85M102006D Shaw Stone & Webster, E&C Shaw Stone & - PDF document

85M102006D

Shaw Stone & Webster, E&C Shaw Stone & Webster, E&C Presentation Presentation to to ECRI ECRI Conversion from OBE to Lump Sum - Conversion from OBE to Lump Sum - Pitfalls and Issues Pitfalls and Issues Dr Gareth Job 2008 85M102006D

Perceived CLSTK Advantages Perceived CLSTK Advantages • Reduced Cost • Increased Schedule • Improved Alignment • Early Procurement Cycle • Value Engineering 85M102006D

Contract Types Contract Types • Converted LSTK (Pure Open Book) • Converted LSTK (Fixed contingency/allowances) • Adjusted LSTK • Conversion Services (LS or Reimbursable) 85M102006D

Conversion Timing Conversion Timing E s tim ating Confidenc e Levels 100% 16% Definitive Estimate 95% 14% B udget Estimate 90% 12% Co mm itments o f Equipment P O's. Develo pment o f B ulk M aterial Quantities. M arket P ricing Levels Fixed Sub-Co ntract P ricing Levels agreed 85% 10% Level of Confidence Estimate Allowances 80% 8% Feasibility Estimate 75% 6% B asic Engineering P hase 70% 4% Detailed Engineering & P ro curement 65% 2% P .O. P laced fo r Co mpresso rs P .O's fo r B alance o f Equipment P laced 60% 0% 1 2 3 4 5 6 7 8 9 10 11 12 85M102006D M onth No Level of Confidenc e E s tim ate A llowanc es

Why Convert? Why Convert? • Risk Management (Transfer) • Financing Requirement • “One Stop” Contractor • Schedule 85M102006D

Why Not Convert? Why Not Convert? • Non Alignment/Agreement of Open Book Estimate – MTO’s – Allowances – Contingency • Balance Book Funded • Lack of Comparison • Different Perceptions of Risk • Conversion Fee 85M102006D

Shaw Stone & Webster, E&C Shaw Stone & Webster, E&C Presentation Presentation to to ECRI ECRI Conversion from OBE to Lump Sum - Conversion from OBE to Lump Sum - Pitfalls and Issues Pitfalls and Issues QUESTIONS? 85M102006D