Project Development Decision Tree

1
Project Development Decision Tree
Permitting
In-house Reqmts.
Energy Sales
Fuel Consumption
Schedule Constraints
Plant Configuration
Risk Assessment
Capital Costs
Project Revenue
Project Financing
Control, Flexibility Reqmts.
Cost and Schedule Risk
Project Delivery System
Quality and Cost Mgmt.
Coordinated Agreements
Risk and Interface Mgmt.
Time Phased Progress
2
Owners Basic Project Management Functions
Development
Delivery
Comm. Ops.

• Permitting and Reg. Compliance
• Fuel Energy Agreements
• Utility Coordination Interfaces
• Financing Draw Certifications
• Contractor Progress Payments
• Submittals Design Review
• Project Risk Mgmt.
• Existing Facility Interface Coord.
• Contract Change Orders Claims
• Coord. Owners Suppliers, Contractors
• OM Training Documents
• Purchase Consumables, Spares, Tools
• Project Counsel Interface

3
Project Delivery Contract Framework EPC
Owner
Engineering, Procurement Construction Contractor
Trade Subs
Material Suppliers
Basic Proj. Mgmt. Functions
Equip. Rentals
Specialty Subs
Service Providers
Equipment Suppliers
Field based Engrg. Support
Commissioning and Testing Services
Design Documents Production
Submittal Coordination

• Notes
• Owners flexibility and control during project
  delivery are limited by turnkey nature of EPC
  agreements offsetting contractors assumption of
  liability for timely and within-cost performance.
• Owners project management responsibilities are
  least among contracting options.
• Fixed price and schedule depend on fully
  developed equipment and design specifications,
  site and permitting data included in the contract
  documents.

4
Project Delivery Contract FrameworkDesign Bid
- Build
Owner
Architect / Engr
Constructor
Basic Proj. Mgmt. Functions Plus
Procurement, Engineering and Site Admin.
Trade Subs
Design Documents Production
Material Suppliers
Submittal Coordination
Equip. Rentals
Equipment Suppliers
Field based Engrg. Support
Specialty Subs
Commissioning and Testing Services
Service Providers

• Notes
• Owner assumes burden of coordination and
  liability for performance of both designer and
  builder.
• Owner preserves flexibility during design and
  equipment selection later engaging constructor,
  generally resulting in longer project schedule
  compared to EPC configuration.
• Owner logically takes on engineered equip.
  purchase and commissioning responsibilities, thus
  requiring robust technical and commercial team.
• Owner captures cost saving with reduced
  contractor risk and scope compared to EPC
  configuration.

5
Project Delivery Contract FrameworkDesign Build
Owner
Architect / Engr
Contractor
Basic Proj. Mgmt. Functions Plus Technical
Compliance Team
Submittal Coordination
Service Providers
Field based Engrg. Support
Trade Subs
Design Documents Production
Specialty Subs
Material Suppliers
Equip. Rentals
Equipment Suppliers
Commissioning and Testing Services

• Notes
• Shorter Schedule and contained cost depend on
  successful coordination between Contractor and
  its designer.
• Owner retains less control and risks design
  compromise in favor of Contractors interests.
• Owner may require more robust team depending on
  allocation of scope of supply and start-up work.

6
Project Delivery Contract Framework Multiple
Primes
Owner
Architect / Engr
Co-PrimeContractor
Co-PrimeContractor
Trade Subs
Equipment Suppliers
Design Documents Production
Specialty Subs
Service Providers
Submittal Coordination
Material Suppliers
Equip. Rentals
Field based Engrg. Support
Basic Proj. Mgmt. Functions Plus Robust Field
Mgmt. Team Plus Coord. Multiple Contractors
Commissioning and Testing Services

• Notes
• Robust field management team and precisely
  coordinated prime contracts ensure orderly
  progress by horizontal organization, mitigation
  of potential claims and project delays, and
  delivery of quality project to commercial
  operation.
• Owner control is maximized, and allocation of
  risk and scope is flexible.

7
Project Delivery Contract Framework Construction
Manager At Risk
Owner
Architect / Engr
Construction Mgr. At Risk
Basic Proj. Mgmt. Functions Plus
Procurement, Engineering and Site Admin.
Trade Subs
Design Documents Production
Material Suppliers
Equip. Rentals
Submittal Coordination
Equipment Suppliers
Specialty Subs
Field based Engrg. Support
Commissioning and Testing Services
Service Providers

• Notes
• Owner allocates construction work progress,
  payment and coordinaton responsibilities to C.M.
  At-Risk, but retains coordination of design
  documents, major equipment deliveries, and
  commissioning works.
• Owner is required to have less on-site presence
  than multiple-primes configuration, and maintains
  high degree of control and flexibility in all
  areas.
• Differing from Design-Bid-Build arrangement,
  Owner retains C.M. during design phase and
  benefits from continuity of his expertise
  throughout project completion.

8
Project Delivery Contract Framework Construction
Manager - Agent
Owner
Architect / Engr
Constructor
Constr. Mgr. Agent
Trade Subs
Basic Proj. Mgmt. Functions Plus
Procurement, Engineering and Site Admin.
Material Suppliers
Design Documents Production
Equip. Rentals
Submittal Coordination
Specialty Subs
Field based Engrg. Support
Equipment Suppliers
Service Providers
Commissioning and Testing Services

• Notes
• Owner retains contract risks of multiple-primes
  configuration and relies on C.M. Agent to
  coordinate design and supply logistics with
  construction requirements and constraints.
• Owner retains robust project team, flexibility
  and control over project operations.

9
Project Development Milestones PrecedingProject
Delivery Structure Formation
Capital Justification, Consolidation of Project
Objectives Strategy Decisions
Substantial completion desirable in all cases
Environmental Permit Applications
Substantial completion desirable in all cases
Energy Sales, Fuel Purchase, Water Supplies
Agreements
Substantial completion desirable in all cases
Site Plan, Geotech, U/G Utilities, Existing
As-Built Infrastructure Dwgs.
Substantial completion desirable in all cases
Preliminary Design Docs Cycles, Schematics,
Gen. Arrangements, Site Plan
Conceptualization complete
Equipment Specifications and Purchase Forms
Outline Technical and Commercial Forms
10
Preliminary Project Delivery Documentation
Development - 1

• Existing Site and Infrastructure Drawings
• Site plan, Grading and Drainage, Roads and
  Rights-of Way, Utility Tie-ins, U/G Obstructions
• Soil Survey and Geotech Report including sample
  borings
• As-built U/G Construction Drawings, facility
  tie-ins, raw water take-off, waste water discharge

• Preliminary Design Documents
• Water and Heat balance diagrams
• Power Distribution Schematics, HV, 15kv, 6kv
• Project Site Plan including grading and drainage,
  major equipment foundations, Building outlines,
  roads, and fuel storage yard
• Schematic Plant Control Outline and Existing
  Facility Interfaces
• Major Foundations Outline Plan including piling
  and U/G services
• Civil and Structural Specifications for concrete,
  Buildings, Foundations, Structural Steel,
  Fencing, Erosion Prevention,
• Electrical Specifications relating to utility
  ties, grounding,
• Major Equipment Specifications including boiler,
  turbine generator, step-up transformer, fuel
  conditioning, AQCS, distributive control system
• General Arrangement Drawing showing piping and
  raceway routing, access and laydown areas, major
  equipment location

11
Preliminary Project Delivery Documentation
Development - 2

• Project Contract Exhibits for each contractor,
  supplier and service provider
• Scope of Work
• Site Conditions
• Referenced Specifications and Third Party
  Agreements
• Site Safety Rules, Work Permits, Security
  Protocols
• Coordinated Insurance Requirements
• Forms of Lien waiver, performance/payment bonds,
  change orders, payment applications,
• Special Terms and Conditions

• Project Contract Outlines tailored to Owners
  business and risk strategy
• Capture Owners commercial management
  priorities preserving desired degrees of control,
  involvement, flexibility and Risk in project
  delivery process leading to commercial operation.
• Coordinate terms governing approvals, notices,
  reporting, technical transfer protocols flowing
  from other Owner Agreements with utilities,
  insurers, lenders, sureties, neighbors, and other
  parties of interest to the project
• Develop Precise Price and Payment terms ensuring
  reliable cost and cash flow controls
• Articulate and coordinate Owners preferred
  commercial approach to liability, insurance
  scheme, dispute resolution, choice of law,
  terminations, events of default and remedies,
  payment and performance bonding, confidentiality,
  warranties, among other key elements to be
  included in contract terms