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PLANNING & EXECUTION

MANUAL

Descon Engineering Limited


www.descon.com.pk

DESCON ENGINEERING LIMITED


DESCON WORLD HEAD QUARTERS (DWHQ)
Lahore -53000, Pakistan
Phone: (92-42) 5805134,
Fax: (92-42) 5811005, 5811135
Email: descon@descon.com.pk
Website: http://www.descon.com.pk

PROJECT PLANNING & EXECUTION MANUAL


(Rev-0)

Prepared By

__________________________________
Head Project Management Systems

Approved By

_____________________
Managing Director & CEO

Dated

_____________________

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INDEX

0Table of contents with detail showing topics covered in each section

Chapter
Section
1
1
2

2
1

Introduction
Preamble
Overall scheme
Project Planning
Planning techniques
Work break down structure, Organization break down structure, Mapping of
WBS and OBS, Cost Centre and mapping with BOQ,

Developing the master plan


Identifying activities, Allocating durations, Assigning relationships,
Scheduling, Critical path method and determining the critical path, Resource
loading, Consolidated resource requirement, Smoothing resource
requirements, Trimming of peaks, Filling up a trough, Assigning
responsibility

Levels of plan (1, 2, 3, & 4)


Planning terms
Activities, predecessor and successors, Lag, constraints, Early start, late start,
early finish, late finish, Free float, total float, earned man-hours, actual manhours, latest forecast plan, original plan, efficiency, productivity, man-hours,
standard and project man-hours, cost at completion, budgeted cost, resource,
critical activity, critical path, CPM and PERT, Gantt Chart, Cost Centre,
expense head, direct cost, indirect cost.

3
1
2
3
4
5
6

Project Management Systems used in Descon


Primavera Project Planner P3
Project control system
DCS, DPMS, MMS, ITS , Bottlenecks, Testpacks
GDES, GDMS
SMART, ACCPAC
System Integration

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INDEX
6
1
2
3

7
1
2
3
4
5
6

8
1
2
3
4
5
6
7
8
9
10
11
12

9
1

2
3
4

10
1
2
3
4

Organization
Typical site organization
Responsibility Matrix
Job descriptions of site functions
Planning & Scheduling
Introduction
Planning
Development of Three Month Look ahead Plans
Development of Four Week Look ahead Plans
Supervisor level planning (level 4)
Daily Schedule and Time Sheet
Field Engineering & Document Control
Introduction
Document Control
Receiving, Issuance, Revision handling
Field Engineering
Estimation
Field Marking of drawings
Preparation of field drawings and test packs
Method Statements preparation and submission
Material submittals for approval
Technical clarifications
Preparation of as built drawings
Tracking and Handing over of documents
Material Management
System for Descon Supplied Material
Sourcing, Vendor evaluation, Purchase order, Delivery Challan, Material
loading, receiving, Inspection, Stacking, Issuance and return
Client Material Handling
Reconciliation reports
Disposal of Surplus Material
Monitoring of progress
Earned man-hours concept
Estimation of progress
Progress and Efficiency Control
Progress up-dating

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INDEX
4
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

5
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Pre-mobilization planning
Contract award
Selection of site manager and core team
Gather core team and start training
Understand scope of work, Descon and Client responsibility
Comparison of Bid and Contract
Determine impact on costs
Revisit execution strategy
Revise WBS and OBS if required
Revise budget and cash flow forecasts
Revision of Level 3 Plan
Revise manpower histograms
Prepare 3 month look ahead
Mobilization plan
Appoint mobilization incharge
Configure project management systems
Prepare MRP
Prepare HSE plan
Prepare project specific method statements
Prepare rigging studies
Prepare WPS, PQRs and Project Quality Plan
Get schedules for client deliverables
Summary of Inputs and Outputs for this stage
Mobilization
Site clearance
Arrangement of site facilities
Commission security set up
Set up stores for Descon material and Client Warehouse
Arrange indirect manpower deployment
Arrange direct manpower deployment
Recruitment
Manpower, induction. orientation
Set up staff attendance and control facilities
Arrange equipment and plant deployment
Procurement of first lot of deliverables
Negotiate and award sub contracts
Set up project monitoring systems
Determine resource availability
Prepare 4 week look ahead

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INDEX
11
1
2
3
4
5
6
7
8
9

Construction work
Scheduling of work
Responsibility for execution
Reporting of progress
Quality Health Safety and Environment
Civil work
Mechanical work
E & I works
Equipment and Plant
Completion and handing over

1
2
3
4
5
6

Handling of extra work


Introduction
Defination of Extra work
Identification
Handling
Monitoring
Pricing of extra work

12

13
1
2
3
4
5
6
7
8
9
10
11

Cost control
Bid / Proposal
Budgeting
Budget Rev 1
Project Planning
Project Resource Planning
Execution
Project Progress and Cost Control System
Monitoring
Profitability Analysis
Cash Flow Analysis
Key Performance Indicators (KPI)

14

Feedback to client

15

Invoicing client

16

Feedback to BA and Head Office


Daily Progress reports
Weekly project Performance Report
Project Analytical Study
Project Close out reports

1
2
3
4

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INDEX
17
1
2
3
4

Demobilization
Human resources
Equipment and plant
Project site facilities
Dispatch

Project closeout
Preparation of project wind up report

1
2
3

Project Review and Feedback


Evaluation of Project Performance
Sharing information company wide
Analysis of project windup report

18

19

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CHAPTER 1

Introduction
1.1

Preamble

1.1.1 Purpose
This manual has been compiled to standardize procedures and have their
summaries readily available for use in the companys construction business. It
covers activities from the time a construction job is awarded to the company,
planning and mobilization stages, scheduling execution and monitoring of
activities, interaction with the client, work completion stage, demobilization
and finally incorporation of feedback from projects as they are completed.
1.1.2 Objective
Project Planning & Execution Manual has the following objectives: Standardize work practices and establish benchmarks for performance
measurement.

Develop capability to operate internationally with a multi-national task


force.

Facilitate boundary less information flow.

Consolidate existing knowledge base of best practices and to continuously


improve the same.

Eliminate duplication and wastage of resources.

Bring HR focus in line with organization needs.

Train manpower on Core Competencies.

To inculcate a culture of Plan, Do, Check, Act (PDCA) cycle.

The following advantages are to be gained in adopting standardized


procedures.
All construction projects are completed to the entire satisfaction of
customers

Enhancement of customer confidence in companys construction


capabilities and standards

All construction products exhibit quality and enhance companys image in


the construction industry, both local and international.

All projects are completed within schedule, budget and forecasted cash
flows.

Standardization will help in reducing costs and achieving enhanced profits

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1.1.3 Scope
This manual covers the planning, execution and progress monitoring activities
of construction projects. Plant Services and EPC projects are not covered in
this manual. Details related to Contract Administration and Finance are
covered under separate manuals.

1.2

Overall Scheme
Each construction project has a defined scope of work, defined start and finish
dates, some working constraints and a specified budget. All of the personnel
who are going to be assigned to the project may not have worked together. It is
on account of these challenges that project management becomes difficult
and complex. Therefore it is necessary to have well defined procedures and
clearly spelled out responsibilities that are understood by all the persons
assigned to the project. A properly designed project management system
enables timely response to problems, delays, changes, and obstacles that arise
during the course of execution. It also indicates opportunities that might arise
enabling savings in costs. Without proper project management it is quite likely
that excessive resources shall be utilized to meet the project schedule resulting
in cost overruns and depletion of expected margins.
The planning part of the project involves deciding what is to be done, when,
by whom and with what resources. It is just as important to have a properly
designed system to maintain close observation of activities once the
construction gets underway. Constant vigilance is required to find out what
has actually been accomplished, what remains to be done and whether
resources are available to do it in time. A properly designed project
management system is meant to organize the working and to identify potential
problems so that they can be communicated in time to management. This
enables proper corrective actions to be taken.
Although this manual is only meant to cover the aspects of planning,
execution and monitoring of progress a review of the broader overall picture
has been included. Accordingly the overall sequence of events and the flow of
information from the time of identification of opportunity, submission of the
bid, winning of the contract, planning, controlling the execution, till
completion is depicted in a flow chart that is included as Attachment 1-1,
flow chart. Overview of Project Planning, Execution and Monitoring.
The table 1-2 on the following page explains the actions to be taken by the
individuals designated at each of the key assignments in the overall scheme.
The number in the extreme left column of the table identifies the referred box
on the flow chart. Major activities that are to be performed by the individuals
designated to the assignments are identified in the central column while the
salient outputs from one functionary to another are listed in the right hand
column. This table and the accompanying flow diagrams are provided here to

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give the reader an overview of the overall scheme. Individual activities and the
relevant form of the outputs are described and defined in the corresponding
chapters. Detailed responsibilities of the individuals are included in the Job
Descriptions that are provided in Chapter 6 on Organization. The typical site
organization chart is included in that chapter as Attachment 6-1, Typical Site
Organization.
Serial#
1

Department / Section / Process


Business Development
Identify opportunities
Evaluate prospective customers
Get pre-qualified
Get included in invitation to bid
Evaluate competition
Proposal
Understand scope of work
Evaluate ITB
Get clarifications
Visit Site if possible to evaluate conditions
Prepare and submit proposal
Decide winning strategy, get approvals
Submit Technical and Commercial Proposal

Head Business Area


Negotiate (if required)
Win and sign contract
Select Site Manager
Form project team

Output
Proposal
ITB
Customer and
Competitors data
Enquiry Synopsis
Business Area
As submitted bid.
ITB
Level 3 plan,
Mapping of BOQ and
CCTRs.
CCTR wise summary
of Man-hours and
Quantities,
WBS, OBS,
Mobilization Plan
and Demobilization
plan. Budget Rev 0,
Cash Flow, WINBid
reports
Correspondence with
customer
Draft contract
document with any
changes if applicable
Quotations received
Project Team
Signed Contract
Documents
All documents
received from
proposals, guidelines
on strategy to be
adopted

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Serial#
4

4.1

4.2

4.3
5

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Department / Section / Process

Output

Project Team
Understand scope of work; identify key points in
Contract to protect Companys interest,
Understand DESCON and customer
responsibility.
Analyze proposal working
Compare final contract document with Proposal
Determine impact of any changes in the above on
the project,
Resource loading on level 3 plan
Revise level 3 plan if required
MP histograms at Supervisor level
Revise WBS and OBS if required
Review of budget R 0
Prepare MRP material and consumables
Prepare pre mobilization and mobilization plan
Assign mobilization incharge
Prepare project specific documentation viz. HSE
plan, PQP, WPS and get it approved from
customer.
Get PQR done to finalize WPS and welding
consumables.
Configure Project Monitoring Systems.
Arrange inspection of E&P and tools and get
these certified as required under the procedure.
Project team
Start mobilization activity
Order deliverables after Customers approval
wherever required under the contract.
Project team
Configure project monitoring systems
Site Manager
Review budget R 0 and prepare R 1
Review and approve project specific method
statements
Get client approvals for level 3 plan
Approve overall resources required for execution
Finalize QC manual, WPS and HSE plan
Review Technical Queries prior to issuance to
Customer for clarifications.

Business Area Head


Subcontracting
strategy
Revised level 3 plan
Proposal for budget
revision if required.

Site Manager
Purchase Orders

Configured system
Customer
Method statements
for approval
Level 3 plan for
approval

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Serial#
6

7.1a

7.1b

7.2

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Department / Section / Process

Output

Site Manager
Direct and coordinate construction activities at
site
Ensure use of systems to monitor costs and
progress
Approve revisions in Level 3 plan as per Latest
Forecast
Achieve targeted invoice within costs
Ensure timely submission of invoices
Ensure achievement of targeted margins
Manage cash flow
Ensures that all extra work is identified and
billed
Take remedial action to meet project objectives
Planning and FEDC Manager
Oversee FEDC and Planning functions
Review and optimize / update Level 3 plan as
per latest forecast
Highlight critical path and foresee bottlenecks
Analyses progress and efficiency reports
Keeps track of changes in BOQ and keeps it
updated
Prepares 3 month forecasts
Planning Engineer
Generate revised rolling 3 month and 4 week
look ahead plans
Identifies resource requirement for 3month look
ahead and 4 week look ahead plans
Monitor and analyze discipline wise progress,
Update level 3 plan
Planning and FEDC Manager
Keeps track of extra work Ensures that all extra
work is identified and billed.
Communicates with client regarding changes in
scope and gets approvals
Keeps contracts engineer updated on progress
and changes of scope
Supports contracts engineer in invoice generation

Customer
Progress
Invoices for payment

Discipline Incharges
3 month and 4 week
look ahead plans
Targets
Progress analysis and
comparison with
plans
Bottleneck summary
Efficiency reports

Customer
Intimation about
extra work
Technical queries

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Serial#
7.3

7.4

7.5

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Department / Section / Process

Output

FEDC Engineer
Ensure that document control system is installed
and working properly
Ensures allocation of drawings to WBS/OBS
Ensure that BOQ/BM is taken off correctly and
entered into PCS
Marking of Standard man-hours, CCTR and
Supervisors codes on drawings
Prepare drawings for fabrication/erection.
Prepares sketches for execution when ever
necessary and issue to execution team after
getting it approved.
Facilitates Construction Manager in preparation
of rigging studies.
Planning and FEDC Manager
Supports site manager in revision of budget and
cash flow
Receive data from Financial Controller for
weekly report
Compile weekly Project Performance report
Monitoring of progress and comparison with
contractual commitments.
FEDC Engineer
Receive Technical Clarification requests.
If possible provide clarifications from data and
available specifications. Otherwise consults site
manager before sending to Customer for
clarification and communicates response to all
concerned.
Facilitates in preparation of project specific
method statements.

Discipline Incharges
Drawings for
Fabrication and
erection
Drawing wise BOM,
BOQ and Resource
requirement
Allocation of material
for drawings

Site Manager
Bottleneck summary
Efficiency reports
Progress analysis and
comparison with
plans
Weekly Project
Performance report
Customer
Technical
Clarification requests

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Serial#
8a

8b

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Department / Section / Process

Output

CM/Discipline In-charge
Discuss and distribute weekly plans to Discipline
Engineers
Assignment of drawings to supervisors
Review and optimize resource utilization
Guide Discipline Engineers in breaking up 4
week look ahead plan
Prepare project specific method statements
Ensure that extra work is identified and reported
for invoicing
Discipline Engineer
Check work front availability on 04 week basis.
Ensure quality of work and minimization of
wastage
Monitor efficiency and provide guidance to bring
it up to 1
Ensure that all relevant procedures are available
and followed
Identify extra work from contractual work scope
Ensure accurate reporting of work and correct
posting of man-hours into DSTS
Area Scheduler
Prepares daily work plans from 4 week look
ahead, after confirming the work front for the
week / day.
Interact with Discipline/Area Supervisors to plan
future work
Plan daily jobs at supervisor level, viz. level 4
planning
Print and distribute DSTS
Monitor daily progress
Enter progress into DPMS module
Ensures booking of resources to correct CCTR
Print daily supervisor efficiency reports
Identify and report extra work
Roll up area wise plans on weekly basis

Discipline Engineers
Weekly and Daily
Targets
Guidance on splitting
4 week look ahead

Area Scheduler
Weekly and Daily
Targets

Discipline
Supervisor
Daily Schedule and
Time Sheet
Information about
material availability
for drawings
Planning and FEDC
Manager
Progress entered into
DPMS
Efficiency reports
available in system

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PROJECT PLANNING & EXECUTION MANUAL

Serial#
10

11

12

13

Department / Section / Process


Discipline Supervisor
Achieve progress targets with optimum resource
use
Booking of resources to correct CCTR
Quality work

IC PP & A
Ensure entry of CCTR wise man-hours from
DSTS into GDMS
Compare DSTS hours with time card man-hours
of direct staff
Correct time entries in time cards
Rationalize man-hours based on lower of the two
Prepare Payroll
Contracts Engineer
Receive progress figures from Planning & FEDC
Manager and compare with contractual
commitments
Estimating costs and revenue from extra work
Estimating cost to complete
Preparation of invoices as per progress
Preparation of invoices for extra work
Compilation of data for claims
Negotiate and award subcontracts
Handling of subcontracts
IC Procurement
Floating enquires for site procurement
Evaluation of quotes issuance of purchase orders,
and entry into system
Follow up of POs, internal inspection of material
and shipment after proper crating.
Ensure vendor invoices are received and
adjusted.
Return of vendor guarantees, if any.

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Output
Area Scheduler
Filled out DSTS
showing progress
achieved
I/C PP&A
Filled out DSTS
showing man-hours
utilization on CCTRS
Financial Controller
Area Scheduler
Corrected CCTR
wise man-hours
available in the
system
Financial Controller
Cost and financial
forecasts
Site Manager
Invoices for
submission to
customer

Suppliers
Enquiries
Purchase Orders
I/C Stores
Purchase Order
Copies

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Serial#
14

15

16

17

Department / Section / Process


IC Stores
Using ACCPAC Icon module for raising of
indents as per MRP and all other requirements
Entry of POs into system
Receiving material and entry into system
Arrange inspection of incoming material.
Issuance of material
Processing of material returns
Ensuring accuracy of inventory
Tracking customer supplied free issue material in
MMS module
Inspection of free issue material and generate a
report as required.
Receipt and issuance of free issue material
Reconciliation of all materials in consultation
with Central Material Controller
Financial Controller
Preparation of project analytical study
Compilation of figures for Weekly Project
Performance report.
Recognizing the accruals.
Track advances and guarantees.
Preparation of proposals for Budget revisions
Monitoring of cash flow
Correct and timely booking of incurred costs and
revenue.
Amortization of expenses as per company policy.
Site Manager
Review of Progress and Efficiency
Corrective actions
Observations on Weekly Project Performance.
Response to clarifications
Set next week target
Set targets for next three months and organize
resources
Submission of progress reports to customer in
agreed format
Contractual correspondence with client
Site Manager
Submission of invoices to client
Contractual correspondence
Approval of progress reports in client format

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Output
Financial Controller
Availability of
updated figures in
system for the
following
Cost of purchase
orders issued
Cost of material in
inventory
Cost of materials
issued

Planning and FEDC


Manager
figures for Weekly
Project Performance
report
Site Manager
Cost analysis and
revenue forecasts
Business Area Head
Cost analysis and
revenue forecasts
Business Area Head
Progress reports
Head PMS
Clarifications of
observations
Customer
Progress reports
Invoices
Customer
Invoices
Progress reports

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reproduction of the content is strictly prohibited. Copyrights Ordinance 2002, All Rights Reserved.

PROJECT PLANNING & EXECUTION MANUAL

Serial#

Department / Section / Process

18

Customer
Arrangement for timely delivery of Drawings
and Specifications
Intimation of supply of free issue materials

18.1

Customer
Authorization of extra work
Arranges payment against invoices
Make access available as per plan
Head PMS
Analysis of all ongoing projects and compilation
of reports for review
Request clarifications from Site Managers where
required
Analysis of project performance and preparation
of feedback to proposal on overall project
estimation norms

19

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Output
Planning and FEDC
Manager
Drawings and
Specifications
Response to
Technical
Clarifications
Site Manager
Payment against
invoices
CEO and CFO
Projects Performance
summary reports
Business Area Head
Observations on
Projects Performance
Proposal
Department
Feedback for revision
of estimation norms

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CHAPTER 1 (Attachments)
1) Overview Project Planning and Execution

Attachment 1.1

2) Typical Site Organization

Attachment 6.1

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CHAPTER 2

Project Planning
Project planning involves breaking down the entire project into smaller
manageable activities, determining the durations, interrelationship, and
resource requirements of each activity. Once this has been completed then the
application of resources is scheduled in a planned manner. Arrangements are
made to monitor progress and costs. When work has started progress and
resource utilization are monitored closely. Corrective actions are taken
wherever required in order to be able to meet the agreed objectives for the
project.
This chapter covers the following topics:
Planning techniques
Work break down structure
Organization breakdown structure
Mapping of Work and Organization Break Down Structures
Cost Centres and Mapping of Cost Centres with Bill of Quantities
Levels of plan
Planning terms

2.1

Planning Techniques

2.1.1 Work Break down structure (WBS)


This is a convenient way of breaking down a long and complex package into
work packages of smaller duration and complexity so that the project becomes
cost effectively manageable and executable. A properly planned WBS delivers
the following benefits
The project can be planned systematically
Resources can be effectively scheduled
Work teams can be assigned responsibilities
Costs and budget elements can be compared
While preparing the WBS clients specified Scope of work and BOQ are
analyzed keeping in view applicable constraints. The constraints could be in
the form of a fixed time schedule availability of staffing. The projects
deliverables are then broken down over measurable and verifiable tasks. Data
of the type of WBS used on earlier similar projects and the acceptance and
performance criteria for the project are all considered in coming up with a
recommendation. It must be borne in mind that the items in the WBS should
be such that they can be individually scheduled, budgeted and assigned to an
organizational unit.

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The output of the WBS preparation process is a deliverables oriented grouping


of project elements. It enables progress and cost data to be summarized at
different levels of detail. The structure can be graphically portrayed and is
based on hierarchy of work to be accomplished beginning with the end
product at the top and subdividing in successive levels down to individual
activities at the bottom.
In construction projects the division of the overall construction work can start
on the basis of discipline and then proceed down into areas, zones. Typical
WBS in DESCON environment is as follows:
1. Project
1.1 Construction
1.1.1 Discipline
1.1.1.1 Zone/Area
1.1.1.1.1

Cost Center/Activity

The WBS for the construction part can be graphically represented as under
Plant Construction

Discipline A

Discipline B

Discipline C

Area X

Area Y

Area Z

Activities

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2.1.2 Organization Breakdown Structure


OBS represents a project organization structure that matches with WBS to
give effective control over the project. Typical OBS in DESCON environment
is as follows:
1. Site Manager
1.1 Construction Manager
1.1.1 Discipline In-charge
1.1.1.1 Discipline Engineer
1.1.1.1.1 Discipline Supervisor
Please refer to Attachment 6.1- for a typical Site Organization Chart.
2.1.3 Mapping of WBS on OBS
Mapping of WBS on OBS is a process of forming Work Packages for each
chain of command in an organization for the successful achievement of goals.
At Descon projects WBS are mapped with OBS as follows:
WBS

OBS

Project

Site Manager

Construction

Construction Manager

Discipline

Discipline In-charge

Zone/Area

Discipline Engineer

Cost Center/Activity

Discipline Supervisor

Please refer to Attachment 2.1 for an example of mapping of WBS and OBS
2.1.4 Cost Center (CCTR) & Mapping of CCTR and BOQ
A Cost Center (CCTR) is the smallest measurable unit of work / activity to
which costs can be booked. In Descon, standardized cost centers have been
identified and listed for most of the construction activities. These are used at
the estimation stage and the same cost centers are used during scheduling and
monitoring of progress and for assimilation of costs. Some examples are given
here

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CCTR Description

CCTR

Clearing, Grubbing & Excavation

21120

Backfilling & Compaction

21130

Stationary Equipment Installation

22210

CS Pipe Fabrication

23120

Cable Laying Works

25510

Field Instruments Installation

25620

During proposal stage the quantity of each BOQ item is distributed over
standard cost centers. This facilitates preparing a CCTR wise summary for
quantities and man-hours. It may however be noted that there could be more
than one cost center in one BOQ item e.g. the customer BOQ description
Earth Works may be covered in cost centers 21120 and 21130. In this case
the BOQ item quantity shall have to be split over number of Descons
standard cost centers. Similarly some of the Descon cost centers may be
distributed over a number of customer BOQ items.
Proposal department provides the Cost Centers used on the project along with
the estimated quantities and man-hours against each cost center. (See
Attachment 2.2). These are subsequently referred to as Budgeted Quantities
and Planned Man-hours respectively.

2.2

Developing the master plan

2.2.1 Identifying / Defining Activities


During the process of preparing the work break down structure the overall
scope has been broken down into individual activities. Activities are of many
types but the main type is a task, which has the following characteristics.

Consumes time

Consumes resources

Has a definite start and finish

Is assignable

Is measurable

Other types of activities are milestones which represent an event or a phase.

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2.2.2 Allocating Duration


The next phase of the overall scheduling process is allocation of duration to
each activity. Duration may be allocated on the basis of nature/quantum of
work, availability of resources and the past experience. Duration of activities
may be in hours, days, weeks or months depending upon the nature of the
activities and the overall duration of the entire project. Adequate provisions
should be kept for contingencies and the unforeseen that may delay the
activity.
2.2.3 Assigning Relationships
The activities should be linked together in a logical way as these are supposed
to be executed. These relationships are to be decided by the Planning Team.
The four possible relationships may be as follows

Finish-to-Start relationship i.e. the successor activity (dependent activity)


can only start after the predecessor activity (independent activity) is
completed.

Start-to-Start relationship i.e. the successor activity (dependent activity)


can only start when the predecessor activity (independent activity) has
started.

Finish-to-Finish relationship i.e. the successor activity (dependent


activity) can only finish when the predecessor activity (independent
activity) has finished.

Start-to-Finish relationship i.e. the successor activity (dependent activity)


can only finish when the predecessor activity (independent activity) is
started.
For graphical representation please See Attachment 2.3a to d

2.2.4 Scheduling
Scheduled start and finish dates for each activity and ultimately the entire
project are calculated based on the estimated duration of the activities, the
relationships between the activities and any applicable constraint. This process
is done in two steps. In the first step called Forward Pass early start and finish
dates of each activity are calculated starting from the project start date. In the
next step late start and finish dates of each activity are calculated starting from
the project finish date. The difference between early start and late start or early
finish and late finish is known as Float of that activity. Its the margin of delay
for an activity without delaying its successor activity.
If the completion date of the project goes beyond the contractual hand-over
date then the whole schedule needs to be re-visited.
Squeezing the schedule may require one or all of the following techniques
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Reducing duration of activities by deploying extra resources or working


extended hours where possible physically and logically.

Redefining relationships between activities. Look for relationships that can


be converted from Finish-to Start to Start-to-Start with some lag.

Drag back activities that can practically be started earlier.

Locate activities that can be performed in parallel to other activities.

Scheduling is an iterative process. It requires a lot of brainstorming. Various


options are prepared and discussed among the Project planning team and the
best option is selected.
2.2.5 Determining Critical Path
Critical path is the continuous chain of activities with the longest accumulative
duration and nil Total Float. It determines the project duration.
The activities on the critical path should be re-checked critically whether these
are genuinely critical or have become critical due to some error in logical
relationships of these activities with others.
Extra care should be given to activities that fall on critical path, as delay in any
of these will result in delay of the whole project. Forward planning should be
done to make sure nothing hinders critical activities. Resource requirement for
critical activities should be met on priority.
For a graphical representation of critical path please see Attachment 2.4
2.2.6 Resource Loading
Usually resources must be consumed to complete an activity. The resources
required may include manpower, tools and plants, cranes and heavy
machinery, direct materials, consumables, special jigs and fixtures etc.
Resource loading is to be carried out by the proposals department using their
estimation software Win Bid. In Win Bid each BOQ item is assigned a cost
center and required resources are also assigned. The data is then exported to
Primavera or P3 from Win Bid on any of the following basis:
i.

Area as activities

ii.

BOQ items as activities

iii.

Area / CCTR as activities


(Usually the basis used is Area / CCTR as activities.)

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Following resource data can also be exported to P3 from Win Bid:


i.
Direct man-hours
ii.
Craft wise man-hour breakup
iii.
Direct material
iv.
Direct Consumables
v.
Equipment (from Packages)
After importation of data from Win Bid an overall requirement of resources
over the entire duration of the project is determined. If this requirement is not
possible to be met with available resources then the schedule needs to be revisited. One or all of the following may help in this situation

Look for activities that are not critical but require more resources.
Increasing duration of such activities will result in decrease in resource
requirement.

Look for activities with large free floats (margins for delay). Delaying
such activities will not disturb end date of the project but will reduce
resource requirements.

Look for alternative cheaper resources. Chain blocks may be used in place
of crane in certain cases. Concrete mixers may be used in place of
Batching Plant or Concrete hoists may be used in place of concrete pumps
for small concrete pouring.

Look for the possibilities of getting resources arranged from external


sources.

2.2.7 Consolidated Resource Requirement


After resources allocation to each activity is finalized, a time based
requirement of each resource is generated for the entire project life span. This
gives the consolidated requirement of each resource for each time interval.
Abrupt peaks followed by a trough in the histogram may be observed. That
means additional hiring of that resource for the peak period and laying-off
during the lean period and re-hiring when the next peak is reached which is
not practicable. The manpower resource requirement should be balanced to the
possible extent such that there should be a gradual build up of manpower till
the peak is reached. This manpower should be maintained during the peak
period. Gradual reduction of manpower should be done as the project proceeds
for its closure. Please See Attachment 2.5
2.2.8 Smoothening of Resource Requirement
Ideally, resource requirement should be a smooth curve, i.e. gradual increase
till it reaches its peak, maintains peak for required period and then gradually
decreases till project is complete.
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There are ways and means to smoothen resource requirement to the possible
extent. The activities should be rescheduled, keeping the logic intact, so that
peaks should be trimmed off and more resource requirement is generated to
fill up the troughs. Employing the following techniques can help a lot in doing
this
2.2.9 Trimming off a peak

Look for activities that fall in that period especially the one starting in the
peak period or the one finishing in that period.

Among these activities, concentrate more on the activities with large


requirement for that resource and with bigger free floats.

Try to drag such activities, keeping the logic intact, out of the peak region
and into the trough region either by delaying the start, such that the activity
starts after the peak or finish before that period. It is generally easier to
take such activities out of the peak requirement period without upsetting
the schedule.

Increase the duration of activities with large requirement of that resource


and with large free float lying in the peak period.

By assigning suitable Resource Distribution Curve to that activity. It is


however important that all resources assigned to that activity should have
the same Resource Distribution Curve. Also this can only be useful for
activities with duration long enough to cover at least one peak and one
trough.

2.2.10 Filling up a trough

Look for the activities that are either finishing immediately before the
trough period or starting immediately after that period.

Among these activities, concentrate more on the activities with large


requirement for that resource and with bigger free floats.

Try to drag such activities, keeping the logic intact, into the trough period
either by delaying its finish date or by starting it early.

Look for the activities that have large resource requirement and either
finish immediately before the trough period or start immediately after that
period. It is generally easier to take such activities into the trough period
without much disturbing the schedule.

By assigning suitable Resource Distribution Curve to that activity. But all


resources assigned to that activity should have the same Resource
Distribution Curve. Also this can only be useful for activities with duration
long enough to cover at least one peak and one trough.

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Important Note: It is practically very difficult to smooth out all the resources
as smoothening of one resource may disturb some other resource. So it is
recommended that first priority during smoothening process should be given
to critical resources like cranes, special crafts etc. and second priority should
be given to less critical resources like most of materials and consumables.
Please see Attachment 2.6(a) & 2.6(b)for examples of un-smoothened and
smoothened resources
2.2.11 Assigning Responsibility
Determining responsibility for each activity is critical to any scheduling effort,
since any construction project involves bringing together many crafts,
subcontractors, suppliers and others to attain project completion. Activities
should be defined so that the responsibility for activity completion is clear and
assignable to a single party. If the activity is to be completed by the
contractor's own force then it should be assigned to a proper supervisor. If the
activity is to be completed by the subcontractor or the vendor, responsibility
should be assigned accordingly.

2.3

Levels of Plan
There are various levels of planning depending upon the extent to which the
activities have been broken down and the details provided therein.
In DESCON generally four levels of plans are prepared.
Level - 1 Plan
This is the basic contractual plan that defines start and end dates for each of
the major activities like design, procurement and construction. See
Attachment 2.7
Level - 2 Plan
In this level, the discipline-wise schedule for each of the above major
activities is prepared. For example the schedule for civil, mechanical and E&I
construction activities is defined separately. See Attachment 2.8
Level - 3 Plan
In this level, the level 2 plan is broken down into various Zones/Areas. The
activities of Level 2 plan are further divided into smaller activities (up-to
Cost Centers level) and schedule for each Cost center is provided. For
example Mechanical discipline is further broken down to rotary equipment,
stationary equipment, CS piping fabrication etc. See Attachment 2.9
Level - 4 Plan
This plan is prepared at site. In this plan the activities of the level 3 plan are
broken down to Drawing/Isometric level. In Descon working this exercise is
done at supervisor level.

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Planning terms
For the purpose of explanation the terms used in planning are arranged here in
their logical sequence rather than alphabetically.
Activity or Task
The tasks that have to be accomplished in order to complete the project.
Predecessor Activity
The activity that effects start or finish dates of other activities (Successor
activities).
Successor Activity
The activity for which start or finish dates are dependent on other activities
(Predecessor activities).
Lag
Lag staggers or delays the relationship of one activity (predecessor) to another
(successor).
Constraints
Constraints are ground realities that overrule the logical start and finish time of
the activity. For example, a certain piece of equipment will be received on,
say, 25th of March. That equipments erection activity cannot be started
before 26th of March irrespective of the fact that the foundation will be ready
by 15th of March.
So we will simply put a constraint to this activity that it cannot start before
26th of March. Similarly concreting work cannot be easily done in winter
months in regions where temperature goes below freezing during winter.
Various types of constraints can be used but most commonly used are as
follows

Start No Earlier Than - This type of constraint is applied to restrict that


activity to start before a certain date.

Start No Later Than - This type of constraint is applied to restrict that


activity from starting beyond a certain date.

Finish No Earlier Than - This type of constraint is applied to restrict that


activity to finish before a certain date.

Finish No Later Than - This type of constraint is applied to restrict that


activity to finish beyond a certain date.

Start On - To impose a compulsory start date to that activity.

Finish On - To impose a compulsory finish date to that activity.

Early Start
The earliest possible time at which the activity can be started.
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Late Start
The latest possible time an activity can be started without delaying the end
date of the project.
Early Finish
The earliest possible time at which an activity can be finished.
Late Finish
The latest possible time at which an activity can be finished without delaying
the end date of the project.
Free float
Its the margin of delay for an activity without delaying its successor activity.
See Attachment 2.10
Total Float
Its the margin of delay for an activity or a chain of activity without delaying
the project. See Attachment 2.11
Scheduling
The process of calculating start and end dates of the activities.
Forward Pass
The process of calculating start and finish dates of each activity starting from
the project start date. This process generates early start and early finish dates
for each activity. See Attachment 2.12
Backward Pass
The process of calculating start and finish dates of each activity starting from
the project finish date. This process generates late start and late finish dates for
each activity. See Attachment 2.13
Data date
The point in time that separates actual (historical) data from future (scheduled)
data.
Man-hours
It is yardstick for measurement of effort. For example, 4 Man-hour will mean
any of the following:
1 man working for 4 hours
4 men working for 1 hour
Standard Man-hours
Estimated effort per unit required to perform a job in terms of man-hours.
Earned Man-hours
It is amount of work executed in terms of standard man-hours.
Project / Budgeted Man-hours
Total number of man-hours required to execute a project.
Actual Man-hours
It is the amount of man-hours actually utilized to execute work.
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Latest Forecast Plan


Revised plan showing expected dates for balance activities at certain point in
time during project life span.
Original (Base) Plan
A plan showing all activities as foreseen at start of the project.
Efficiency
It is the ratio of earned man-hours to actual man-hours.
Productivity
It is number of work units produced per man-hour spent.
Cost at Completion
The expected total cost at completion of an activity or a project.
Budgeted Cost
Total estimated cost approved for execution of a project.
Resource
Anything that is required to perform an activity is called a resource. A
resource can be manpower, equipment or material.
Critical Activity
An activity that has potential of delaying a project is called a critical activity.
Critical Path
Chain of critical activities that has potential of delaying a project is called
Critical Path. Such activities determine project duration. See Attachment 2.4
Critical path Method (CPM)
A network analysis technique used to predict project duration, by analyzing
which sequence of activities (which path) has the least amount of scheduling
flexibility (the least amount of float).
Progress Evaluation and Review Technique (PERT)
An event oriented network analysis technique used to estimate project duration
when there is a higher degree of uncertainty with the individual activity
duration estimates. PERT applies the Critical path method to a weighted
average duration estimates.
Gantt Chart
A graphic display of schedule-related information listing project elements on
left side of the chart, dates across the top and activity durations are shown as
date-placed horizontal bars. It is also known as Bar Chart.
Work Break down structure (WBS)
WBS represents how total job is broken down into sub activities like
disciplines and cost centers.
Organization Breakdown Structure
OBS represents project organization that matches with WBS to give effective
control over the project.
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Cost Center
A Cost Center is the lowest identifiable/measurable activity to which costs
incurred can be booked.
Direct Cost
Costs that can be clearly attributed to the activity performed. These costs are
dependent on quantity of the work performed.
Indirect Cost
Costs that cannot be clearly attributed to specific activity. These costs are
incurred irrespective of the quantity of the work performed.

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CHAPTER 2 (Attachments)
1) Mapping of OBS and WBS

Attachment 2.1

2) List of CCTR with quantities

Attachment 2.2

3) Activity Relationship

Attachment 2.3a

4) Activity Relationship

Attachment 2.3b

5) Activity Relationship

Attachment 2.3c

6) Activity Relationship

Attachment 2.3d

7) Critical Path

Attachment 2.4

8) Consolidated Resource Requirement

Attachment 2.5

9) Smoothing of Resources

Attachment 2.6a

10) Smoothing of Resources

Attachment 2.6b

11) Level 01 Plan

Attachment 2.7

12) Level 02 Plan

Attachment 2.8

13) Level 03 Plan

Attachment 2.9

14) Free Float

Attachment 2.10

15) Total Float

Attachment 2.11

16) Forward Pass

Attachment 2.12

17) Backward Pass

Attachment 2.13

18) Typical Site Organization

Attachment 6.1

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CHAPTER 3

Project Management Systems used in Descon


3.1 Primavera Project Planner (P3)
Primavera Project Planner is an Off-the-Shelf package meant for planning and
monitoring purposes on small, medium and large-scale projects.
In Descon it is used for developing and monitoring project schedule. This
schedule (Generally known as Level-III plan includes Discipline, Zone, Area
and Cost Centers (as activities), craftwise resources, direct materials and
consumables, definition of Work Break Down Structure, Organizational Break
down Structure and their relationships. It is used right from the proposal stage
in developing the level 1, 2 and 3 plans. Then it is used for scheduling of
activities by importing data into it from The WINBID estimation software. In
the pre-mobilization stage it is used for revising the level 3 plan and for
drawing up the 3 month and 4 week look ahead plans. The allocation of
resources and their smoothing is carried out in P3. The software is used for
printing of manpower histograms. It allows the user to view the network in
either bar chart form or as a PERT diagram. During the project execution
phase it is used for updating the project master schedule and for generating the
3 month and 4 week look ahead plans.
For further details please refer to the Primavera Planning and Control Guide.

3.2 PCS
Project Control System or PCS is in-house developed software designed to
monitor progress and efficiencies during the project execution phase. It
consists of the following modules:

DCS - Document Control System

DPMS - Descon Project Monitoring Systems

MMS - Materials Management System

ITS - Inspection and Test Solutions

Bottlenecks

Test Packs
3.2.1 DCS (Document Control System)
DCS is an important part of PCS. As the name suggests, DCS is aimed at
exercising effective document control at project sites. The target users of the
system are document controllers. Main features of DCS are efficient receipt,
issuance, retrieval, status and revision management of documents. DCS is
primarily meant for external documents, i.e. from client or consultant, but can
also be easily extended to cater for internal documents using intelligent coding
structure. In contrast to routine document control, this DCS module forms a
very important part of an integrated project management environment. The
information available in the DCS module is shared by other modules of PCS
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DPMS, ITS, & MMS. However this information sharing is one way only:
DCS does not use information of the other systems. The usual mode of
inputting information in the system is manual entry, but in some cases
information can be electronically input in the system. The rich reporting
capabilities of DCS help document controller keep track of different
information related to drawings.
Reports that can be generated through DCS are:

Transmittal wise receipt/issuance: It lists all receipts and issues, and these
can be filtered for transmittal number, duration, received, issued, or both.
They can be further filtered for Area incharge, supervisor, location, and
test pack. The report can also filter for superceded or latest. The report also
includes MCN (Material Control Number) and Test Pack numbers that
have been entered in different modules.

Drawing wise ledger: This report shows receiving and issuance record.

Drawings to be issued: Indicates when new revisions of earlier issued


drawings are received.

Drawings status: It gives a full summary and can show if different versions
of a drawing are in use in different modules,

QS analysis: It indicates assignment of drawings to each QS

DCS flow sheet is attached as Attachment 3.1


3.2.2 DPMS (Descon Progress Monitoring System)
DPMS holds a central position in Descons integrated project management
environment, and is used to schedule the work and to monitor projects on daily
basis. The target audience of the DPMS are planning and FEDC managers,
construction managers, discipline incharges, discipline engineers, planning
engineers, area schedulers and quantity surveyors. The main features of DPMS
are drawing and cost center wise BOQ entry, level 4 planning, generation of
DSTSs, and subsequent progress entry at supervisor level. Original and latest
forecast plans of a project, and actual man-hours from GDMS are imported
into DPMS. They form the basis of progress and efficiency monitoring in
DPMS. Other inputs of the system comprise documents registered in DCS,
materials received in MMS, material consumption in ACCPAC IC and
inspection classes as defined in ITS. DPMS compares actual progress for a
period with corresponding planned values as per the plans, and provides many
useful reports that show the status of the project team on different project
performance parameters. The most sought after and frequently used reports are
project top sheet, man-hour analysis reports and material and consumable
analysis report which are to be submitted to B. A. and H.O. on weekly basis
by the project site team. Apart from these reports, DPMS provides outputs to
other systems, these systems include ITS, P3 and ACCPAC.
Reports that can be generated from DPMS are:
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Work front availability status: The summary report shows status of


drawing wise material availability and issuance. Detailed report shows
the total quantity available under client issued and also the quantity
under site issued

DSTS: This is the Daily Schedule and Time Sheet for each supervisor.

Drawing wise progress summary: It shows earned quantity against


individual steps and total for the CCTR.

Incharge/supervisor wise efficiency.

Consumable/material analysis.

Report to update Primavera project.

Man-hour analysis: It provides discipline wise comparison of original


and latest figures of quantities and budgeted man-hours. It shows
comparison of planned and earned quantities as well as planned,
earned and actual man-hours and calculates man-hours per unit
efficiency.

Project top sheet: It compares progress in terms of planned original,


latest forecast and actual percentages. The report also shows
comparison of original budgeted, latest forecast and actual man-hours
with earned man-hours. These tabulations are available discipline wise
as well as overall with efficiency calculation and S curve.

Client stock availability.

DPMS flow sheet is attached as Attachment 3.2

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3.2.3 Materials Management System (MMS)


The main purpose of MMS is to handle all transactions related to client/free
issued material. The intended users of MMS are storekeepers in the Client
Material Warehouse. The major input of the system is the entry of BOM for
each drawing entered into DCS. Activities that require use of client-supplied
materials are planned in DPMS according to the entry of BOM status in the
MMS module.
Reports that can be produced from MMS are:

Drawing material status: It shows quantity required, issued and


reserved,

Isometric/drawing wise stock: It shows quantity required along with


receipts and issues,

Item wise receipts/issue: It shows quantity required and receipts and


issues for this item.

Item wise stock: It shows quantity required, received, issued, returned


and present stock.

Item wise ledger: It shows record of all transactions indicating stock


after each receipt and issuance.

Shipment detail.

Over issuance.

Shipment wise work front detail: It indicates required, issued, reserved,


short, expected date of arrival and shipment quantity reserved.

Drawing wise quantity and issues.


MMS flow sheet is attached as Attachment 3.3
3.2.4 ITS (Inspection and Test Solutions)
Inspection and Test Solution is primarily designed to control the activities in
which inspection and testing is involved. The target users of the system are
quality control inspectors. The features of the system are inspection progress
and monitoring; inspection activities scheduling and performance control. ITS
is prompted automatically when the progress entered in DPMS reaches a stage
where inspection requirement have been specified. Like wise when test is
complete and it is entered in ITS, DPMS is prompted. The main output of ITS
are Statistical Analysis, Production reports, and Comparison reports.

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Reports that can be produced from ITS are:

Welders Progress Detail: This report shows the welders performance.


Overall progress is shown in term of dia inches and is verified by
QA/QC department.

Welders Progress Summary: The objective of this report is to view


welders efficiency during a specified period of time. Efficiency is
calculated as diameter inch welded per day. Report shows diameter
inches earned, number of working days and diameter inch welded per
day.

Welders Qualification: This report is produced to visually check the


qualification of all the welders on a process for a specific year.
Mobilization and Demobilization dates are also listed in this report.

Outstanding Repairs: This report is produced to know the status of


pending repair work. Supervisor, drawing, welder, report number and
repair detailed information is also listed with each repair.

Pending RT Status: This report is produced to view balance RT work


of NDE Contractor as requested by QA/QC.

Welder Wise Statistical Analysis: This report shows the work done by
a welder or a pair of welders with repair information under an
inspection extent for a specific period of time.

Drawing Wise Statistical Analysis: This report shows the work done
under a drawing with information of the inspection extent for a specific
period of time.

Generation of Check advice for inspections.

Production Report - Radiographic Test Status: The object of this report


is to view the detailed information of executed radiography test(s) and
results.

Production Report - Inspection Activity Wise Progress Report: The


primary purpose of this report is to check the Inspection Activity
progress status. This report covers all the disciplines.

Welding Production Supervisor Wise: This report monitors the


supervisor performance in term of diameter inches welded during
specific period of time.

Welder Repair % age based on RT: The primary purpose of this report
is to view the %age repair on joints and %age of film on repair
performed by welder(s) during a specific period of time.

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Inspection Summary: The primary purpose of this report is to view the


entire inspection information at a glance. In the report criteria you can
also have the option to report on entire test pack in a single selection.

RT Films Status: This report gives the status of RT Film usage during
a specific period of time. This report is also used to compute the
payment of NDE contractor.

Project Joint Efficiency: This report shows the overall picture of


inspection and their results in the project.

Repair Type Wise Comparison: The primary purpose of this report is


to view the occurrence of all types of repairs in the project. This report
also distinguishes the mostly occurred repair.

Welder Wise Repair %age: This report shows percentage of repair type
of welder against each month.
ITS flow sheet is attached as Attachment 3.4
3.2.5 Bottlenecks
This system enables its users to book major bottlenecks in a project. When a
bottleneck is observed it is entered in the system, and it is used to keep track of the
factors responsible for the bottleneck, incharges and clients comments thereupon,
remedial actions taken, effects of the bottleneck, etc. The report that is produced
from this system is

Bottlenecks Summary: This reports shows the information for a reported


problem. It includes the name of the CCTR and phylum at which the
problem has occurred, the comments of the in charges if any, any action
taken on the problem, identification that the problem is due to Client or is
due to DESCON, if there are any clients comments on the problem and in
which category this problem lies.
3.2.6 Test packs
Test pack is used to divide large network of interconnected pipes into small
manageable parts to facilitate testing of the parts. Test packs are made necessarily
for a process system having common operating and testing parameters.
Test Packs are prepared as early as possible containing a number of drawings
related to a system or for part of the system boundary keeping in view its handling
during testing or as required by the commissioning team.
This module helps in tracking the progress status of inspection within a Test Pack
on the drawings. It also tracks the movement of test packs. This module is
connected with the ITS module and the Inspection Summary report contains a
filter for Test Pack which enables a user to view the Inspection Status with in a
Test Pack.

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Following reports are available in the Test Pack module


Test Pack Summary: This report shows the test pack movement control
summary.

3.3

Test Pack Status Report: This report shows the status of the activities that
are to be conducted for the Test Packs. It shows the completion dates of the
activities that have been finished.

Gainful Deployment of Manpower System (GDMS)


Gainful deployment of manpower system is basically designed to ensure that
manpower is being efficiently deployed. The system does not arrange
deployment by itself but helps in monitoring the efficiency of its utilization. It
is operated by the timekeeper at the site. Particulars of all the site-based staff
are fed into GDMS. This includes their terms and conditions from the point of
view of salary administration. Daily staff attendance from DSTS showing cost
center wise allocation of man-hours is fed into it. The daily time card entries
for the staff are also keyed in and compared with the DSTS attendance to
come to a figure of the actual hours to be paid to the individual. The system
provides electronic output to DSTS in terms of man-hours booked to each
CCTR. These values are then compared in DSTS with the earned man-hours
achieved to determine the efficiency of utilization of manpower with each
supervisor.
For the purpose of Payroll it provides complete figures for each direct
employee deployed at site. The reports that can be generated from the system
are listed below:

Man-hour reports

Category wise Man-hour summary

Craft & CCTR wise Man-hour summary

Payroll related reports

Journal voucher for salary

Social security Contribution report

GDMS Flow Chart is attached as Attachment 3.5


For details of system operation refer to the GDMS Manual

3.4

Gainful Deployment of Equipment System (GDES)


GDES is designed to control equipment cost and productivity by gainful
deployment of equipment. Logbooks are maintained for each piece of
equipment. The number of hours the equipment worked on various Cost
Centers is noted in the log book. This data is then fed into GDES on daily
basis. The system compiles data and generates Cost Center wise equipment
cost booking reports. These reports help site management team to control
equipment deployment.

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Salient reports produced from this system are

Monthly equipment deployment and POL consumption

Equipment deployment plan

Equipment maintenance schedule

Equipment Utilization CCTR wise

Equipment efficiency report

Equipment wise maintenance cost

Equipment rent charging report

CCTR wise equipment utilization hours ratio


GDES Flow Chart is attached as Attachment 3.6

3.5

SMART (System for Material Acquisition Retrieval and


Transfer)
SMART is an in-house developed software used for Procurement and Material
Management of Descon Supplied Material and Consumables. This software
consists of four modules ITEM CODING, MRP or INDENT,
PROCURMENT MANAGEMENT SYSTEM (PMS) and INVENTORY
CONTROL (ICON). The last module is not being used. Brief Introduction of
these modules is given below.

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3.5.1 Item Coding:


The Item coding module is used for maintaining a data base of complete
descriptions of all material to be used on the project. Its significant capabilities
are.

Flexible coding structure.

Scheme Association at any group level.

Defining attributes catalog.

Accommodating up to 40 characters numeric code.

Description driven selection of code.

Defining different groups, sub groups, material type, and item type on
the basis of acquired information, which classifies different items
(Consumable's, Fixed assets etc.).

3.5.2 MRP and Indent:


MRP module is to assist in generating requirements, which are to be used in
the Project. Information on the requirement of material from the proposal
working is used in preparing the MRP. This classifies the month wise
consumption of all material and consumables. After approval these
requirements are transferred into the PMS module and procured.
Standard features includes:

3.5.3

Indent Main

Indent Viewer

PMS (Procurement Management System):


The PMS Module caters for:

Requirements Status (Initiated from INDENT/MRP)

Enquiry Management.

Quotation Management.

Comparative Statement Preparation.

Purchase order (Split order vendor wise, Change order, Repeat order).
The Vendor Management system is also a part of PMS. It facilitates addition,
modification, and deletion of vendors from the system. Allows paperless
integration of supplier performance, history measurement, supplier
management and tracking / tracing.
SMART process flow is attached as Attachment 3.7
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ACCPAC
ACCPAC is an off-the-shelf package consisting of various modules to perform
different financial functions.
ACCPAC consists of the following modules:
AP-Accounts Payable
AR-Accounts Receivable
GL-General Ledger
JC-Project Accounting , used for job costing
PO-Purchase Order It is used for receiving information on purchase orders
issued in SMART
IC-Inventory Control It is being used for all transactions in the Descon
Material Store
SM-System Manager for System Administration and error tracking
These modules are described in detail in the Financial manual.

3.7

System integration
For the overall integration of the system please refer to the flow chart at
Attachment 3.8
For most of the systems, to integrate them with each other, Electronic Import
and Export routines are used. For example, the Actual Man hours entered in
GDMS are exported from GDMS as a text file. The same text file is imported
in PROCeSs. Likewise PROCeSs is integrated with P3 using the same
technique and the Level-III plan is imported into PROCeSs as a text file.
PROCeSs is also capable of importing BOQ, BOM, Field Change
Requirements in the BOM, Client Stock, and Consumable data from
ACCPAC-IC .

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CHAPTER 3 (Attachments)
1) DCS Flow Chart

Attachment 3.1

2) DPMS Flow Chart

Attachment 3.2

3) MMS Flow Chart

Attachment 3.3

4) ITS Flow Chart

Attachment 3.4

5) GDMS Flow Chart

Attachment 3.5

6) GDES Flow Chart

Attachment 3.6

7) Smart Flow Chart

Attachment 3.7

8) Flow Chart Planning & Monitoring

Attachment 3.8

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CHAPTER 4

Pre-mobilization Planning
For a project to progress satisfactorily in its earlier phases it is necessary to
start the planning activities as early as possible. It is desirable to have a period
of three to four months for the initial planning before actual mobilization to
site. This period of pre-mobilization starts from the time when assessment of
interaction with the client indicates that there is a strong likelihood of the
contract being awarded to Descon. The individual pre mobilization activities
are described in the following paragraphs. Please refer to Attachment 4.1
flow chart for pre-mobilization planning

4.1

Contract Award
After evaluation of bids it is usual for the client to shortlist the contractor for
awarding the job and to issue a Letter of Acceptance (LOA) or Letter of Intent
(LOI) to the contractor. This letter is advance intimation to the selected
contractor of the customers intention to award the project as per the
Conditions of the Contract. It may be addressed to the Proposal Manager,
Head Business Development, or the Head of the relevant Business Area. The
recipient acknowledges receipt of LOI/LOA. Most projects are to be carried
out against tight time schedules and this practice of issuing the LOI gives
advance notice to the contractor to start preliminary planning in order to
reduce the reaction time that would be required after award of the contract. It
enables the contractor to start early mobilization of resources that would be
required to carry out the project.
After issuance of the letter of intent or award of the work and before signing
of the contract, the Proposal Manager ensures that any variations between the
contract and the tender requirements are resolved and documented. The
Contract Document is thoroughly reviewed by the Proposal Manager before it
is signed. After the review, Proposal Manager or any other person nominated
by the Executive Management signs the contract on behalf of the Company.
Contract agreement normally includes

Letter of Acceptance and Letter of Intent (whichever applicable)

The Tender

Conditions of Contract

Specifications

Drawings

Bill of Quantities

Minutes of Pre-award meeting with client

Project Master Schedule

Other such documents that are intended to form the contract.

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Selection of Site Manager and Core Team


Although it is desirable that the Proposal Manager be subsequently assigned
as the Site Manager / Project Manager / Project Sponsor for the project, this
may not always be possible on account of other requirements within the
company. In case the Proposal Manager is not nominated as the Site Manager,
he hands over a copy of the contract, together with all the relevant documents
to the Business Area Head or the person authorized by the BA Head to receive
them. Please refer Attachment 4.2 list of documents to be provided by
Proposal to BA.
The Business Area head in consultation with Head HRD and other BA Heads
decide the person who is to be assigned as the Site Manager for the project.
The person selected for this assignment has to be technically capable for
understanding the project and of leading the project team in achieving the
project objectives in a safe manner, within the agreed budget. He also has to
be familiar with the companys procedures and project management systems.
Once the Site Manager has been selected, the Head BA in consultation with
him, select the other members of the Core Team for the project. These would
be the Planning and FEDC Manager, Construction Manager and/or the main
Discipline In-charges. These individuals could be selected from the resources
available within the company or from outside.

4.3

Gather Core team and start training


As mobilization to site takes time, the available facilities within the
companys offices are utilized and members of the core team are located there
to start their familiarization with the project. During this phase the head PMS
department provides stewardship to the core team in pre-mobilization
activities. The Site Manager and Head HRD select individuals for assignments
as Planning Engineer, FEDC Engineer, I/C QC, I/C P&A, I/C E&P, I/C
Stores, and Financial Controller. They are included in the team as soon as they
become available. In case some individuals are inducted from outside the
company or are going to be assigned to functions that they have not performed
before, then they are given the necessary training. PMS arranges this training
with the support of the relevant BSD.

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Understand scope of work,


The members of the core team start review of the complete set of documents
that have been received from BA head. During this review they get a thorough
understanding of the overall scope of work. Descon and Client responsibilities
are also identified and clearly understood. If any clarifications are required in
this regard the Proposal Department is contacted and if the issue is not
resolved then the Client is contacted. Assumptions made about the clients
work permit procedures at the site are re-confirmed After clarifications have
been obtained. The finally understanding is documented and provided to all
members of the team.

4.5

Comparison of Bid and Contract


After having understood the scope of work the team starts comparison of the
Bid and Final Contract documents. In some case the client may have included
some provisions in the final contract that are different from the basis used for
preparation of the bid. At this stage a list of items should be drawn which
could be cost adder and must be under close vigilance by all concerned or
there may be some items to earn more revenue.

4.6

Determine impact on costs


At times some last minute discounts may have been made for which the
financial implications have not been fully analyzed and incorporated. The
objective of this review is to understand all these differences and determine
how they are to be tackled.
Once the differences in the Final Contract and the Bid have been identified
some members of the team with a financial background are assigned the task
of evaluating their impact on costs. The impact on the budget and cash flow of
the project is studied and analyzed. In case the impact is significant then the
original correspondence is reviewed to see if there was some exception
claimed while submitting the proposal on account of which the client can be
asked to revise the terms of the contract.

4.7

Revisit Execution Strategy


Members of the core team review the execution philosophy to see how costs
can be reduced. The following are some of the items reviewed.

Procurement of Descon supplied material from more economic sources


Sub contracting work packages
Execution methodology keeping in view the efficient deployment of
E&P.
Adoption of mechanization where it can reduce costs
Hiring or purchasing of equipment and plant
Mechanism of setting up the site camping facility and the Temporary
site facilities

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Enquires are floated to get more realistic price estimates for the procurement
of material and its delivery at the site. Similarly quotations are obtained from
other possible vendors for equipment required at the site. Methodology of
performing major jobs is reviewed to see how costs can be reduced. Efforts
are made to more extensively utilize Descon owned equipment that may now
be available in time for the project needs. E&P department is contacted to
confirm availability of Descon owned resources planned to be utilized at the
project and to see if additional Descon owned equipment could now be used
in place of hired equipment. Alternate options are considered and evaluated
for subcontracting out additional portions of the work. The following
advantages can be expected from sub contracting

Lower direct and indirect costs

Improvements in project schedule

Sparing companys resources for other more productive utilization


Avenues for obtaining manpower at cheaper rates than considered in the
proposal are explored. After having analyzed the contract the individual
members then come up with their recommendations on how the project
execution strategy should be changed so that costs can be optimized. Once all
the proposals have been reviewed, the team leader draws up the overall
execution strategy for the project.

4.8

Review and revision of WBS and OBS


Keeping in view the formulated execution strategy members of the core team
review the original WBS and OBS. Some changes shall be necessary for
revisions that may have been made in the subcontracting strategy. It is also
likely that some changes shall be required keeping in view the capability of
the individuals available for deployment to the project.

4.9

Revise budget and cash flow forecasts


The financial impact of any changes in the execution strategy such as revision
in the subcontracting criteria is combined with any differences found in
comparing the final contract and the bid. The overall impact of these changes
is then used by the Planning and FEDC Manager to prepare Rev 1 of the
budget. The cash flow forecast is also revised accordingly. These are then
reviewed by the Site Manager and sent to the BA head for approval.

4.10 Revision of Level 3 Plan


Keeping in view the additional information now available the level 3 plan is
reviewed in detail to see if any changes are required. It is possible that some
adjustments have to be made to allow for some delayed deliveries. Once these
changes have been incorporated a revised level 3 plan is prepared. In case the
changes are likely to have a cost impact or in the worst case an impact on the
overall project schedule these are discussed with the Head of the BA. Some
clients require that all revisions on the level 3 plan are communicated to them.
Their approval of plan revisions is obtained if required.
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4.11 Revise Manpower Histograms


Some revisions in the execution strategy and the Level 3 plan might have an
effect on the manpower histograms. These are re evaluated and new
histograms printed to correctly assess the overall and craft-wise manpower
requirements.

4.12 Prepare 3-month look ahead


In order to carry out more detailed planning the procedure adopted is to take
the first three months of the project and review the requirements of materials
equipment and manpower for the activities planned in it. This 3-month look
ahead plan is prepared on Primavera by the Planning Engineer and is reviewed
by the Planning and FEDC Manager and the Financial Controller. It is then
jointly reviewed with the Discipline In-charges, Construction Managers and
Site Manager and finalized. Preparation of this look ahead plan enables
accurate estimation of resource requirements during this period and allows
ample time for their arrangement.

4.13 Mobilization Plan


At this stage detailed plans are made for the mobilization activities that shall
be carried out at the site. This plan is to have the time schedule for building up
of the site facilities, arrangement of manpower and equipment. Although the
Mobilization plan shall vary from project to project the timing and duration of
the following salient activities is addressed in most of them.

Kick of meeting, both internal and with client

Mobilization of key personnel

Procedure for visa and security passes

Deployment of indirect staff

Deployment of direct staff

Hiring of technicians

Preparation of documentation for WPS/PQR and WQT

Welder qualification testing

Preparation of subcontracting packages and floating of enquires

HSE manual submission and approval

Project Quality Plan submission and approval

Tools and tackle procurement and certification

Equipment and plant deployment

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Possession of camp

Setting up of camp facilities

Provision of utilities at camp

Possession of site

Survey and trial excavation

Fencing of site and grading of area

Setting up of offices

Setting up of workshops

Setting up of lay-down area

Setting up of Client Material Store and Descon Warehouse

Provision of utilities, toilets, sewerage system, power generation and


distribution

An example of a typical mobilization plan is available at Attachment 4.3


Examples of equipment and manpower deployment schedule are included as
Attachments 4.4 and 4.5

4.14 Appoint Mobilization Incharge


One of the members of the core team is now appointed as the mobilization
incharge. This function is covered under the title of Incharge Site set up in the
job descriptions. He will normally be the first individual who will move to the
project site.

4.15 Configure Project Management Systems


As most of the members of the site team are now available in the premobilization office the Project Management System is now set up there and
configured to give the individuals hands on experience of using the system.
The Business Area arranges hardware required for this purpose. Data
available for the project is populated into the system. Data from the P 3 plans
is imported into the DPMS module of PCS. Similarly the GDMS and GDES
systems are also loaded. SMART and ACCPAC are also configured by the
respective users. The Planning and FEDC Engineers try out the DSTS and
DCS modules while the I/C QC tries out the ITS module. The I/C stores check
out the MMS module and ACCPAC Icon while the Financial Controller
checks out the other ACCPAC modules. I/C P & A & I/C E&P check put the
GDMS and GDES systems.
This exercise has many benefits.

Gives the individuals confidence in the capabilities of the hardware


and the systems selected

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In case there are some bugs in the system they can be identified and
rectified

Makes all the members familiar with the work of this project

Allow the team members to interact and develop as a team

Saves time in setting up the system after it is located to site.

4.16 Prepare MRP


The Planning engineer and the FEDC engineer now look at the scope of work
and prepare the outlines of the overall material requirements. The schedule for
the delivery of the items identified is worked out keeping in view the
customers approval time. It should also be kept in mind that un necessary
funds should not be blocked in inventory while at the same time ensuring that
material shall be available when it is required. The Planning & FEDC
Manager makes the material requirement plan with assistance of Planning
Engineer and FEDC department using SMART.

4.17 Prepare HSE Plan


The HSE plan is prepared by blending the companies standard practices with
the site related conditions and client requirements. The table of contents of a
typical HSE plan is available at Attachment 4.6. During the pre-mobilization
phase resource requirements are identified, arrangements made for their
timely delivery, and Risk Assessment studies that are required for the project
are carried out. For further details on the preparation of the HSE plan please
refer Chapter 11 Article 4.4

4.18 Prepare Project Specific Method Statements


Generic method statements can cover most of the activities of a project.
However there are some activities that require specific method statements to
be prepared. It is desirable to have the relevant Discipline In-charges review
these activities in detail and draw up method statements for them. In case the
Discipline Incharge for that activity is not available at this stage then the
FEDC engineer shall be responsible to prepare the method statement. These
can be drawn up in consultation with relevant discipline experts. Most of the
heavy lifts and complex activities shall be covered under Specific Method
Statements. It is customary for some clients to ask for the method statements
submitted in advance of the work.

4.19 Prepare Rigging Studies


Some Rigging Studies would have been prepared during proposal stage for
heavy lifts. These are reviewed keeping in view all additional information that
may have become available. It is possible that the equipment stipulated earlier
may not be available or the expected conditions at the site may have been
found to be different. All of these are considered by the E&P incharge and
revised studies are prepared. Studies are also prepared for the smaller lifts.
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4.20 Prepare WPS and Quality Plan


After having studied the work scope and the customers requirements I/C QC
prepares the Project Quality Plan for the project. The Welding Procedure
Specifications and Procedure Qualification Records are also prepared. For
details please refer to Chapter 11 articles 11.4.3, 11.4.5 and 11.4.8

4.21 Schedules for Client Deliverables


With projects of this nature it is usual for the engineering work to be
continuing well into the period when construction activity will have started.
The time schedule of construction activity is entirely dependent on the in time
delivery of drawings, specifications and client supplied materials. For this
reasons it is essential to discuss the schedule for the receipt of all client
supplied material and drawings and then come to a written understanding on
this. This can then be referred to and followed up. In case drawings delivery is
delayed the client can be asked for suitable compensation or relaxations.

4.22 Summary
The total inputs required for proper pre-mobilization planning from Proposal
and Business Area have been tabulated overleaf. The actions taken in this
phase and the responsibly for carrying them out are summarized in the central
box The outputs for use of the Site Management are listed in the box on the
right.

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PROJECT PLANNING & EXECUTION MANUAL

Pre Mobilization Planning


Input

form

Proposal/Business Area

Process

Responsi
bility.

Project Team

Output

form

to Site Manager

As submitted bid. Tech & Commercial doc

Understand scope of work,

PLFEM

Evaluation of proposal working

report

ITB Complete

doc

Understand Descon and client responsibility

PLFEM

Revised level 3 plan

P3

Level 3 plan, with Manpower loaded

P3

Analyze proposal working

PLFEM

Mobilization plan

P3

Mapping of BOQ and CCTRs.

excel

Compare final contract document with Proposal

PLFEM

MRP for material and consumables

SMART

CCTR wise Manhours and Quantities, excel

Determine impact of any changes in the above on the project, PLFEM

Configured Project Monitoring Systems PCS

WBS,

excel

Resource loading on level 3 plan, Material & Consumables

Proposal for budget Rev 1

Organization chart

Plng.

excel

excel

Revise level 3 plan if required

Plng.

Organization chart

excel

Mobilization Plan.

P3

Prepare MP histograms at Supervisor level

Plng.

Project specific documents

doc

Deployment Plan Direct MP

doc.

Revise WBS and OBS if required

Plng.

Method Statements

doc

Deployment Plan Indirect MP

doc.

Review of budget R 0

PLFEM

Schedule of Client deliverables

excel

Deployment Plan Equipment & Plant

doc.

Prepare MRP for material and consumables

Fedc

Direct Materials and Consumables

doc.

Prepare detailed mobilization plan

PLFEM

TSF details

doc.

Appoint mobilization incharge

SM

Budget Rev 0,

excel

Prepare project specific docs. viz. HSE plan, PQP, WPS

Resp.

Cash Flow,

excel

Prepare Method Statements

DIC

WINBid reports

excel

Configure Project Monitoring Systems

Resp.

Correspondence with customer

doc

Finalize schedule of deliverables with client

Fedc

Contract document

doc

Start arrangements for mobilization activity

Plng.

Quotations received

doc

Order first batch of deliverables

PLFEM

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CHAPTER 4 (Attachments)
1) Premobilization Planning

Attachment 4.1

2) List of Document from Proposal

Attachment 4.2

3) Mobilization Plan

Attachment 4.3

4) Equipment Deployment

Attachment 4.4

5) Indirect Manpower Deployment

Attachment 4.5

6) Project HSE Plan

Attachment 4.6

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CHAPTER 5

Mobilization
A lot of resources and efforts are required to start a new project in a timely
and cost effective manner. Mobilization means, to move and muster all the
resources required for the project and gear up for performing the job. The
period between award of the project and its starting date, as given in contract,
is called the Mobilization Period. It varies from project to project depending
upon the size of project, the contract conditions and total duration of the
project.

5.1

Site clearance
The first activity to start at the site after taking it over is to clear it up for
eventual setting up of the project and the temporary site facilities. It is planned
in advance, as all other activities at the site are dependent on it. Owing to the
large areas of most sites the clearance is arranged in a sequential manner so
that the area where the temporary site facilities are to be set up becomes
available while work on the other areas continues.

5.2

Arrangement of site facilities


Once the site clearance has progressed satisfactorily, work of setting up the
Site Facilities is started. This includes the following:

Residential Facilities

Project Site Facilities

Workshops and Yards

Stores / Warehouses

Lay down / Storage Area

LAN Architecture and Communication Infrastructure

QC Laboratory

E&P Workshop and Generator Rooms

Concrete Production and Testing Facilities

Establishment of Communication Mode


Generally site facilities are constructed through local sub-contractors.
Standard drawings and specifications are available that can be modified as per
requirement. Standard sub-contracting procedure (as described in detail in the
Contracting Manual) is adopted for pre-qualification of sub-contractors and
job is awarded after inviting and receiving an appropriate number of
quotations and reviewing them. I/C Site Set up is responsible for looking after
all activities related to establishment of site facilities.
Incharge Site Set up carries out final inspection of the facilities before these
are handed over to the site.
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5.2.1 Residential Facilities


Residential facilities comprise Dormitories, Barracks, Mess, and Kitchen for
Direct and Indirect staff at the project. These are built on the land arranged for
the purpose. For design and typical BOQ detail for residential facilities please
refer to the Project Site Facilities Manual and PP&A/SOP/02 Section A.
5.2.2 Project Site Office
Project Site Offices are the main offices where the Site Manager and other key
persons are placed. These can be located together or at respective work
locations / site. For typical design and related information please refer to the
Project Site Facilities Manual.
5.2.3 Workshops and Yards
Workshops and yards are established depending upon the scope of work at the
project. For typical design and related information please refer to the Project
Site Facilities Manual.
5.2.4 Stores / Warehouses
Stores and Warehouses may be built in temporary structures or by using porta
cabins. This shall depend upon nature of project and the quantity of material
to be stored. For typical design and relevant information please refer to the
Project Site Facilities Manual.
5.2.5 Laydown / Storage Area
Requirement of Laydown/Storage Area depends on the quantity of material to
be handled. The area is generally selected close to the Store / Warehouse / or
Fabrication shop so that there is minimum handling of material. For typical
design and other relevant information please refer to the Project Site Facilities
Manual.
5.2.6 LAN Architecture and Communication Infrastructure
PP&A at site establishes communication infrastructure by providing
telephone, fax and e-mail facilities for fast communication.
Local Area Network (LAN) is required to share data amongst various project
management systems in order to avoid duplication of data entry and to make
systems operate efficiently and intelligently. In order to establish LAN facility
at project site, System Administrator studies various networking options for
example peer-to-peer, server based etc. depending upon extent of network
required, total number of computers to be connected, site layout, budget
provision etc. System Administrator prepares cost estimates for different
options and seeks approval from the Planning and FEDC Manager & Site
Manager. Upon approval System Administrator department establishes LAN.
5.2.7 QC Laboratory
A Quality Control laboratory is established at site to facilitate Quality Control
inspections and tests. QC laboratory is equipped with all required equipments
and apparatus. The layout of QC lab depends upon the nature of tests to be
performed. I/C PSF is responsible for establishment of QC lab in accordance
with the approved design and specifications.
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5.2.8 E&P Workshop and Generator Rooms


Layout of E&P Workshop and Generator Rooms depends upon number of
equipment to be deployed at site. Details of these are available in the proposal
working. I/C PSF is responsible for construction of these facilities at site as
per approved design.
5.2.9 Concrete Production Unit
For civil projects concrete production unit or Batching Plant is required for
preparation of bulk concrete. Drawings for foundation and other facilities
related to Batching Plant are available with E&P department. These facilities
are developed at beginning of the mobilization phase so that Batching plant is
commissioned before start of concrete works. Alternatively if an alternate
source is available for supply of premixed concrete then it may be utilized if
an overall saving can be achieved.
5.2.10 Security Arrangement
Property and Personal Security is ensured by installing security gates, fences,
security posts, lighting arrangement etc. Contacts with local law enforcing
agencies are maintained to avoid security risks. For further details please refer
to PPA/SOP-02 Section B.
5.2.11 Utilities
Electrical network, Water and sanitation arrangements, Camp market,
Recreation halls, Indoor and outdoor Sports facilities are provided to maintain
healthy and comfortable living for the direct and indirect staff to be stationed
at the site. In some contracts the Client also desires to have the contractor set
up facilities for their use at the site. Details of the facilities required are
available in the proposal working.

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Commission Security arrangements


Incharge Personnel and Administration is responsible to provide foolproof
security to the company employees and property at the project site. The
following steps are taken in this regard:
1. Security personnel are deployed at the gates of the camp and at other
sensitive areas. The security staff at project sites consists of:
01
Security Supervisor
Head Guard (Shift Incharge) 02 (Day / Night)
02 (Day / Night)
Security Gate Clerk
Security Guard
As per requirement.
2. Access to the project site is allowed only through the main gate. Only the
persons who display the Company Identity Card, Visitor Entry Card or
show the Temporary Security Card will be allowed to access the project
area.
In addition to the above security measures Gate Passes will be issued to
control the incoming and outgoing machinery, tools, plants, equipment and
material. For further details please refer to PPA/SOP-02 Section B.

5.4

Set up Stores for Descon material and Client Material


Warehouse
Once the basic physical facilities have been built the Client Material Store and
Descon Warehouse are prepared for operation and receipt of material. Some
of the Staff for these functions is also mobilized early so that they are ready to
take material and issue them as required. It is desirable to have the project
monitoring systems operative as early as possible for the entry of the Bill of
Material into the MMS module and the preparation of the MRP for the
project. Similarly the ICON module of ACCPAC shall be used for the Descon
Store and it should also be set up. In case there is some delay in
commissioning of these systems then alternate manual records have to be
maintained for the interim period but these must subsequently be entered into
the systems as soon as they become available.

5.5

Arrange indirect manpower deployment


The estimation of indirect manpower is based on the direct manpower
requirement. This estimation is also done during the bidding stage and is
accordingly included in the budget of the project. Sourcing of manpower is
also considered while preparing the bid keeping local conditions and
availability in view. These assumptions are rechecked in the pre-mobilization
stage considering latest information and revised if deemed appropriate. As
soon as the project is awarded, a mobilization schedule is prepared for the
indirect staff and the personnel are mobilized as per the schedule.
Please refer to Attachment 4.5 Manpower Deployment Plan
The Site Manager works with the Business Area Head or through his
designated representative, to ensure timely allocation of human resources. The
requirement is conveyed to HRD through form HRD/FRM-03 The

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requirement of the indirect manpower is arranged by any or combination of


the following means.
1. Transfer of manpower from the DESCON Head Office or an oversea BA
to the project site.
2. Transfer of manpower from other project sites where the requirement of
personnel has decreased
3. If the required manpower is not available from the above two sources, the
same may be met through fresh recruitment. HRD advertises the job
vacancy in newspapers. A selected panel, appointed by the Site Manager,
interviews the candidates and suitable persons are selected.

5.6

Arrange direct manpower deployment


Direct Manpower is estimated at the bidding stage. This estimate is based on
the scope of work and the effort required to perform that job and is in the form
of month-wise manpower histogram for each craft. Like indirect manpower
the sourcing of direct manpower is also considered at the bidding stage and
certain assumptions are made to optimize costs. These are re-evaluated and
revised if some new factors have come up.
Direct manpower is hired by PP&A Department both at Head Office and at
job site. But in case, sufficient craftsmen are not available from local area,
some craftsmen are hired from other areas or hired and transferred from the
head office.

5.7

Recruitment
Four different types of recruitment is done in the company

Permanent

Management Cadre

Contract

Management Cadre

Permanent

Non-management Cadre

Temporary

Non-management Cadre

The permanent and contract employees are employed through HRD at Head
Office. Hiring of Management Cadre employees is done as defined in the
Hiring Policy of the Company HRD Policy- 02.
Temporary employment is done at the project site by the respective Incharge
Personnel and Administration (I/C P&A), and is authorized by the Site
Manager.
In case manpower is required in the Management Cadre, the concerned person
initiates the Manpower Request Form HRD/FRM-03 and gets it approved
from Site Manager. This is then sent to HRD through Head BA.

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In case of requirement of non management temporary staff PP&A FRM 17 is


filled out and given to I/C PP&A.
I/C P&A Site ensures that temporary employment is done according to the
provisions in the approved budget. The selection can be from any of the
following

Manpower Data Bank

Staff available from other Project sites

Applications against advertisement

Selection is based on past experience and performance while fresh candidates


are interviewed either at the site or in the head office.
Appointment letters are issued to the newly inducted temporary employees, by
I/C Site P&A. Personal files for all temporary employees are maintained by
the Incharge Site Personnel & Administration.
Appointment Letters are not required for workers employed on day-to-day
basis. Payment to such workers is made on the basis of their time sheets
payroll etc. as the case may be. Every temporary employee is entered in
GDMS / Establishment Register and Employee Number is issued accordingly.
If the services of temporary employees are required beyond the period as
mentioned in his temporary employment letter, an extension letter is issued by
Incharge Site Personnel & Administration as per requirement of project. For
detailed procedure of temporary appointment, refer to Hiring Policy
(Temporary) PP&A/SOP-07

5.8

Manpower Induction. Orientation


Manpower reporting at site is briefed about the companys procedures and any
site specific policies. They are given detailed instructions about the safety
requirements for working at the site and the rules to be followed in the using
the camp and other facilities.

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Set up staff attendance control facilities


All employees at project sites, punch their cards through Time Recorder / Bar
Coding Machine or mark their arrival and departure time in the attendance
register, as the case may be.
Up-to-date record of attendance is maintained at every project site for all the
employees, in order to ensure that all employees remain punctual and regular.
Besides the deduction of salary / wages of unauthorized long absentees /
latecomers, disciplinary action may also be taken as per rules.
The Incharge Personnel and Administration forwards the attendance reports
for all permanent and contract employees to the Incharge Administration at
the Head Office by 22nd day of each month. For further detail please refer to
PP&A/SOP-05
Leave record for all permanent employees is to be maintained by Incharge
Administration at the Head Office and that of all contract and temporary staff
by Incharge Site Personnel & Administration. For further detail please
HRD/Policy-09
GDMS
GDMS (Gainful Deployment of Manpower System) shall be set up at Project
Sites to monitor cost center wise actual man-hours consumed. It shall also be
used to record employee attendance and generate the payroll.
The Incharge Personnel and Administration Site prepare GDMS reports and
the daily input of actual man-hours is sent to Planning & FEDC manager to
calculate efficiency. Also, monthly GDMS reports are generated at site and
forwarded to the Project Manager and I/C PP&A Head Office.
Daily Attendance
The daily working hours of all direct employees are entered into the DSTS
sheets by the supervisors to keep record of the working hours and book costs
in respective cost centers. DSTS is filled by Supervisor of the discipline and is
approved by Discipline Engineers. In case of Special Overtime, the DSTS is
also approved by the Discipline Incharge/Construction Manager. Time office
keeps the relevant record after entering it into GDMS. For details on DSTS
please refer to flow chart for preparation of DSTS provided as Attachment 7.5

5.10 Arrange Equipment and Plant Deployment


The deployment of equipment and plant is arranged as planned in the
Equipment and Plant Deployment Schedule. The equipment is arranged by
following means:
a) Equipment available within the company is transferred to the new job site
after proper maintenance. Incharge E&P at site is responsible to coordinate with BA to arrange the required equipment as per schedule.

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b) If the equipment required for the site is not available within the Company,
the BA initiates CIR procedure to purchase fresh equipment. A buy vs.
rent evaluation is carried out and presented to the senior management for
approval in accordance with the limits of authority.
c) In case equipment required cannot be released from other sites, or is not
available within the Company, it is hired from any suitable supplier by the
BA and mobilized at site.
MD grants the approval for fresh purchase. A capital investment request is
raised, which is approved by the Executive Committee. The required
equipment is then arranged by Head E&P and dispatched to site.
Please refer to Attachment 4.4 Equipment Mobilization Plan. Also Read for
further details: Equipment Planning E&P SOP-02, Fresh Purchase of
Equipment and Plant E&P SOP 03, Hiring of Rental Equipment and
Transport E&P-MS-01.

5.11 Procurement of First Lot of direct Materials


Information furnished from Bid documents on Direct Materials is utilized for
procurement at Mobilization stage of the project. Additional detailed
information that is now available on material requirement is used for drawing
up the Material Requirement Plan. This is then used for deciding the delivery
schedules. I/C Warehouse arranges to raise indents and Site Manager
communicates material requirement to Head BA to procure and supply first
lot of materials to Site. In case the procurement function has been set up at the
site then site shall arrange procurement directly.

5.12 Negotiate and award Sub Contracts


Quotations received for work to be subcontracted are evaluated. Fresh
quotations are invited if felt necessary. The prices and terms are negotiated
and the jobs are subcontracted. For details of procedures to be followed please
refer to Contracts manual.

5.13 Set up project monitoring systems


The hardware for project monitoring system is set up at the site. Preloaded and
configured IT software are received from the pre-mobilization team.
Networking is hooked up and the system is commissioned. Data and
documents that are received from the customer are fed into the relevant
software modules. Data on expected dates of client-supplied materials is also
fed in.

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5.14 Determine resource availability


Now that the data on material availability has been fed into the system it is
compared against requirement for the first 3 months. This requirement and
availability comparison enables the Planning Engineers to recheck the
activities that can be carried out during these periods. They can now draw up
the detailed plans and define the targets to be achieved.

5.15 Prepare 4 week look ahead


The Planning Engineers then make more detailed plans for the first 4 weeks
out of the 3-month look ahead plan. In this the overall work front availability
is checked in terms of availability of the following
Work execution resources
1. Manpower (GDMS)
2. E&P (FAMS)
3. Materials (MMS)
4. Consumable (Icon)
Work support
1. Method Statement
2. QA/QC Documents
3. HSE/LP Gear
4. Work permit
5. Access, scaffolding, excavation, entry etc.
Keeping the availability of these resources activities are planned over this
period and the 4 week look ahead prepared for the first 4 weeks of the project.
This schedule is then provided to the Planning and FEDC manager for review
and finalization with the Site Manager and the Discipline Incharges.

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CHAPTER 5 (Attachments)
1) Equipment Deployment

Attachment 4.4

2) Indirect Manpower Deployment

Attachment 4.5

3) DSTS Flow Chart

Attachment 7.5

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CHAPTER 6

Organization
6.1

Typical Site Organization


It is quite likely that all of the personnel assigned to a new project site would
not have worked together on some earlier project and it will take them some
time to get used to the working conditions at this site. In order to make the
transition smooth and effortless it is desirable to have very similar
organizational set-ups on all of Descon projects. A typical site organization
chart was finalized after discussion in the Strategic Planning Meeting in
March 2004. This is included as Attachment 6.1
This typical chart is to be used as a template for drawing up site organizations
for individual projects. It is possible that for some of the relatively smaller
projects some of the functions may be merged and assigned to the same
individual but the basic concept is to be followed throughout the company.
The Site Organization is based on the philosophy of having central planning
concentrate on long term planning. This shall cover the level 3 plan, 3 month
look ahead and 4 week look ahead plans and their updation. The breaking
down of the 4 week look ahead into weekly plans and daily targets shall be
handled by the Area Schedulers under the supervision of the Discipline
Engineers and Discipline in-charges. It has been agreed that this system will
enable closer interaction between the Area Schedulers and the Discipline
Supervisors directly responsible for work execution

6.2

Responsibility Matrix
The responsibilities of the different site functionaries in performing various
planning monitoring and controlling functions at the site have been plotted on
a common matrix. This is included as Attachment 6.2

6.3

Job Descriptions
Keeping the typical site organization in view typical Site Job Descriptions
have also been drawn up. In these the concept of responsibilities part has been
written in such a way that it will give an overview of the responsibility of the
individual assigned to this position. Charts have been included in the JDs of
the key positions defining the key inputs this individual will receive from
others, the feedback that he has to provide and the outputs he has to produce.
The typical Site JDs are included as Attachments with this chapter. Listing of
the Job Descriptions is provided on the following page. They are arranged in
groups according to the type of function performed. For a quick reference the
Concept of Responsibilities for the functions are summarized in Attachment
6.3

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CHAPTER 6 (Attachments)
1) Typical Site Organization

Attachment 6.1

2) Responsibility Matrix

Attachment 6.2

3) Listing of CORs of all site JDs

Attachment 6.3

4) Site Manager

Attachment 6.4

5) Planning and FEDC Manager

Attachment 6.5

6) FEDC Engineer

Attachment 6.6

7) Planning Engineer

Attachment 6.7

8) System Administrator

Attachment 6.8

9) Quantity Surveyor

Attachment 6.9

10) Document Controller

Attachment 6.10

11) Planner, Discipline

Attachment 6.11

12) Central Material Controller

Attachment 6.12

13) Construction Manager

Attachment 6.13

14) Discipline Incharge

Attachment 6.14

15) Discipline Engineer

Attachment 6.15

16) Scheduler

Attachment 6.16

17) Discipline Supervisor

Attachment 6.17

18) Area Material Coordinator

Attachment 6.18

19) Financial Controller

Attachment 6.19

20) Incharge Contracts

Attachment 6.20

21) Cost Controller

Attachment 6.21

22) I/C QA QC

Attachment 6.22

23) I/C HSE

Attachment 6.23

24) I/C Descon Material Store

Attachment 6.24

25) I/C Site Procurement

Attachment 6.25

26) I/C Client Material Warehouse

Attachment 6.26

27) I/C PP&A

Attachment 6.27

28) I/C E&P

Attachment 6.28

29) I/C Site Setup

Attachment 6.29

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CHAPTER 7

Planning & Scheduling


7.1

Introduction
The purpose of Planning and Scheduling is to achieve project goals and
objectives through the planned application of resources to meet the projects
quality, cost and revenue objectives.
Following benefits are outcome of good planning and scheduling:

Gainful deployment of resources.

Eliminating surprises.

Earning good reputation in the business.

Better utilization of time.

Achievement of high cost efficiency.

At proposal stage, a fit for the purpose Level 03 Plan is prepared based on the
data available in the bidding documents using Primavera Project Planner.
Once the project is awarded the same plan is revisited or revised keeping in
view latest available information. This plan is prepared before mobilization to
project site. It covers all activities (also called Cost Center) in each area and is
resource loaded in terms of manpower. After approval this plan is frozen as a
baseline plan called the original plan and is used as a reference to compare
actual progress with original planned progress.
This original Plan is imported into the DPMS module of PCS. This
information available in PCS is used for carrying out detailed Level 04
planning and scheduling through DSTS. Actual achieved progress is entered
into DPMS daily through DSTS which allows comparison of daily planned
targets to actual achieved progress. Supervisor wise daily efficiency is
generated through the DPMS module and is made available to the Discipline
Engineer and Incharges for their review.
In the last week of every month the Level 03 Plan is updated by incorporating
actual progress and re-scheduling certain activities as per latest information
available. This new plan, called Latest Forecast Plan, depicts actual picture of
the project with a forecast of how things will be carried out in the future. This
LF plan is imported into DPMS so that the project progress can be compared
with original and LF plans simultaneously.

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Planning

7.2.1 Development of Three Month look ahead Plans


Succeeding three-months activities and targets are extracted from the Level03 plan to form a Three Month look ahead plan. This plan is prepared at least
one week before the start of the succeeding month. It starts at a point where
conditions are known and work can be planned in detail accurately for first
month of the period, with work for second and third months being dependent
on progress in the first and second months.
The Three Months look ahead plan explains in significantly more detail how
to achieve the desired amount of progress during this work period. It provides
guidance on how to organize the resources but their mobilization shall be
made with further confirmation of the work fronts through four weeks lookahead schedule. The Three Months look ahead plan is updated by the end of
every month by incorporating progress achieved during this month.
A sample Three Month Look ahead is enclosed as Attachment 7.1 while the
flow chart for preparation of the three month plan is at Attachment 7.2
7.2.2 Development of Four Week Look ahead Plan
Just as the Three Month plan was drawn from the level 3 Plan, a Four Week
look ahead plan is derived from the Three Months look ahead plan. This Four
week plan is developed by incorporating additional inputs from Client
regarding material and equipment availability and progress in associated
areas. This Four Week look ahead Plan includes detailed targets of progress to
be achieved in each discipline and becomes the basis of doing supervisor level
planning. Like the three month plan the Four Week Look ahead plan is also
rolled at the end of every week keeping in view progress during the week
completed.
For an example of a Four-week Look ahead plan please see Attachment 7.3
while the flow chart for preparation of the three month plan is at Attachment
7.4
7.2.3 Level 4 Planning
The Four Week Look ahead plan prepared by Planning and FEDC is reviewed
by the Discipline Incharge and the Discipline Engineers. They decide the
weekly targets for the individual supervisors in the group to meet plan goals.
These are then passed on to the Area Scheduler and Discipline Supervisors.
The Area Schedulers carry out daily scheduling at drawing level for each
supervisor. This day to day level 4 planning is done in the DPMS module of
PCS.

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7.2.4 Daily Schedule & Time Sheet (DSTS)


Daily schedule and Time Sheet (DSTS) is a very important document
generated from DPMS every day. Purpose of this document is following:

To convey to each supervisor drawing wise plan for the day as the
complete activity may take several days.

To report back progress and efficiency with which the targets for the
day were achieved.

To enable recording of direct man-hours on cost centers.

To facilitate comparison of gate attendance recorded through time


cards with the hours recorded by the supervisors ensuring that
manpower is only paid for the time they were available.

It is the responsibility of the Area Scheduler to prepare it and to ensure that


the DSTS is available to the supervisors first thing in the morning. He ensures
that only those items are included in the schedule for which all elements of
work front are available.
To be able to produce realistic and useful daily schedules the Area Scheduler
stays in touch with progress in the field and discusses it with the Discipline
Supervisors.
The supervisor performs the jobs as planned in DSTS and at the end of the
day fills in DSTS for progress and actual man-hours consumed.
The DSTS is filled in by the supervisors before the close of the day and is
handed over to the concerned Scheduler.
The Scheduler picks off progress from the filled out DSTS and feeds it into
DPMS. He sends the DSTS to the time office for entry of cost center wise
actual man-hours into GDMS by the timekeeper.
Please refer to Attachment 7.5 for graphical presentation of process flow
for DSTS and Attachment 7.6 for a filled out DSTS

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CHAPTER 7 (Attachments)
1) 3-Month Look Ahead Flow Chart

Attachment 7.1

2) 3-Month Look Ahead Schedule

Attachment 7.2

3) 4-Week Look Ahead Flow Chart

Attachment 7.3

4) 4-Week Look Ahead Schedule

Attachment 7.4

5) DSTS Flow Chart

Attachment 7.5

6) Daily Schedule Time Sheet (DSTS)

Attachment 7.6

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Field Engineering & Document Control (FEDC)


8.1

Introduction:
Field Engineering and Document Control is a very important function in
project execution as it acts as a repository of project specifications, drawings
and field engineering related information and documents at the site. The
function also ensures correct estimation of BOQ and BOM from drawings
their distribution to CCTRS and breakdown into workable package as per
WBS & OBS. It also provides field sketches/guidance to execution staff when
required, and arranges clarification of technical queries from the customer.
The overall flow of information through FEDC is described in tabular form in
Attachment 8.1

8.2

Document Control:

8.2.1 Receiving
The Document Controller receives all documents / drawings from the
Client/Consultant on behalf of the FEDC Engineer. The received documents
are checked for conformity according to the transmittal and in case any
discrepancy is observed with the transmittal the same is clarified with the
issuing office. Document Controller then enters all records regarding receipt
of drawings into DCS module of PCS.
The drawings are then estimated as described in 8.3.1 and marked up as
described in 8.3.2
8.2.2 Issuance
The marked up drawings are then dispatched to the relevant Discipline
Incharges through transmittals for planning their construction activities.
8.2.3 Revision control
At the time of entry of receipt of a drawing or document into DCS in case an
earlier version of the drawing had been received the system points it out. All
the persons who had been issued the earlier version are informed that the
drawing or document with them has been superseded and the new one is on
the way. This enables costly rework to be avoided. The new drawing is then
issued through a transmittal while the old version is withdrawn from site,
marked as SUPERSEDED and filed separately.

8.3

Field Engineering

8.3.1 Estimation
Keeping in view the workload with the Quantity Surveyors and the priority of
the drawing the FEDC Engineer assigns the drawing to a Quantity Surveyor
for estimation of its BOM and BOQ and Total Man-hours based on its BOQ
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using the norms for this type of work. These are the same norms that were
used in the bid preparation. After the estimation the drawings are also stamped
with the following information:
a. Cost Center-wise B.O.Q
b. Total Man-hours
c. Direct materials
d. Direct consumable
e. Whether the job is a B.O.Q item or Extra Work
Quantity Surveyor then enter B.O.Q of the drawings into DPMS and the
B.O.M into MMS.
8.3.2 Field marking of drawings
To facilitate shop fabrication and later field installation of piping, FEDC
Engineer reviews the drawings and prepares spool break down by marking the
field and shop joints. For electrical drawings cable cutting plans are prepared.
In case the client is providing drawings in electronic format the procedure
adopted is described in Attachment 8.2
8.3.3 Preparation of Field drawings and Test Packs.
FEDC Engineer prepares field routing drawings / sketches for small bore
piping. Field Engineer prepares For E&I discipline Field Engineer prepares
field routing drawings / sketches for cable trays and conduits etc. where ever
applicable. Test Packs of piping and loops are also prepared as per
requirement of P&IDs and piping lay out plans.
8.3.4 Method Statements Preparation and Submission
The FEDC Engineer coordinates the overall requirement of method statements
for the project. The requirement of method statements is communicated to the
relevant Discipline Incharges for preparing them. The prepared method
statements are then brought in line with project specific requirements and
submitted to the client with Site Managers approval. After clients
confirmation they are distributed under document control.
8.3.5 Material Submissions for approval.
The FEDC Engineer coordinates the submission of all material samples to the
client for approval.
8.3.6 Technical Clarifications
During course of execution of the project it is sometimes required to obtain
written clarifications from the client. This could be necessitated by any of the
following reasons.
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Error or omission in defining the scope of a deliverable

Error or omission in defining the scope of the project

Implementing a work around plan to overcome a difficulty


encountered during execution

When staff carrying out detailed planning or having the work executed feel
that written clarification from the client is required they will raise a QUERY
SHEET. See Attachment 8.3 (Form No. PMS/FRM-28)
The Query sheet would be forwarded to Planning & FEDC Managers
describing the problem. Planning & FEDC Manager shall log the QUERY
SHEET in his register and review the necessity of getting the clarification. If
the cause is found to be justified the QUERY SHEET shall be sent to the
client through the Site Manager. A reference number shall be maintained of
all QUERY SHEETS sent out. See Attachment 8.4 (PMS/FRM-29)
Planning & FEDC Manager shall follow up the client to get response to the
queries sent. He shall intimate the FEDC Engineer and / or Discipline
Engineer about client's response to the QUERY SHEET after it is logged in
his register.
In case the clients response would result in an increase in the scope of work
this is handled as defined in the procedure for extra work described in the
chapter 12.
8.3.7 Preparation of As Built Drawings
The FEDC Engineer monitors and records all deviation from drawings carried
out in the field. Subsequently he ensures preparation of as built drawings for
completing the project records and submission to the client
8.3.8 Tracking and Handing over of Documents
During the course of the project the FEDC engineer keeps track of the
movement of all documents. Salient amongst these are Technical Queries,
Material Submissions, Quality Dossiers, Record of holds and their release,
Record of equipment supplied and the clients acceptance Certificates. He also
consolidates all the documentation for handing over to the client as per terms
of the contract.

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CHAPTER 8 (Attachments)
1) Flow Sheet FEDC

Attachment 8.1

2) Procedure Handling Electronic Copies of Drawings

Attachment 8.2

3) Query Sheet

Attachment 8.3

4) Query Register

Attachment 8.4

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CHAPTER 9

Material Management
Material logistics and management are both very important elements in the
overall success of a construction project. Even marginal delay in the
availability of material can cause upsets in the project schedule. This could
require additional expenditure to make up for the delays and in the worst case
could result in imposition of penalties. In a typical construction project,
material management system caters for the procurement & inventory
management for material that is the contractors supply, as well as clientsupplied materials. They are handled separately as costs are to be accumulated
for the first category while the client-supplied materials are usually all free
issue. Their storage is also in separate independently staffed warehouses. The
facility for Client Material is called as Warehouse while the one for Descon
Material is termed as Store.

9.1

System for Descon Supplied Material


Material management function for Descon supplied material is handled
through the in house developed computerized System for Material
Acquisition, Retrieval & Transaction SMART
Following are the main functions of SMART.

Item coding

Material Requirement Planning MRP System

Material Procurement System

As complete details of all the material requirements are not available in the
early stages of the project, the periodic requirement of all the main materials
and consumables is taken from the proposal documents. This is fed into the
MRP module for drawing up the MRP.
Details on the capabilities of this software are provided in section 3.5
9.1.1 Sourcing
A comprehensive database of vendors / suppliers in Pakistan and Overseas is
maintained for sourcing purposes operating in the BA Office. Nature of
materials to be handled are steel plates & profiles, pipes & tubes, fittings,
valves, pumps, cathodic protection system, civil construction materials,
chemicals, process equipment, electrical & instrumentation materials, cable
trays, paints, oil & lubricants, etc.
9.1.2 Vendor Evaluation
All Vendors / suppliers are pre-qualified and approved by Incharge
Procurement and Incharge Q.A. on the basis of their:

Quality system

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Performance

Capabilities to provide the required products / services efficiently and


within delivery schedule time frame

Pre-qualified vendors list is maintained and updated as and when required but
at least once in a year, by Incharge Procurement. For detail on evaluation and
pre-qualification of vendors, please refer to Work instruction COMM-PROCMS-01 Sourcing and COMM-PROC-MS-02 Pre-qualification of suppliers
9.1.3 Purchase Order (P.O.)
Inquiries regarding Material requirement with complete technical
specifications are floated to prospective vendors, local/overseas as the case
may be and comparative statements are prepared for unit rates and other terms
and conditions for detailed analysis with regard to technical/commercial
aspects.
After approval of Comparative Statement, Purchase Order is prepared
according to the specification given in the indent in favor of the selected
supplier on specified format for local/overseas procurement, and approved by
the competent authority.
For the repetition of a requirement, a Repeat Purchase Order (RPO) can be
issued to the same supplier for the same item(s), on the basis of previous
Purchase Order, keeping in view the general market trend.
For bulk procurement of standard items and consolidated project specific
items, Rate Running Contracts can be established. Purchase Order against
RRC is issued on the basis of indent after getting approval from the competent
authority.
A Change Order is issued, whenever a variation occurs from the original
Purchase Order e.g. cancellation of P.O., changing of specification, quantities
or price.
For further detail please refer to the following.
COMM-PROC-SOP-01 purchasing
COMM-PROC-SOP-02 Import of goods
COMM-PROC-SOP-03 Export of goods
COMM-PROC-MS-03 Purchasing
COMM-PROC-MS-04 Implementation of procurement through SMART

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9.1.4 Delivery Challan


After placement of Purchase order, materials are dispatched to designated
destination. Delivery Challan (D.C.) is prepared and original copy along with
the copy of Purchase Order and Transit receipt, if required, is sent with the
material being dispatched.
Copy of the Delivery Challan will be acknowledged by the respective Store as
a token of receipt and is forwarded to Finance Department along with
accepted material report AMR for release of payment to the vendor. In case of
any shortage or damage, Procurement department takes necessary action for
its replacement etc. with the supplier.
9.1.5 Material Loading, Receiving, Inspection, Stacking, Issuance and Return
(AMR, SIR, MRN)
Rigging Study is carried out prior to loading and unloading of items of
equipment heavier than 10 tons in order to ensure safe handling. Cranes and
tools and tackles are inspected before carrying out loading and unloading
activities and Site location, and landing area are properly cleared while
loading and unloading activities are undertaken. For heavy equipment /
material, arrangements of crane / rigging tools are made with the help of E&P
to ensure safe and proper unloading. Receiving area is established at all site
stores and identified as per relevant color codes defined for project
The material will be received along with Purchase Order, Delivery challan and
(MTC). On receipt of the material at the main gate, I/C Security shall enter
brief description of material in a register maintained by him. At Project Site
Inward Gate Pass is prepared by the security staff. Store receives the material
on the basis of accompanying documents and arranges unloading of the same
in the receiving area. Daily material receiving report is prepared by Store
All materials received are inspected by QC for every consignment of
transferred material, on the basis of accompanying related documents.
Accepted Material Reports (AMR) or Fixed Asset Receiving reports (FARR)
are prepared for accepted material and Stacking of material at appropriate
place(s) in the store with tags for identification. FARRs are processed in the
Fixed Assets Management System(FAMS)
Materials allocated to the project are divided into five broad categories for
ease of reference.

Project Specific Items

Standard Consumables and Loss Prevention

Equipment and Plant Items

Tools

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Fixed Assets

Computerized inventory records are updated at site to facilitate hand on


information for ready reference
Site issue requisition (SIR) are prepared by concerned Area Material
Coordinators and authorized by the Central Material Controller. Material is
issued against approved SIR. This document has the following Information

Complete description of material and consumables.

Quantity required (in figures / words).

Project No. / Job No.

Drawing Number

Area reference

Cost center.

Expense head.

Consumer code (in case of subcontracting).

Signatures of the authorized person.

Issuance records are updated in Store System in use at the site (This may be
in-house built software NStore or ACCPAC Icon) after issue of material.
Any excess material left after completion of specific work is returned to Store
on Site Return Note (SRN) duly filled bearing the signatures of the authorized
person.
Stores personnel checks the material, segregate it and update record for all
returned materials.
For further detail, refer to
COMM-STORES-SOP-01 Identification traceability indenting
COMM-STORES-SOP-01 Material movement
COMM-STORES-SOP-01Physical inventory
COMM-STORES-MS-01 Handling of Descon Material

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Client Material Handling


Client material deliveries are monitored by Planning and FEDC. The receipt
of the material can be either as shipments accompanied with their packing lists
or the material could be issued from Client Warehouse at the site. In either
case after receipt of the material and its acceptance, its status is updated in the
MMS software. Standard procedure for Material loading, receiving,
inspection, stacking, issuance and return as in use for Store management are
employed.
For details refer to COMM-STORES-MS-02 Handling of Customer Material

9.3

Reconciliation Reports
Material that is handled at site either through Store or Warehouse is reconciled
at completion of the project. The Warehouse Incharge and the Central
Material Controller are responsible to carry out the reconciliation. Materials
left over from Client Warehouse are returned to client through Material return
Note (MRN) and a final material reconciliation report is issued by client
declaring that there is no variance regarding material supplied.
Similarly material handled through Store is reconciled against issuance record
and Physical inventory is carried out in order to demobilize / shifting of
material at the completion of project. The Stores incharge and the Central
Material Controller are responsible for this reconciliation.

9.4

Disposal of Surplus Material


Any unserviceable, surplus and scrap materials / equipment is disposed off
from the inventory and only serviceable / useable items are kept in stocks.
Disposing off surplus material is not kept pending until the demobilization
stage as it is a continuous process, and must go on during the entire length of
the project so that demobilization phase is smooth and prompt.
Incharge site store initiates the Disposal and Write Off Request, duly signed
by the Project Manager after the material has been inspected by the concerned
representative from QC/E&P/PP&A and is declared scrap/ surplus, and then
forwards it to Head Office for obtaining approval of the competent authority.
Write-off Note is prepared and processed for each lot of material that is
disposed.

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CHAPTER 10

Monitoring of Progress
All progress measurement at site is dependent on the information collected
from the daily schedule and time sheets (DSTS) This is then processed in
DPMS and GDMS to generate progress and efficiency reports. For the overall
scheme of progress measurement please refer to flow chart for progress
monitoring provided as Attachment 10.1

10.1 Concept of Earned man-hours


As defined earlier in chapter 2 earned man-hour is the amount of work
executed in terms of standard man-hours. At proposal stage total man-hours
are calculated by multiplying the CCTR quantity with unit man-hours and
difficulty factor. The unit man-hours multiplied by the difficulty factor used at
the proposal stage are frozen after award of contract and are called standard
man-hours per unit.
As an example we assume that against CCTR 23120 CS pipe fabrication 02
man-hours are required for 01 DI of welding. There is total 2000 DI Welding.
So the total budgeted man-hours to achieve 100% progress on CCTR 23120
are 4000. At any stage of the project if 500 DI are earned using 1200 actual
man-hours. The earned man-hours are therefore calculated as Earned Quantity
X Standard man-hours per unit i.e. 500 X 2 = 1000. The achieved progress is
thus (Earned man-hours / total budgeted man-hours)X100) i.e. (1000 /
4000)X100 = 25%. Efficiency is calculated by dividing Earned man-hours by
actual man-hours i.e 1000/1200 = 0.83.
DPMS has the capability to calculate and report progress and efficiency at
Project, Area, Discipline and CCTR level.

10.2 Estimation of Progress


The supervisors report actual progress / quantities and man-hours daily by
entering it on their DSTS. Area scheduler shall ensure that the daily progress,
as received on DSTS, is checked and accurately entered in the DPMS system.
DPMS calculates achieved progress on the basis of earned man-hours. This
also enables the area schedulers, discipline engineers and incharges to monitor
the daily targets / planned quantities with actual achieved quantities and
planned man-hours with actual man-hours.
The Time Office enters actual Man-hours from DSTS into GDMS system.
Actual Man-hours are then imported into DPMS from GDMS. DPMS also
calculates the efficiency by comparing earned and actual man-hours.

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Progress and Efficiency Control


- Following Progress and efficiency reports are generated from DPMS.

Project Top Sheet

PMS/FRM-04 (Overall)

Project Top Sheet

PMS/FRM-05 (Discipline wise)

Man-hours Analysis Report

PMS/FRM-06 (This period/To-date)

Consumables Analysis Report

PMS/FRM-07 (For Mech. Projects)

Direct Material Analysis Report

PMS/FRM-08 (For Civil Projects)

- Reports prepared from other packages are

Bottlenecks Report

PMS/FRM-13

Daily Diary

PMS/FRM-12

These reports formats are attached as Attachments 10.2 to 10.9


Site Manager, Planning & FEDC Manager, Construction Manager and
Discipline In-charges analyze these reports. Corrective actions are initiated on
the basis of these reports so that contractual targets are met without affecting
the cost and budgeted margins.
10.4

Progress up-dating
Achieved progress in terms of %age in P3 Schedule is updated at the end of
every month as per report generated from DPMS called report to update P3.
After progress-updating P3 reschedules activities that could not be started on
time based on linkage with predecessor activities. This updated plan is
compared with Original/Target Plan to see whether contractual milestone
dates are shifted or not. In case these have shifted, the reasons are discussed
and if decided the targets are restored back to the contractual dates by revising
strategy. In case the change in schedule is attributable to client, cost impact is
calculated by the cost engineer and intimated to Contracts Engineer for
preparation of claim. In case the reasons are attributable to Descon, then cost
impact and revised Cost at Completion are calculated. In case there is a
change in budgeted project margin Head Office is approached for approval
with supporting documentation explaining the reasons.
This plan after incorporating achieved progress and required adjustments is
called Latest Forecast Plan or L. F. plan. Please refer Attachment 10.10 for a
sample L.F. Plan of an actual project. Revised three months and four week
look ahead schedules are then prepared based on the LF plan.

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CHAPTER 10 (Attachments)
1) Flow Sheet Monitoring

Attachment 10.1

2) Top Sheet

Attachment 10.2

3) Top Sheet (Discipline Wise)

Attachment 10.3

4) Manhours Analysis Report

Attachment 10.4

5) Consumable Analysis Report

Attachment 10.5

6) Monthly Manpower Histogram

Attachment 10.6

7) Crew Composition

Attachment 10.7

8) Daily Diary

Attachment 10.8

9) Bottlenecks Report

Attachment 10.9

10) L.F. Plan

Attachment 10.10

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CHAPTER 11

Construction Works
The purpose of all the Pre-mobilization Planning and Mobilization activities is
to ensure that once direct work starts it proceeds smoothly at site. Successful
completion of these activities does not mean that there can be a drop in
vigilance when construction activities have started and resources are being
utilized. The utilization of all the resources has to be controlled and accurately
monitored on a day-to-day basis. Resources may be redeployed as found
appropriate in order to stay on schedule.
The Site Manager has the ultimate responsibility for ensuring achievement of
the project schedule and objectives within the planned resources.
Responsibilities of all other site functionaries have been defined in Chapter 6
Organization.
In this chapter the process of exercising control over work execution shall be
described. The following topics are covered.
1. Scheduling of work
2. Responsibility for execution
3. Reporting of progress
4. Quality assurance
5. Health Safety and Environment
6. Civil works
7. Mechanical works
8. E&I works
9. Equipment and Plant
10. Handing over

11.1 Scheduling of work


The activity of planning up-to development of the 3 month and 4 week look
ahead plans has been described in chapter 7. The next step is level 4 planning
In order to have close interaction of the personnel responsible for execution
and scheduling these two functions viz. Area Scheduler and Discipline
Supervisor are clubbed together under common supervision at the Discipline
Engineer level. The Discipline Engineers in consultation with the Discipline
In-charges decide the weekly targets to be achieved by each Discipline
Supervisor in order to meet the targets laid out in the 4 week look ahead plan.
The area scheduler carries out level 4 planning for each Discipline Supervisor
based on availability of manpower, work front availability, and the previous
periods progress. This is used to print the DSTS for each supervisor. The
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target for completion of this activity is set so that the DSTS is available to
supervision first thing in the morning.
For preparation of DSTS refer to flow chart Attachment 7.5

11.2 Responsibility for execution


The Discipline Supervisor utilizes the work force available to him to carry out
the work detailed in the DSTS. He decides what each individual will do
during the day and arranges to have the necessary resources available for each
member of the workforce to carry out the job. He coordinates with the area
material coordinator to have all the required material available at the location
well in time for its actual requirement. Equipment requirements are also
arranged likewise. It is the responsibility of the Discipline Supervisor to
ensure that work being done is up to quality standards and that the workforce
is properly utilized. He has to ensure that workforce is familiar with the work
methods and the quality and safety requirements. In case the work requires
any permits, these must be arranged in advance so that there is no idle time on
their account.
The Discipline Engineer keeps track of the progress being achieved by the
workforce of all the supervisors in his area pf responsibility. He ensures that
resources and work support elements are available to them for carrying out the
jobs scheduled.
The Discipline Engineer and The Discipline Supervisor shall both ensure that
work being performed is as per DSTS. In case the client desires the inclusion
of work that is out of the original scope than this shall be addressed through
the system designed for handling extra work. It is described in detail in
chapter 12. This shall ensure that the extra work is identified and tracked
separately and ultimately invoiced separately from the original scope. Failure
to segregate the extra work will result in reporting of lower efficiency for
normal work as well as loss of revenue and depletion of margins for the
company.

11.3 Reporting of progress.


At the end of the work period the Discipline Supervisor fills out the progress
achieved on each phylum of the drawings listed on the DSTS as a percentage
figure. He also enters the attendance of the work force by indicating the
number of hours that each individual has worked and the relevant cost centre.
This information is later entered by the Area Schedulers into the DPMS
system and is used to update progress. The man-hours indicated in the
attendance part are entered from the DSTS into GDMS by the time keeper.
This information of CCTR wise man-hours is electronically transferred into
DPMS and is used to determine work efficiency by comparing earned manhours and actual man-hours payable. The flow chart for DSTS is available as
Attachment 7.5 while the flow chart for progress measurement is at
Attachment 10.1
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The progress and efficiency reports produced from the system are referred by
the Discipline Engineers, In-charges and the Site Manager. Therefore it is
important for the supervisor to fill out the progress and the attendance
accurately.

11.4 Quality, health, safety and environment (QHSE)


General
Quality, health, safety, and the environment management is not only Descon's
top priority but it is our way of life in meeting external as well as internal
business commitments. Descon operates at all of its establishments and
projects through well-integrated ISO 9001:2000 certified QHSE systems.
System is based on proven policies, procedures, and methods statements that
meet industrial standards policies such as OHSA, ASME, and CE
certification.
The QHSE department serves as the domain expert to implement the
companys Quality, Health, Safety and Environment policy through the linemanagers and supervisors at all projects meeting project performance
objectives. The complete awareness of our core and operating values is
ensured through a comprehensive program of training and knowledge
dissemination to staff before and during project execution.
11.4.1 Quality Management System
The Company operates its quality management system on the basis of ISO
9001:2000 standard. DESCONs Quality Management System documentation
hierarchy is illustrated in the figure below;
LEVEL 1 QUALITY MANUAL
LEVEL 2 STANDARD OPERATING
PROCEDURES
LEVEL 3 METHOD STATEMENTS / P0LICIES

LEVEL 4 FORMATS/FORMS

Project Quality and HSE Plans are prepared, specific to a particular project.
These Plans regulates the working of a project, supported and supplemented
by the Method Statements.

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Note:
A procedure describes how a process is performed, while a Method Statement
describes how a task is performed. Method Statements tend to be more
detailed than a procedure.
Records are the filled forms. Records document how the tasks were actually
done.
For QMS documents of QHSE department please see Attachment 11.1
11.4.2 QHSE Planning
QHSE Planning starts right from bidding stage, QHSE department coordinates
with proposal manager in the study of ITT/ITB especially with regard to the
quality aspect in the scope of work and preparation of QHSE documents
accordingly for order acquisition team to make profitable project-winning
proposals.
QHSE department is responsible for overseeing the preparation of quality
plans, inspection and testing procedures, and HSE Plan in the light of project
specifications/requirements and their implementation at work sites through
adequate deployment of resources pertinent to quality control functions.
QHSE head office provides all resources considered necessary to implement
and maintain the quality of product/service. This includes infrastructure
needed to achieve conformity to product requirements (building, working
space & associated facilities, deployment of trained & experienced QHSE
manpower, process equipment, transport or communication and working
environment).
Head QHSE shall ensure selection of QHSE manpower and other resources in
the view of all project requirements and coordinate with PM/SM for all
bbudgetary deviations.
11.4.3

Project Quality Plan (PQP)


Based on the historic data and projects know how QHSE department prepares
Standard Project Quality Plan (PQP/P#XXXX). Current systems and
procedures information pertaining to BAs and BSDs operations will be
obtained for developing the standard PQP. Revision to the Standard PQP
document will be made every year for keeping it inline with the BAs/BSDs
operations, however minor changes can be made whenever deem necessary.
-

Standard copy of PQP will be made available on net for ready reference of
BAs/BSDs. Proposals may request QHSE to tailor PQP for making it fit
for purpose inline with tender specifications.

On award of all projects nominated Project team will prepare project


specific PQP using the standard documents submitted to Customers earlier
along with the proposals. Project Contract specification will be reviewed

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to address the requirements in this document comprehensively. SM to


advise respective project team members about the project scope so that
they can develop documents and incorporate the same in the PQP.
Revision number to the document will be changed and approval of SM
and I/C QA&QC will be recorded on the front page of the document.
-

Appreciating the fact that PQP (project specific) is a live document and
the changes in departmental documents, execution philosophy and
contract specifications must be done at the start of every month, to achieve
conformity while implementation. I/C QA&QC site and SM will send a
copy of latest PQP to Head QA&QC on quarterly basis. PQP copy may be
requested at any point during the course of the project by Head
BAs/BSDs to conduct Audits. A new revision number must be issued for
all reviews and modifications to the document.

The latest revision of PQP should be made a part of project wind-up


report.

Followings shall be the attachments of the project specific PQP. These


attachments may vary from project to project:
-

List of Quality Inspection Plans

Project Organization Chart

Job Descriptions

Mobilization Plan

Master Schedule/ Direct work execution Plan

Manpower histogram

Master Schedule of QMS and Internal Audits

Master Schedule of Project Assessment Audits

List of Method Statements

List of Contract Specifications

List of IMTE

List of Standard Operating Procedures

List of Codes and Standards

Quality and HSE Policies

Rigging Plans

Material Requirement Plan (MRP)

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11.4.4 HSE Plan


A Health, Safety and Environment Plan for the project shall be developed and
implemented. The implementation of the HSE Plan will be monitored through
regular HSE audits. HSE is a line function; every one is responsible for the
HSE issues at site.
The HSE Department shall conduct initial orientation of all individual before
such an individual takes over responsibility. Under this program, general HSE
rules and regulations shall be explained to all personnel who shall be made
aware of all potential hazards involved in their job along with ways to protect
themselves as well as their environment.
Various types of HSE courses shall be arranged to inculcate HSE awareness
amongst every employee and to make him HSE conscious. Employees shall
also be provided with HSE literature, brochures, HSE rules, etc. to enhance
their knowledge and confidence in their jobs. Regular HSE Tool box talks
shall be conducted by line Supervisors and Incharge Site HSE, identifying site
hazards and to avoid the same using safe work practices.
Descon commitment to prevent harm to people, environment and community
can be viewed from the HSE Injures statistics and a professional
implementation of HSE plan at site.
To supplement this project specific HSE Plan, following SOP/MS will be
applied:
Refer SOP:
HSE/SOP-03 - Reporting and Investigation
Refer MS:
HSE/MS-05 - Safe work practices
11.4.5

Quality Inspection Plan (QIP)


Quality Inspection Plans are developed for all Inspection & Test to be
performed for project core activities. All specific/references, contract
specifications, codes, standards and formats references are detailed in this
document.
Inspection and Test co-ordination and interfaces of all parties involved are
defined and implemented through QIP as a guiding document for Quality
Control activities.
Responsibility of QIP preparation lies with project QA&QC Incharge and on
development the same should be verified & approved by all contractual
parties.

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The project core team as well as Head Office QHSE functionaries will gauge
implementation effectiveness. Deficiencies shall be highlighted to the project
team for corrective and preventive actions.
All Inspections & Test records on approved formats as referred in QIP shall
be maintained by I/C QA&QC at site for final quality dossier submission.
11.4.6

Receiving Inspection
In determining the amount and nature of receiving inspection, consideration
has been given to the amount of control exercised at Head Office, sites, works
and vendor premises to ensure conformance and record evidence.
Refer SOP:
QA&QC/MS-01 - Receiving Inspection
This is highly appreciated control point for Descon. All pre-requisite checks
are ensured either it is a Descon supplied material/product or a vendor /client
scope. The primary interfaces in between all functionaries have been
identified in respective SOP and MS of departments.

11.4.7

Suppliers Pre-qualification
In order to ensure that purchased product conforms to specified requirements,
assistance is provided to Subco & Procurement department for the technical
evaluation of Suppliers (sub-contractors/vendors) as per laid down
policies/procedures.
Refer SOP/MS:
Comm-Proc/MS-02 - Pre-Qualification of Suppliers
Comm-Proc/MS-11 Sourcing / Pre-Qualification of Sub-contractors
Comm-Proc/SOP-04 - Subcontracting

11.4.8

Welding
Welding Procedure Qualification
A welding procedure is qualified according to ASME IX or other applicable
code. Essential, supplementary essential and non-essential variables are noted
on Welding Procedure Specification (WPS) formats.
If results are in accordance with the applicable codes then Procedure
Qualification Record is prepared by welding engineer.
Refer MS:
QA&QC/M/MS-07 - Welding Procedure Qualification

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Welder / Welding Operator Qualification Test (WQT)


Welders/ Welding operator qualification test is a prerequisite for all welders to
commence welding works at any project / works location. Welder
performance qualification tests shall only be carried out by employing
approved WPS to determine the ability of welder/ welding operator to produce
sound welds.
Refer MS:
QA&QC/M/MS-17 - Welders/Welding Operator Qualification Test (WQT)
11.4.9 Customer Satisfaction
Site Management ensures that the customer requirements are determined and
met during the execution of the project. DESCON Engineering uses a
customer feed back form (QA&QC/FRM-15) to obtain information on how
our customers view our performance versus their expectations. By keeping in
view the importance of the customer complaints, this issue is a regular feature
of the agenda of weekly meetings.
Refer SOP:
QA&QC/SOP-07 - Measuring Customer Satisfaction
11.4.10 Internal Audit
Scheduled Internal Quality Audits will be conducted for all departments
included in PQP. These schedules will be planned by QA&QC at Site. The
auditors for ensuring effectiveness of the system confirm corrective actions
taken on the system non-conformities found during previous audits. If
required, follow up audits will be undertaken to strike out non-conformities
that will crop up in the fresh audit. Only QA&QC has the authority to close
the system non-conformities. Head/Incharge BA/BSD will conduct Project
Assessment Audit to check the health of the processes at site.
Refer SOP:
QA&QC/SOP-02 - Internal Quality Audits
11.4.11 Documents Control
All QMS documents will be controlled and issued as per the following SOP:
Control of Quality Documents

QA&QC/SOP-01

QA&QC Department ensures that updated quality management system


documents are in use.

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11.4.12 Control of Nonconforming Products


To prevent the customer from inadvertently receiving nonconforming
products and to avoid unnecessary cost of further processing, nonconforming
products are handled through a written procedure.
Refer SOP:
QA&QC/SOP-04 - Control of Nonconforming Products
QA&QC/MS-02 - Segregation of Non-conforming items
For the analysis of the statistical quality data systematically, for effective
process control and improvement in quality of services / products delivered to
the customer, procedure mentioned below takes care of this aspect.
Refer MS:
QA&QC/MS-04 - Measuring Cost of Quality (COQ)
Incharge QA&QC Site shall be responsible for issuance, monitoring and
Maintenance of record of CAR/NCR reports and Cost of Quality.
11.4.13 Control of Quality Records
Maintenance of quality records is the responsibility of the concerned
departments of DESCON.
Refer SOP:
QA&QC/SOP-10 - Quality Records

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11.5 Civil Works


The civil construction shall be carried out according to Project Quality Plans
(PQPs) / Project Execution Plans (PEP), Work Instructions, Method
Statements and Execution Manual.
The PQP / PEP shall be project specific and prepared keeping in view the
specific site and client requirements. Project Quality Plan / Project Execution
Plan is made for every active site with appropriate references to the relevant
work instructions.
The Project / Site Manager is the owner of the relevant PQP / PEP and makes
revisions, whenever required. The revisions are controlled by QA.
In general the following activities are involved at civil construction sites: The
applicable generic Method Statements are indicated against each activity.

Excavation.IP-MS-01

BackfillingIP-MS-02

General Fill.IP-MS-03

Steel Reinforcement. IP-MS-04

Formwork IP-MS-05

Structural Concrete. IP-MS-06

Piling Work. IP-MS-07

Slip Forming. IP-MS-08

Grouting Works. IP-MS-09

Pre-Cast Concrete. IP-MS-10

Masonry Works. IP-MS-11

Cement Plaster. IP-MS-12

Flooring. IP-MS-13

Tiling IP-MS-14

Painting / Protective Coating. IP-MS-15

Water Proofing. IP-MS-16

R.C.C. Pipe. IP-MS-17

Concrete Pavements and Road works. IP-MS-18

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For other project specific activities, project specific Method Statements are
prepared and shall be followed.

11.6

Mechanical Works
The mechanical construction shall be carried out according to Project Quality
Plans (PQPs) / Project Execution Plans (PEPs), Work Instructions and
Execution Manual.
In general the following activities are involved at mechanical construction
sites. The applicable generic Method Statements are indicated against each
type of activity.

Erection of Stationary Equipment PC/M/MS/01

Erection of Rotary Equipment.PC/M/MS/03

Above Ground Piping. PC/M/MS/04

Chemical Cleaning and Passivation. PC/M/MS/05

Heat Treatment. PC/M/MS/07

Field Testing of Piping SystemPC/M/MS/08

Sand Blasting & Prime Coating PC/M/MS/10

Hot Insulation of Equipment and & Piping PC/M/MS-11

For other project specific activities, project specific Method Statements are
prepared and are to be followed.

11.7 E&I Works


The E&I construction shall be carried out according to Project Quality Plans
(PQPs) / Project Execution Plans (PEP), Work Instructions and Execution
Manual.
In general the following E&I activities are involved construction sites: The
applicable generic Method Statements are indicated against each type of
activity.

Field Instruments Installation PC/EI/MS-01

Instrument air piping and tubing installation PC/EI/MS-02

Instrumentation cabling and Junction boxes PC/EI/MS-03

Testing and Commissioning of Instrumentation works PC/EI/MS-04

Instruments calibration

Lighting and small power systems installation PC/EI/MS-06

PC/EI/MS-05

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Excavation and backfilling of cable trenches PC/EI/MS-07

Cable laying and termination PC/EI/MS-08

Cable splicing, glanding and termination PC/EI/MS-09

Cable tray, ladder and rack installation PC/EI/MS-10

Installation of switchyard equipment PC/EI/MS-11

Earthing system installation PC/EI/MS-12

DCS installation PC/EI/MS-13

LT switchgear and MCC panel installation PC/EI/MS-14

Power transformer installation PC/EI/MS-15

For other project specific activities, project specific Method Statements are
prepared and are to be followed.

11.8 Equipment and Plant


All equipment and plant at the site is under the control of I/C E&P. This
section is responsible for its upkeep and proper deployment. All the
equipment operating staff such as equipment operators and support staff such
as riggers and mechanics report to the I/C E&P. When equipment arrives at
site it is jointly inspected by I/C E&P and I/C QA QC. If there are any third
party tests and certifications required these are arranged by I/C E&P. Record
of equipment certification and operator certification are also maintained by
this group.
11.8.1 Deployment
Planning and FEDC Manager draws up a guideline for deployment of
equipment along with the 4 week look ahead Plan. This is provided to the
Discipline Incharges and also to I/C E&P. The day-to-day equipment
deployment is decided by the I/C E&P based on the equipment requests
received from Discipline Engineers. In case of demand for the same piece of
equipment from a number of users I/ E&P discuses this with the Planning and
FEDC Manager and then assigns the equipment based on over all priority for
the site.
11.8.2 Utilization
I/C E&P keeps track of equipment usage at the site and arranges to have it
redeployed during the day if it is not being properly utilized or is more
urgently required at another location. The Discipline Engineers also keep an
eye on the proper utilization of equipment while it is assigned to their area of
responsibility and return it for use at some other locations when it is not
required any more.
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A utilization card is maintained for each piece of equipment at the site. This
has provision for recording its daily assignment CCTR wise and supervisor
wise as well as the number of hours it was utilized during the day. Idle time
and time under maintenance are also recorded on these cards. The I/C E&P is
responsible for the accurate posting of equipment hours on these cards.
Information from these cards is fed into the GDES system. Similarly data of
equipment wise maintenance, POL usage, operator salaries and other costs is
combined to come up with the operating cost of the equipment.
11.8.3 Maintenance
The I/C E&P at site prepares a preventive maintenance schedule at site and
has all the equipment maintained accordingly.
For further details please refer to the following documents
Hiring of Rental Equipment E&P/MS-02
Equipment Planning E&P/SOP-02
Standard organization of E&P at sites E&P/SOP-04
Equipment Maintenance E&P/MS-02

11.9 Completion and Handing over


As work progresses beyond 60% completion it is desirable to change over to a
system or loop based division from the point of view of handing over to the
client. Test documents and quality dossiers shall be compiled for each system
and given to the client. Punch lists are prepared for any deficiencies that may
be observed and are attended. Clients acceptance is recorded as per agreed
procedure.

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CHAPTER 11 (Attachments)
1) Top Sheet (Discipline Wise)
2) Flow Sheet Monitoring

Attachment 7.5
Attachment 10.1

3) Master List of Documents (QHSE)

Attachment 11.1

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CHAPTER 12

Handling of Extra Work


12.1 Introduction
It is desirable to have a defined procedure for handling of extra work as its
proper tracking and invoicing can have a significant impact on the cash flow
and overall revenue of the project. Properly handled extra work should be
more profitable than the regular work as it is usually carried out without any
significant increase in indirect costs.

12.2 Definition of extra work


When actual work quantities are different from those specified in the original
BOQ, the increase or decrease can be handled through already laid down
procedures. Vigilance is however required to keep accurate track of the
quantity of work actually executed and to compare it with original quantities.
This procedure is for handling of extra work other than change in quantities of
original BOQ. The extra work can come up for the following reasons

When fresh items are added to the BOQ.

Changes in design requiring addition of new items

Change in already completed work

Changes in scope on receipt of technical clarifications or revision of


specifications issued by the client

Changes that have to be made due to erection difficulties.

Change orders that are issued by the client during the course of the
project.

12.3 Identification

Discipline Supervisor, Area Scheduler, Discipline Engineer, Discipline


Incharge, Planning Engineer, FEDC engineer, Quantity Surveyor
should all be made fully familiar with the original scope of work so
that they can identify extra work from normal work.

Sometimes execution staff agrees to carry out extra work on verbal


instruction from the client. This practice is to be discontinued as it
makes recognition difficult for subsequent quantification and billing.
Only written site instructions are to be accepted.

The site instruction would be required to carry out any work that is
outside the original scope.

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12.4 Handling of extra work

On identification of the extra work requirement the discipline


supervisor or area scheduler or any other senior member of the project
construction team shall fill out an Extra Work form. Attachment 12.1.
The work to be done shall be described therein. Copies of any
supporting documents such as clients site instructions shall be
attached with it.

The filled out Extra Work form shall be given to the Planning and
FEDC Manager. It shall be entered in the Extra Work Register
maintained by FEDC, Attachment 12.2 given a serial number and
analyzed to quantify the scope.

The Client shall be requested to issue a formal variation order for the
extra work through a change proposal. This change proposal shall
define the scope and propose a pricing basis.

Client can respond to this in three ways.


1.

Accept that the change proposal and issue a variation order

2.

Ask Descon to carry out the instruction while the pricing basis
is being finalized

3.

Withdraw the site instruction or revision that is causing the cost


impact

The Planning and FEDC manager shall keep the Site Manager
informed about the extent and scope of all Extra Work request forms
received and shall obtain written approval of the Site Manager for
Works exceeding (one) days duration

In case acceptance of Extra Work request is likely to have a significant


impact on the cost of the project or on the overall project completion
schedule then the Site Manager shall obtain written approval from the
BA head.

The FEDC Engineer shall analyze the change, decide how it is to be


carried out, and get it estimated by QS for determination of its BOQ,
BOM and resource requirement. Standard man-hours for each type of
activity involved in the extra work shall be used for coming up with
the man-hours required. The Planning Engineer shall ensure that the
planned man-hours are entered into PCS against the cost center for this
extra work and area scheduler would ensure that man-hours consumed
on the extra works are booked against extra works cost center.

Flow diagram for handling of extra work is provided at Attachment 12.3

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12.5 Monitoring of extra work


Separate cost centres should be allotted for Extra Work of each discipline in
each area.
These cost centres shall be intimated to all area schedulers, discipline
supervisors through the respective Area/Discipline in-charges.
All efforts shall be made to ensure that execution and reporting of extra work
shall be through the DSTS system.
In case of exigencies when extra work is taken up without waiting for its
formal inclusion in the printed DSTS then the Discipline Supervisor shall
enter it on the DSTS by hand.
Discipline Supervisors are responsible for correct allocation of resource
utilization. The Area Scheduler and Discipline Engineers shall cross check the
filled out DSTS sheets to ensure that resources utilized on extra work are
allocated correctly.
Progress and work efficiency of extra work shall be monitored using the same
quantities and standard man-hours determined by the QS in the estimation
phase.

12.6 Pricing of extra work

The FEDC engineer shall send the estimate of resource requirement


prepared by the QS to the Contracts engineer for coming up with a
selling price.

The Contracts engineer shall come up with a selling price for each
item of extra work based on the terms agreed with the client.
1.

Descon would prefer the extra work to be priced on a cost plus


percentage basis.

2.

Clients usually prefer item rates to be applied to the extra work.

3.

Client could also desire a lump sum rate to be agreed for the
extra work.

The rate to be adopted for pricing of resources should be agreed with


the client in the initial stages of the project if it is not already specified
in the contract.

Indirect costs shall be included in the price based on the formula


agreed with the client.

It is desirable that price estimate for the extra work shall be submitted
to the client before the work is executed. In case this is not practicable
then the estimate shall be conveyed to the client as early as possible.

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Invoice for the extra work should be submitted soon after work
completion along with supporting documents such as copies of
intimation to client/client acceptance, etc.

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CHAPTER 12 (Attachments)
1) Extra Work Request Form
2) Extra Work Register

Attachment 12.1
Attachment 12.2

3) Flow Chart for Extra Work

Attachment 12.3

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CHAPTER 13

13. Cost Control


The purpose of this chapter is to provide the readers an understanding of the basic
cost control concepts, tools and techniques to exercise the same in company business.
It is also intended to be a useful tool for training of fresh engineers, accountants and
all others on the Companys construction business. This will facilitate achievement of
the objective of completing projects within budget by exercising standardized cost
control practices across the company.
This chapter has been organized as per chronology of events of Project Management
starting from bid preparation, budgeting, planning, execution, demobilization, and
closeout.

13.1. Bid / Proposal


Business Development has the mandate to secure feasible business for the
Company. It reviews the requirements of different inquiries, makes
preliminary assessments and secures Managements approval for interesting
bids. BD is also responsible for pre-qualification of the Company to make it
eligible to bid. Once Management approval has been solicited, BD sends
selected inquiries for preparation of bid to Proposal Department.
Proposal Department consults relevant BA Head to appoint a Proposal
Manager and allocates a team for preparation of a Bid/Proposal (Estimate of
projected price and cost). Proposal team starts their work by comprehending
the scope of work, commercial and contractual conditions, specific site
conditions and seeks clarifications from the owner directly or through the
BAs BD representative or a designated representative where ever clarity is
required to mitigate ALL risks and to incorporate relevant commercial and
contractual features in the proposal.
Proposal Department uses WINBID system for preparation of Bid. WINBID
is an expert system designed and developed specifically by Descon
Engineering Ltd. It is capable of preparation of BID with precision utilizing
minimum effort by providing sound management intervention by selecting
rule banks and databases. WINBID also has provision to customize the
loading of margins to specific BOQ rates in order to facilitate the BA in
tactical gains as well as to improve cash flows of the project.
Most important aspect in preparation of Bid/Proposal is critical review, by the
Proposal Manager, of all aspects that would play an important role in
developing most efficient cost that is based on Companys past knowledge on
most efficient sources for procuring goods and services as well as their
optimum deployment through the implementation of efficiency generating
project management systems. It is the Proposal Managers responsibility to be
fully aware of local markets, appropriate inflation and other factors that may
affect the cost over the project life and that the same are incorporated in the
estimate.
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Although Material and labour packages have been developed with great care
but the same must be adjusted for degree of difficulty as foreseen.
Proposal Manager specifically executes and / or authorizes the following:

Project is defined in WINBID with all attributes such as a unique


proposal no, client, country, currency, etc.

Assignment of a Chart of Account.

Assignment of rights to use the system by individuals of the proposal


team.

Entry of Bill of Quantities (BOQ) in WINBID in the form of WBS.


The BOQs may also be uploaded from Excel or Primavera Project
Planner (P3).

Entering the schedule for start and end date of each activity. Activities
along-with schedule can be exported to Primavera P3 for refining and
then imported back.

Cost Centers are assigned to the WBS.

Reviews of material and manpower rates with the help of fresh quotes
from commercial and personnel & administration departments in case
the existing rates in the database appear outmoded.

Degree of difficulty is adjusted for each cost center keeping in view


the site conditions.

Mobilization & Demobilization costs are project costs in case of


overseas projects and the same are entered as part of site cost.

Cost Calculation is run.

Cost must be reviewed and rationalization checks made to ensure that


big ticket items such as large crane mobilization, earth
moving/excavating equipment or the like are not allocated on the basis
of standard man-hours but are appropriately booked considering
appropriate deployment costs of for specific BOQ item.

Similarly indirect cost must be adjusted where cost worked out by


WINBID rule bank varies with a specific project requirement.

After adjustment of indirect cost again the programme should be rerun with option to distribute indirect cost on direct cost centers on
selected basis.

Project Margin is to be established after management review and, if


necessary, shall be disproportionately allocated to BOQ selling rates to
meet business strategy and cash flow needs.

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In case of success this estimate shall form Budget Rev 0.

13.2. Budgeting
As stated earlier, on award of contract WINBID system is run to develop Budget Rev
0. The following elements of costs are subsequently revisited after a closer scrutiny
on work methods to be adopted, sub contracting philosophy, final negotiation with
vendors and suppliers through healthy competitive procurement scheme established
by the Site Management team and respective BA Head.

Direct Materials Cost

Direct Labour Cost

Consumable Cost

Subcontracting Cost

Charged Out Tools

Equipment Rental

Equipment and Plant (Fresh Purchase / Depreciation)

POL Cost

Operation and Maintenance Cost

Site Facilities Cost

Utilities

Construction Overhead Cost

Salaries Benefits Supervisory and Support Staff.

Insurance

Purchase Plan of New Equipments and Plants.

Monthly Income Statement and Cash Flow

Projected KPIs (Key Performance Indicators)

13.3. Budget Rev 1


The fundamental concept of Budget Rev 1 is to revisit cost estimate post contract
award after reassessment of all costs and setting new cost targets to arrive at a better
than Bid cost with a view of securing management approval for including site
personnel as potential beneficiaries of the Enhanced Profitability Sharing Scheme.
The areas of potential savings are manpower cost reduction through efficient planning
and scheduling, efficient sub-contracting, efficient equipment management and
optimum utilization of all indirect costs by making indirect costs sensitive to
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billable work. All this is only possible if novel ways are looked into by the
execution team and its BA Leadership in their execution philosophy to ensure
enhanced efficiencies through timely availability of all inputs (drawings, access,
T&P, manpower, supervision, etc.)
Some of the other factors necessitating development of Rev 1 may be based upon the
factors i.e. if scope of work gets changed during execution due to additional clients
requirements and uncontrollable conditions, arise such as results in inflation or
deflation
Budget Rev1 can be prepared using WINBID incorporating new criteria and cost data.
A note of caution here is never to use budgeting process to hide inefficiencies or to pad
contingencies.

13.4. Project Planning


Project planning is breaking down the entire project into smaller manageable
activities, determining the duration, interrelationship, and resources requirements of
each activity. Once this is complete then the application of resources is scheduled in a
planned manner.
13.4.1 Project
A project is a temporary endeavour undertaken to create a unique product or service.
Temporary means that every project has a definite beginning and definite end. Unique
means that the product or service is different in some distinguishing way from all
other products or services.
Projects can be defined into following categories according to scope of work:
Engineering, Procurement and Construction (EPC): In this type of projects contractor
is responsible for design (Engineering), procurement and Construction.
Procurement and Construction (PC): In this type of projects contractor is responsible
for procurement and construction. Other company or client provides engineering.
Construction: In this type of project contractor is responsible for construction.
Design and Material is the responsibility of client.
Descon executes projects of all disciplines i.e., Civil, Mechanical, Electrical,
Instrumentation. It also carries out manufacturing of plant and equipment to serve
major sectors of the economy
13.4.1.1 Work Break Down Structure (WBS)
Break down of project into small work packages is called Work Breakdown
Structure. It is very important to break down project into smaller work
packages for effective project planning and control. Following WBS is used in
Descon Engineering Ltd.

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1 Project
1.1 Construction
1.1.1

Discipline
1.1.1.1 Zone/Area
1.1.1.1.1 Cost Center / Activity

For details please refer Section 2.1.1 of this manual

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13.4.1.2 Organization Break Down Structure (OBS)


Complete organization is required to plan, execute and control a project. A
project team is organized with defined responsibilities at each level.
Following typical Organization is used in Descon Engineering Ltd.
1

Site Manager
1.1 Construction Manager
1.1.1 Discipline In-Charge
1.1.1.1 Discipline Supervisor
1.1.1.1.1 Cost Center / Activity

13.4.1.3 Mapping of WBS on OBS


Mapping of WBS on OBS is a process of forming Work Packages for each
chain of command in an organization for the successful achievement of goals.
At Descon projects WBS are mapped with OBS as follow:
WBS

OBS

Project

Site Manager

Construction

Construction Manager

Discipline

Discipline In-charge

Zone/Area

Discipline Engineer

Cost Center/Activity

Discipline Supervisor

For detail please review Section 2.1.3 of this manual.


13.4.1.4 Levels of Planning
Planning is carried at various levels depending upon the levels of details
presented. (For details pl. refer to Section 2.3 of this manual)
13.4.1.4.1 Level-1 Planning
This is basic contractual plan that defines start and end dates for each of the
major activities like design, procurement and construction.
For reference please see Attachment 2.7

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13.4.1.4.2 Level-2 Planning


In this level the discipline-wise schedule for each of the above major activities
is prepared. For example schedule of Civil, mechanical and E&I construction
activities is separately defined.
For reference please see Attachment 2.8
13.4.1.4.3 Level 3 Planning
In this level, the level-2 plan is broken down into various Zones/Areas. The
activities of Level 2 plan is further divided into smaller (up-to Cost Center
Level) and schedule of each cost center is provided. For example Mechanical
discipline is further broken down to rotary equipment, stationary equipment,
CS piping fabrication etc.
For reference please see Attachment 2.9
13.4.1.4.4 Level 4 Planning
This plan is prepared at site. In this plan the activities of Level-3 are broken
down to drawing/Isometric level. In Descon working this exercise is done at
supervisor level.
For detail please review section 2.3

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13.5. Project Resource Planning


13.5.1 Direct Costs
13.5.1.1 Direct Material
In WINBID material packages are defined in Rule Bank for each cost center.
Standard quantity of each item required per unit of cost center output is given.
Material requirement is the product of quantity of cost center, standard
requirement and price. Quantity of each material is grossed up for all the cost
centers. Most important element is proper estimate of cost of each material
keeping in view the project life, economic environment etc.
13.5.1.2 Direct Labour
Like material, crew packages are also defined in WINBID. Craft wise
Standard Man Hours (SMH) are given in the database for unit output of each
cost center. It can be adjusted according to site requirement. Standard rate per
man-hour is also available in database. Craft wise man-hours requirement is
calculated for each item of BOQ with respect to relevant cost centers. Cost of
Direct Labour is product of craft wise total man-hours and standard rates.
13.5.1.3 Consumables
Standard requirements per unit of output of each cost center are given in
WINBID database. System calculates total requirement for BOQ for each cost
center. For budget purpose it consolidates each item of material with its total
cost.
13.5.1.4 Equipment and Plant
Standard Equipment and Plant requirement is given in database. On command
the system works out total E&P requirements. Choice is available to use
existing company owned equipment, or equipment to be fresh purchased or
rented from outside. The rental charge rate however in all cases remains the
same and calculated by multiplying rate into months of deployment. Whether
deploying own equipment or utilizing outside rental POL requirement is
calculated by the system on the basis of standard consumption provided to the
system. In case of own equipment the system picks up depreciation for certain
category, lease rental for own equipment under financial lease and no charge
in case of equipment with zero book value.
13.5.2 Indirect Cost
The WINBID programme has asset of rule banks that identify all indirect costs
identified as:

Construction Overhead

Site Facilities

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Supervision

Other Overheads

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13.5.3 Consolidation of Direct and Indirect costs into billable BOQs


WINBID has the provision to consolidate all costs in a map able linkage between
billable revenue basis (BOQs) with cost centers. This is a pivotal capability for
identifying source of run away costs for the site management and to take swift
measures to remedy the cause(s).
This mapped cost report is also used to compare Companys standard cost centers for
their efficiency from project to project.

13.6. Execution
For detail account of activities at this stage of project please refer to other relevant
sections of this Chapter

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13.7. Project Progress and Cost Control System


DESCONS project control systems essentially dwell upon a three prong effort, the elements
of which are:
i) In house developed systems defined as PROCESS and described here below
ii) Primavera Project Planner (P3) and
iii) ACCPAC accounting software.
A graphical depiction of the integrated system is depicted in to Attachment-3.8 along with
the format of report and the position, responsibilities and the input and output nodes of the
key players in the site organization.
13.7.1 PROCESS
Process comprises of following modules
13.7.1.1 DCS Document Control System
This module is used for effective control of documents specially drawings. It
records receipt of drawings with reference to transmittal, revision number, no
of copies etc. Issuance of drawing for construction is also recorded. At any
point of time status of drawings and documents and evidence of their entry
into the DPMS system is available.
For detail please review section 3.2.1 of this manual
13.7.1.2 DPMS Descon Progress Monitoring System
This module is used for keeping a perpetually updated log of all works in
terms of SMHs, with WBS/ OBS inter-phase and a system that ensures that
costs incurred is transformed to revenue. All drawings are downloaded into
the database in relevant OBS slots against planned schedule targets and the
actual progress is monitored on the basis of actual backlog of work load as
envisioned from the AFC drawings logged into the system. DSTS (Daily
Schedule and Time Sheet) is produced by this system and actual progress is
entered in the system on a daily basis. Comparative analysis is available for
control.
For detail please review section 3.2.2 of this manual
13.7.1.3 MMS Material Management System
This module is used for management of client-supplied material.
13.7.1.4 ITS (Inspection and Test Solutions)
Inspection and Test solution is primarily used to control the activities in which
inspection and testing is involved.
For detail please review section 3.2.4 of this manual.
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13.7.1.5 Test packs


Test Packs is used to divide large network of interconnected pipes into small
manageable parts to facilitate testing of the parts
For detail please review section 3.2.6 of this manual.
13.7.1.6 Bottlenecks
This system enables its users to book major bottlenecks in a project. When a
bottleneck is observed it is entered in the system, and it is used to keep track
of the factors responsible for the hold-ups, in-charges and clients comments
thereupon, remedial actions taken, effects of bottleneck, etc.
For detail please review section 3.2.5 of this manual
13.7.1.7 SMART System for Material acquisition, retrieval and
transaction.
This system is used mainly for planning and procurement of Descon supplied
materials.
For detail please review section 3.5 of this manual.
13.7.1.8. GDMS Gainful Deployment of Manpower System
System is used to record planned and actual manpower utilization and cost.
For detail please review section 3.3of this manual.
13.7.1.9 GDES Gainful deployment of Equipment System
This system is used for recording planned and actual deployment of
equipment and plants.
For detail please review section 3.4 of this manual.
13.7.1.10 FAMS Fixed Asset Management System
This system used for management of fixed assets.
For detail please review section 3.5 of this manual.
13.7.2 ACCOUTING SYSTEM
DESCON uses ACCPAC accounting system for financial and cost accounting.
This system comprises of several modules aptly described in the Financial
Control Manual.
The system integration and flow of financial data is depicted in SBT user
manual.

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13.8. Monitoring
13.8.1 Progress of Work
Every drawing must be entered into DPMS-DCS with clear identification of relevant
cost center, schedule and amount of effort required for its execution.
It is important to record and review actual progress against plan through proper use of
DSTS as a fundamental tool of site management.
Work plan i.e., the what and when is fed into the DPMS by the Planning and
FEDC office. It is continuously updated on any change in scope of work.
The supervisor records actual Progress on DSTS issued by the Planning and FEDC
office and returns to Scheduler for entry into the DPMS system.
Cost Center wise actual man-hours are recorded in GDMS.
It is the foremost responsibility of the frontline supervisor that he strives to achieve an
efficiency of 100 % or better on a daily basis. Achievement of 100% efficiency on a
daily basis is a manifestation of good advance planning and scheduling and
conversely worst than 100% efficiency is an alarm sounding bell and a tell tale for
poor site management
13.8.2 Invoicing
Invoicing is the most important culmination point of any business process. At
DESCON timely generation of invoice equal to or surpassing the planned value is a
sound indicator of a projects health. No matter what the contractual arrangement
calls for invoicing on a given project for it could be based on measured progress or
upon attaining a milestone. It is usual that an agreed procedure is used to raise
invoices and unnecessary delays are avoided by ensuring that the progress and its
basis is pre agreed with the clients.
13.8.3 Cost
Effective cost planning is pre-requisite to achieve success. Cost accumulation scheme
is elaborated as per Attachment-13.1
The system would only accept costs with reference to a Cost Center.
13.8.3.1 Direct Material
Store Keeper records cost on recording of SIR (Store Issue Requisition) in
Project Accounting Module. Material Price is responsibility of Commercial
and usage is responsibility site Manager.
3.8.3.2 Direct Labour
Direct labour cost is recorded in GDMS through entry of time sheet. Journal
Voucher is processed by the system for cost center wise entry in Project
Accounting System.
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13.8.3.3 Sub Contracting Cost


Sub Contracting Cost is recorded in Project Accounting Module using Sub
Contractor option. Cost should be compared with sub contracting contract.
13.8.3.4 Consumable
Store Keeper records cost on SIR (Store Issue Requisition) in Project
Accounting Module. Material Price is responsibility of Commercial and usage
is responsibility of site Manager.
13.8.3.5 Equipment and Plant Cost
Equipment and Plant utilization is entered in GDES system. System calculates
cost center cost using predefined internal and external rentals. Other cost is
recorded in Project Accounting Module using equipment cost center field.
13.8.3.6 Indirect Cost
Indirect Cost is recorded in relevant cost centers in Project Accounting
Module.
13.8.3.7 Site Facilities
Cost is recorded in Project Accounting Module using different options like
material issuance, Sub-Contractors invoices, Miscellaneous Cost.
13.8.3.8 Construction Overheads
Construction Overheads are recorded as Indirect Cost using different options
in Project Accounting Module.
13.8.3.9 Supervision
Supervision cost is recorded in payroll and transferred to Project Accounting
Module through miscellaneous cost entry.

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13.9. Profitability Analysis


Basic profitability analysis should be carried out in Project Analytical Study. Information is
fed into this statement against comparative figures from budget. The latest forecast for the
next month and balance cost to complete is estimated by the Planning and FEDC Manager
using information in the Cost Center wise report based on previous cost trends.
The year to date and project to date actual costs are imported through ACCPAC financial
system. Financial Controller of the Project is responsible for timely issuance of for this
report.
It is essential to calculate balance cost to complete at each reporting period with maximum
possible care keeping in view prevailing and upcoming conditions. Project Cost to date plus
balance cost to complete provides fare idea about fate of the project at close.

13.10. Cash Flow Analysis


Timely availability of working capital is essential for executing a project in the most
efficient manner. Major contributor to liquidity crunch is the inability of the Project to
generating invoices of the value as forecasted if not better. Invariably the so called fixed
costs are a function of time and any such cost if having not contributed to revenue
generating capability puts the project into a vicious circle.
The purpose of Cash Flow Analysis is to identify such elements as invoice generation and
follow-up, control on WIP, inventory aging, controlling payables, etc.
Monthly projections are developed for inflow and outflow with respect to each activity as per
Attachment 13.2
Cash flow is considered a major yardstick of success (or failure) of any venture. An Income
Statement may include accountants estimate of revenue and cost but for cash flow one has to
reconcile cash balance at the end of each period. And therefore focus on cash flow warrants
good health of a project.

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13.11. KEY PERFORMANCE INDICATORS (KPI)


The KPIs are intended to facilitate higher management in getting awareness about a
businesses health in a brief and short form.
A popular method for measuring health is through Ratio Analysis.
Some of the relevant (but certainly not exhaustive) are stated here under. It is the site
managements prerogative to select any one of these but a Company wide standardized
format has a greater value for bench marking.
Material Margin/ = (Revenue Direct Material Cost)
MH
---------------------------------------Direct Manpower SMHs
Contribution Margin/ MH = Revenue Variable Cost
-------------------------------MH
Average Cost / MH = (Total Salary+ MOB Cost + Camp /Catering) / MH
SOT

= SOT
----------Direct Salary

Equipment Turnover = Revenue


--------------Equipment Rental
MATERIAL
Cost at Completion based upon budget allowance Vs Actual Trend
Budget Allowance
(BA)

Vs

Actual Trend A
X1
(A)
----- -------------BA
Progress %
Direct

No of Indents, Planned Vs Actual


Indirect
Direct
No Of Emergency Indents
Indirect
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AVG Value of P.O Planned Vs Actual


Value = No of POs

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Direct
Indirect

% Of Orders on Approved Vendors,

No Of POs
.
No Of POs on Approved List
Inventory Turnover = Total Consumption
Average Inventory

Inventory Aging
Inventory Conversion to Billing
POL Consumption Per Machine (Standardize For Cross Project Comparison)
Charge Out Tools
Person

Total Cost (FP Only)


Strength of D. Manpower

Communication Cost

No of Cell Phones
Avg. Billing / Cell Phone
Other Telephone Cost
Fax Cost
Courier Costs

SUPERVISORY PERSONNEL:
SITE MANAGEMENT TURNOVER
(INCLUDING ALL TOP TIER)

REVENUE
SITE MANAGEMENT COST
(SALARIES+BENEFITS
COMMUNICATION+
PERKS+TRANSPORATION+B/L
+LEAVE FARE ETC.)

OTHER THAN PERSONNEL IN ABOVE


TURNOVER

REVENUE
SITE MANAGEMENT COST
(SALARIES+BENEFITS
+COMMUNICATION
+TRANSPORTATION + B/L + LEAVE
FARE, ETC.

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CHAPTER 13 (Attachments)
1) Cost Accumulation Flow Chart

Attachment 13.1

2) Cost Centre Wise Cost Analysis Report

Attachment 13.1a

3) Basis of Indirect Cost Distribution

Attachment 13.1b

4) Rolling Cash Flow Forecast

Attachment 13.2

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CHAPTER 14

Feedback to Client
Clients require to be kept informed about the actual progress of work so that
they can compare this with the targeted planned progress. The frequency of
reporting could be daily, weekly and monthly. The amount of information to
be provided to the client on these progress reports is mutually agreed at very
early stages of the project. The format of the reports and the frequency should
be agreed up front with the Client. The collection of detailed information that
may be required to produce client specific reports can be time consuming and
costly.
Descon progress monitoring is based on assimilating progress onto cost
centers. This is because our estimation of costs during the bid preparation
stage is also based on cost center quantities. Therefore to evaluate work
efficiency the actual costs are also measured on the same basis. Clients
however prefer to have feedback of actual progress on their own terms. This
could be based on area wise or discipline wise progress and the unit of
measure could be different from the one used by Descon. For example they
might ask piping progress to be reported in tons instead of Dia Inches.
To overcome this difference it is necessary to devise a system where in the
progress measured through the Descon system can be converted to progress in
the terms desired by the client. The initial mapping of the clients BOQ on our
cost centers can be utilized for this purpose. However as the progress recorded
on our cost centers has often to be distributed over a number of clients BOQ
items the system has to be designed so that progress can be correctly
distributed. This system can require assumptions, as progress on one cost
center has to be distributed over a number of client BOQ items. For example
progress on the CCTR of excavation has to be distributed over different
activities like cable trench, underground piping, foundations etc. They may all
be progressing at different rates than the overall progress on the CCTR.
Therefore in order to come up with a realistic estimate of the progress in
clients format the estimator will have to use individual multiplication factors
in converting the progress.
In the worst case if the clients system is very different from ours then progress
against their elements shall have to be measured separately.
The items that may be reported on a daily basis could be as follows,

Verbal description of salient activities in progress

Summary of discipline and area wise progress.

Descon direct and indirect manpower deployed.

Subcontractors manpower deployed.

Equipment deployed.

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Bottlenecks summary.

Punch list points; total, open and closed.

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Examples of a progress report format is included as Attachment 14.1 Daily


progress report for client
In contrast to this the weekly reports are more focused on progress
The monthly report in addition to reporting progress highlights the following.

Bottlenecks

Instances of time loss

Reasons for time loss

Equipment delays

The exact format of these reports is drawn up in consultation with the client

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CHAPTER 14 (Attachments)
1) Daily Site Report

Attachment 14.1

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CHAPTER 15

Invoicing the Client


The exact basis of invoicing for work completed varies from project to
project. It is agreed at the time of finalizing the contract. However the most
commonly used parameter for invoicing is after completion of a certain agreed
amount of progress and on reaching certain milestones. There may be up front
payments as mobilization advance or on reaching certain milestones such as
completion of temporary site facilities. After these stages when direct work
starts the payments are progress based. In some cases there may be separate
monthly payment terms for indirect manpower while the direct manpower
amounts are invoice able according to progress.
The client may not be prepared to accept our progress against cost centres as
the basis of progress measurement for invoicing. It should be discussed with
the Client to bring the method of invoicing as close to our standard system of
monitoring progress against cost centers as possible.
The responsibility for preparation of the invoice is that of the Contracts
Incharge. All documentary back up in support of the invoice required shall be
provided by the Planning and FEDC Manager. The invoice shall be sent to the
client with the approval of the Site Manager. The Financial Controller shall
follow up the client for payments.
In order to minimize the time required for verification of the invoice, it is
desirable to agree a procedure with the client wherein the discipline incharges
get pre-approved progress certificates from their client counterparts and
provide these to the contracts engineer for drawing up the invoice. These
certificates should be attached with the invoice so that no physical progress
measurement/verification is required after submission of invoice and the
chances of return of invoice for any mistakes, correction or due to dispute on
progress claimed are eliminated.
For further details related to invoicing and related matters such as release of
guarantees, etc. please refer to the relevant chapter of the Financial Manual.

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CHAPTER 16

Feedback to BA and Head office


The feedback to the client discussed in chapter 14 was basically to meet the
contractual commitments. This provides some benefits to the contractor in
terms of development of a common understanding of the state of the project.
The feedback to the Business Area and the head office is more detailed and in
standardized Descon terminology. Accurate feedback to these locations
enables management to have a clear understanding of the state of the project
and enables them to recommend timely corrective action.
The formal feedback is in the form of reports provided on daily weekly and
monthly basis. The frequency and mode of dispatch are as under.
Type of report
Daily progress Diary

B A Head
Daily by e mail/Fax

Weekly Project Performance Weekly by e mail/Fax


Report
Project top sheet and
Man-hour Analysis Report
from DPMS
Project Analytical study

Head Office

Weekly to PMS
after
including
comments.
To be sent by
Planning
&
FEDC Manager

Monthly by 10th of the Monthly by 10th


month
of the month

Project Monthly Accounts,


Monthly by 10th of the Monthly by 10th
Balance Sheet,
Profit and Loss and Cash month
of the month
Flow Statements
Project close out report

At project close out

At project close
out

16.1 Daily progress reports.


The daily progress report provides a snapshot of the state of activities as on
that day while giving details of the overall situation. The following items
should be covered.

Verbal description of salient activities in progress.

Summary of discipline and area wise progress.

Descon direct and indirect manpower deployed.

Subcontractors manpower deployed.

Equipment deployed.

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Equipment un-serviceable.

Bottlenecks summary.

Punch list points total, open and closed.

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The report is prepared by Planning and FEDC and is given by the Planning
and FEDC Manager to the Site Mangers for review and then sent to the Head
BA.

16.2 Weekly Project Performance Report


This report contains a summary of progress during the week as well as an
update of the overall progress, cost and review figures for the project. It
covers the following

Contractual and Expected Completion Date.

Discipline wise and overall progress for the week and up-to-date.

Comparison of budgeted, actual and forecasted figures of procurement.

Invoice comparison of budgeted with actual and expected at


completion.

Invoice submission status.

Comparison of expected margin with budgeted margin.

Summary of receivables, payables and working capital.

Present status of inventory.

Summary of NCRS raised and closed.

Summary of HSE performance.

Revenue per Earned MH.

Total Cost including PSI per Earned MH.

Cost w/o materials per Earned MH.

Comments on deviations form the budgeted figures.

The report is prepared by consolidating inputs from the individuals


responsible for the relevant functions. The format of the weekly report, the
guidelines for filling it out, and the responsibility for collecting the
information and consolidating it are indicated in Attachment 16.1 and 16.2

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16.3 Project analytical study


The Financial Controller using the Job Cost module of ACCPAC prepares the
Project Analytical Study. It has the following information.

Comparison of budgeted and actual revenue

Comparison of budgeted and actual costs under different expense


heads

Both of the above are compared on the basis of the month, year to
date, project to date as well as balance to complete.

Cash flow comparison with forecast

For details please refer to the Cost Control Manual chapter 5 c ii

16.4 Project close out report


This report provides detailed feedback on the overall project performance and
provides valuable guidance in improving estimation norms for future projects.
Details of the report and its analysis are described in chapter 19.

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CHAPTER 16 (Attachments)
1) Weekly Project Performance Report

Attachment 16.1

2) GuideLines for preparing Weekly Project Performance Report

Attachment 16.2

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CHAPTER 17

Demobilization
As specific project target tasks begin to reach completion, demobilization of
resources comprising of manpower, equipment, and site facilities is started in
a phased manner. Shifting of resources from one work location to another
needs analytical review of project progress and the responsibility lies with Site
Manager who develops demobilization strategy with assistance of Planning
and FEDC Manager. A Demobilization schedule is prepared for all the
demobilization activities. This is based on demobilizing resources from site in
a manner that progress is not affected and unnecessary costs are avoided.

17.1 Human Resources


The Planning and FEDC Manager draws up the plan for demobilization for all
Human Resources in consultation with the Discipline Incharges. This is then
submitted to the Site Manager for approval. The plan for demobilization of
workers shall be provided to I/C PP&A while the one for supervisory staff
shall be sent to Head HRD at HO and the BA head. Project Performance
appraisals shall be filled out for all staff before they are demobilized.
I/C PP&A shall look after the arrangements for the demobilization of all the
workers. Head HRD at HO in consultation with the BA head shall issue
transfer or release orders for supervisory staff
For further details please refer to the following documents
HRD/SOP-01 Human Resource Planning

17.2 Equipment and Plant


After sufficient progress has been achieved Planning and FEDC manager shall
draw up a plan for demobilization of equipment. This will be discussed with
the discipline incharges and finalized with the Site Manager. The release of
equipment is discussed with the BA Head and also intimated to Head Office
to determine, if it can be utilized elsewhere. While planning release of
equipment, rental equipment is to be released earlier than Descon owned
equipment. The finalized schedule is communicated to the I/C E&P at site to
make the equipment ready for return/shipment as the case may be.

17.3 Project Site Facilities


The demobilization plan for temporary site facilities and the camp shall be
prepared and implemented by I/C PP&A site after approval of the Site
Manager. The site shall be restored to the condition agreed with the client in
the contract document.

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17.4 Dispatch
Before dispatch from site a person authorized by the Site Manger for this
purpose inspects all items that have been demobilized and are to be dispatched
to another site. He ensures that the condition of the goods is recorded and that
the item being dispatched is properly protected and secured for transportation.
For further details please refer to PC/SOP-04 Project winding up and
demobilization.

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PROJECT PLANNING & EXECUTION MANUAL

CHAPTER 18

Project Closeout
At the completion of the project a detailed close out report is prepared. This
report is meant to serve the following purposes.

Consolidating all the project performance parameters in one report.

Having details available for reference in preparation of subsequent


proposals.

Updating estimation norms.

Comparing performance of similar projects.

The Planning and FEDC Manager has the responsibility of preparing the
report and keeping this in view he ensures that the relevant data is maintained
and readily available for inclusion in the report. Salient items in the report are
listed below:
Project Organization, initial and at peak

Charts

Project master schedule, plan vs actual bar chart

P3

Progress curves for main activities

P3

B.O.Q. original and final


Direct Manpower Histogram, planned and actual

P3

CCTR wise direct material consumed

ACCPAC

CCTR wise consumables consumed

ACCPAC

List of method statements prepared at site


Details of site facilities established
List of subcontractors
Copies of sub-contracts
WPS

ITS

List of welders with productivity and repair rate

ITS

Total weld inches


List of vendors with specialization
MRP
Major tools and plant deployed
Rental Rates
CCTR wise budgeted and actual machine months
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Craft wise average rate per man-hour


CCTR wise cost vs. revenue
Final analytical study
Final cash flow curve
Project cost analysis report
Direct vs. indirect ratio
Major achievements
Major bottlenecks
Recommendations for future similar projects
Detailed table of contents of the report showing the source of information is
available as PC/Annex 1 with PC/SOP-04
Copies of the report are prepared for the BA office and for PMS

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CHAPTER 19

Project Review and Feedback


The success of an organization is very much dependent on its capacity to
utilize the lessons learnt on the completed and ongoing projects in being better
prepared for taking on future projects. In Descon the system followed is based
on analyzing the weekly and monthly performance of each project and using
this information to evaluate all similar projects as well as in preparing bids for
upcoming projects. At the closeout of the project a detailed close out report is
prepared. This is then analyzed by the Project Management Systems
department and recommendations are made for updating the estimation norms
used by Proposals.

19.1 Evaluation of Project Performance


The weekly Project Performance Reports received from all the projects are
reviewed in detail by the PMS department. In case the causes of variances
observed from the budgeted resource utilization are not explained then queries
are sent out by PMS to the Site Managers for elaboration. These reasons are
recorded for the project and if there is need for correction in the proposal
preparation process these are communicated to Proposal Department.

19.2 Sharing information company wide


Information received from project sites is made available on intranet (eLibrary) for the benefit of all the user departments. The following is kept
updated by PMS for each project on the net.
Executive Summary

Monthly

Manhour Analysis Report

Monthly

Manpower Strength Report

Monthly

Monthly Progress S-Curve

Monthly

Weekly Progress S-Curve

Weekly

Equipment Rental

Monthly

Cash Flow Curve

Monthly

Revenue vs Cost S Curve

Monthly

19.3 Analysis of Project Close Out report


The close out report prepared at the end of the project described in chapter 19
is provided to PMS for review. During this review the following are
thoroughly analyzed.

Man-hours per unit for the main cost centers.

Direct Material consumption.

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Consumables consumption.

Machine months CCTR wise.

BOQ original and final.

Machine rental rates.

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PMS prepares observations on the reasons for variance and gives their
recommendation for future similar projects. These could include some change
in estimation norms or the difficulty factors to be used for an area. These are
then reviewed by the higher management and finalized for action by Proposal
Department. The review also includes an assessment of the overall project
performance and decides the action to be taken for recognizing the key players
whose contribution helped achieve good results. An action plan is prepared for
incorporation of the lessons learnt on this project into future projects.

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Total list of Annexures for Project Planning and Execution Manual


Chapter
Introduction
Project Planning

Attachment
Description
Reference
1.1 Overview Project Planning and Execution
Typical Site Organization
6.1
2.1
2.2
2.3a
2.3b
2.3c
2.3d
2.4
2.5
2.6a
2.6b
2.7
2.8
2.9
2.10
2.11
2.12
2.13

Mapping of OBS with WBS


List of CCTR with Quantities
Activity relationships
Activity relationships
Activity relationships
Activity relationships
Critical Path
Consolidated resource requirement (manpower)
Resource requirement before smoothing
Resource requirement after smoothing
Sample of Level 1 plan
Sample of Level 2 plan
Sample of Level 3 plan
Free float
Total float
Forward pass
Backward pass

Systems in Descon

3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8

DCS flow chart


DPMS flow chart
MMS flow chart
ITS Flow chart
GDMS flow chart
GDES flow chart
SMART flow chart
Overall system integration

Pre Mob. Planning

4.1
4.2
4.3
4.4
4.5
4.6

Pre Mob. Planning flow chart


List of documents from Proposal to BA
Typical mobilization plan
Typical equipment deployment schedule
Typical manpower deployment schedule
Typical HSE plan TOC
Typical equipment deployment schedule
Typical manpower deployment schedule

Mobilization
Organization

6.1
6.2
6.3
6.4

4.4
4.5

Typical Site Organization


Responsibility Matrix
Concept of responsibilities
Site Manager

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PROJECT PLANNING & EXECUTION MANUAL

Chapter

Attachment
6.5
6.6
6.7
6.8
6.9
6.10
6.11
6.12
6.13
6.14
6.15
6.16
6.17
6.18
6.19
6.20
6.21
6.22
6.23
6.24
6.25
6.26
6.27
6.28
6.29

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Description
Planning and FEDC Manager
FEDC Engineer
Planning Engineer
System Administrator
Quantity Surveyor
Document Contrler
Planer, Discipline
Central Material Controller
Construction Manager
Discipline Incharge
Discipline Engineer
Scheduler
Discipline Supervisor
Area Material Coordinator
Financial Controller
Incharge Contracts
Cost Controller
I/C QA QC
I/C HSE
I/C Descon Material Store
I/C Site Procurement
I/C Client Material Warehouse
I/C PP&A
I/C E&P
I/C Site Setup

Reference

Planning &
Scheduling

7.1
7.2
7.3
7.4
7.5
7.6

Flow chart for preparation of 3 month look ahead


Sample of 3 month look ahead
Flow chart for preparation of 4 week look ahead
Sample of 4 week look ahead
Flow Chart for preparation of DSTS
Sample of DSTS

FEDC

8.1
8.2
8.3
8.4

Flow chart for handling of drawings


Flow chart for handling electronic drawings
Query Sheet
Query register

Material
Management

9.1
9.2
9.3
9.4

System for Descon Supplied Material


Client Material Handling
Reconciliation Reports
Disposal of Surplus Material

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Chapter
Monitoring of
Progress

Attachment
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10

Construction
works
Handling of Extra
Work

Description
Process flow
Project top sheet Overall
Project top sheet Discipline wise
Manhour analysis report
Consumable analysis report
Monthly manpower Histogram
Crew Composition
Daily Diary
Bottlenecks report
Latest Finish Plan

12.1 Extra work Form


12.2 Extra Work Register
12.3 Flow diagram for handling of Extra Work
0
13.1 Cost Accumulation Flow Chart
13.2 Rolling Cash Flow / Forecast

Feedback to Client

14.1 Sample of daily progress report

Feedback to BA and PMS

Reference

11.1 List of quality documents

Cost controlling

Invoicing Client

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0
Sample of daily progress report
14.1
Daily Diary
10.8
16.1 Format of weekly Project Performance Report
Guidelines for preparation of Weekly
16.2 Report

Demobilization

Project Close out

Project Feedback

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