Simulation (MCS) – faster method but has a larger
possibility of sampling error
– Latin Hypercube Sampling (LHS) – slower method but less
sampling errors
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24. Case Study 1 – Tender Estimate
• Project: Harbour Deepening & Berth Works
• Multi-million Joint Venture Contract
• Scope:
– Demolish existing wharf
– Cutting up concrete
– Removing deck
– 231 sheet Piles
– 230 piles
– New structure
– Rails, fenders, …
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28. Case Study 1 – Cost Confidence Levels
Original estimated Direct Construction Cost: $18,285,626
Recommended Direct Const Cost (50% likelihood) = $20,530,588
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29. Case Study 1 – Probability Density
Confidential
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30. Case Study 1 – Sensitivity Analysis
Confidential
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34. What is NEXT?
PLAN, ACT, REVIEW AND PRACTICE THE RISK DRIVEN APPROACH IN YOUR PROJECTS.
AND ALWAYS REMEMBER
IF WE FAIL TO PLAN, WE ARE PLANNING TO FAIL!!!
Good Luck.
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35. Important Notice
This presentation and any oral presentation accompanying it:
• is not an offer, invitation, inducement or recommendation to purchase or subscribe for any securities in UGL Limited (“UGL”) or to retain any securities currently
held;
• is for information purposes only, is in summary form and does not purport to be complete;
• is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or
needs of any particular investor, potential investor or any other person. Such persons should consider seeking independent financial advice depending on their
specific investment objectives, financial situation or needs when deciding if an investment is appropriate or varying any investment;
• may contain forward looking statements. Any forward looking statements are not guarantees of future performance. Any forward looking statements have been
prepared on the basis of a number of assumptions which may prove to be incorrect or involve known and unknown risks, uncertainties and other factors, many
of which are beyond the control of UGL, which may cause actual results, performance or achievements to differ materially from those expressed or implied in
such statements. There can be no assurance that actual outcomes will not differ materially from these statements. Any forward looking statement reflects views
held only as of the date of this presentation. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, UGL does not
undertake any obligation to publicly update or revise any of the forward looking statements or any change in events, conditions or circumstances on which any
such statement is based.
• No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions
contained in this presentation and any oral presentation accompanying it. To the maximum extent permitted by law, UGL and its related bodies corporate, and
their respective directors, officers, employees, agents and advisers, disclaim and exclude all liability (including, without limitation, any liability arising from fault or
negligence) for any loss, damage, claim, demand, cost and expense of whatever nature arising in any way out of or in connection with this presentation and any
oral presentation accompanying it, including any error or omission therefrom, or otherwise arising in connection with any reliance by any person on any part of
this presentation and any oral presentation accompanying it.
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