An EPC contractor needed to know that their cost and schedule commitments could be met
A major contractor was in the process of developing plans for a new agricultural chemical facility on behalf of their client. Given the early stage of the project, their estimates were very preliminary. Contractor leaders wanted an independent party to validate the likely cost and duration of the project for their own good, and for the good of their client .
They were also eager to identify any potential cost optimization opportunities as the project approached FID in the coming months, as it would help ensure that the owner was happy and the project would move forward.
Westney provided a top-down view of the likely cost, schedule, and work-hours based on project quantities and historical unit rates
We leveraged our extensive database of projects to do an independent build-up of the project estimates for comparison with the contractor’s view, based on what we know to be the historically achievable unit rates for key accounts and typical project ratios.
Deliverables for this engagement included:
»A predictive range (P25 to P75) of the likely outcomes for end-of-project cost, schedule, and work-hours
»Detailed breakdown of major cost components for comparison with the contractor’s estimate
»Low, high, and expected ratios for quantities and productivity, based on experience with similar projects
»Identification of cost optimization opportunities and how they could be captured
The contractor was given confidence in their overall estimate, and was alerted to key opportunities for improvement
Our work in validating their estimate and schedule proved that the contractor did indeed have a fairly conservative estimate and schedule. We were also able to help them identify a few areas that were not in line with historical rates and/or ratios, and thus enabled them to potentially deliver decreased cost for the owner.
For more information on our work in this area, you can read about our approach to validating project estimates and schedules.