ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 27 September - - PowerPoint PPT Presentation

ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

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27 September 2006

ECRI Sponsors Meeting

Hilton Kensington Hotel – London Day 2 – Thursday 7th June 2018

WELCOME

ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

Session – 1

Welcome, Safety Moment, New Introductions, Moment & Review of Agenda

Rod Kyle, ECRI

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

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Session 1 – Safety Moment

John Ruckert, Vice President, Operations ECRI

ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

Session 1 – Safety Moment

HEARING LOSS PREVENTION

➢ Noise is the most common cause of hearing loss ➢ One Third of hearing loss is preventable ➢ Examples of sound levels:

➢City traffic noise – 80 db ➢Lawn mowers and motorcycles – 90 db ➢Wood shop and stereo headphones – 100 db ➢Loud bass in cars (when other cars feel / hear it) – 120 db ➢Rock concert and firecrackers – 140 db

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

➢ How loud is too loud:

➢You can’t hear someone 3 feet away ➢You have pain in your ears after leaving a noisy area ➢You hear ringing or buzzing immediately after leaving a noisy area ➢You hear people talking but can’t understand them

Session 1 – Safety Moment

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

➢ Prevention

➢Eliminate or reduce the noise level ➢When noise cannot be reduced – use protection ➢Limit the amount of time around the noise ➢Increase your distance from the source of noise

Session 1 – Safety Moment

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

Programme – Thursday 7th June 2018

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Session Time Description Discussion Leader 08.00 - 08.30 Registration / Refreshments 1. 08.30 - 08.40 Welcome, Safety Moment, New Introductions and Review of Agenda Rod Kyle / John Ruckert 2. 08.40 - 09.40 Keynote Address: “ Procurement Drives Value ” -- Paul Gibbs, Managing Director - UK, Bechtel 09.40 - 10.00 Tea / Coffee Break 3. 10.00 - 11.00 “ Cost Reimbursable? Not so Fast… ” -- Andrew Rhodes, President, The Rhodes Group 4. 11.00 -12.00 “ Contracting Trends ” -- Mark Job, Partner, Pinsent Masons LLP 5. 12.00 -12.50 “ SIG Meeting – Key Takeaways” -- John Ruckert , Vice President Operations, ECRI 6. 12.50 -13.00 “ Any Other Business / Wrap-Up and Close ” Rod Kyle 13.00 -14.00 Lunch 14.00 End of Day 2 Session / Departure

ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

Session – 2

Procurement Drives Value

Paul Gibbs, Managing Director, UK Bechtel

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

ECRI Sponsors Meeting

09.40 – 10.00 Coming Up – Sessions 3, 4, 5 & 6

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

Session – 3

Cost Reimbursable? Not so Fast…..

Andrew Rhodes President The Rhodes Group

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

Session – 4

Contracting Trends

Mark Job Partner, Transactional Construction & Energy Pinsent Masons LLP

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

Session – 5

SIG Meeting – Key Takeaways

John Ruckert Vice President, Operations ECRI

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

ECRI

CO CONST STRU RUCTI CTION

SIG Meeting – Key Takeaways

Best Practices Education & Training Programme Special Interest Groups Risk Based Review / Audit Secondary Data Bank Website & Data Bank Client / Industry Outreach Secondary Stakeholder Engagement

Seven (7) Core Work Fronts and Strategic Initiatives as Focus Areas:

ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

ECRI

CO CONST STRU RUCTI CTION

SIG Meeting – Key Takeaways

Best Practices Education & Training Programme

Special Interest Groups

Risk Based Review / Audit Secondary Data Bank Website & Data Bank Client / Industry Outreach Secondary Stakeholder Engagement

Seven (7) Core Work Fronts and Strategic Initiatives as Focus Areas:

ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

SIG Meeting – Key Takeaways

SPECIAL INTEREST GROUPS (“SIG”) – OVERVIEW

➢ Established In 2010 to facilitate more informal discussions of

common and emerging risk issues among ECRI Sponsors in a similar sector of the E&C industry

➢ Existing SIGs are: Mega Projects; Development, Civil Building,

Power & Infrastructure Projects and Offshore Oil & Gas

➢ Members with a common interest can address their specific

issues rather than trying to deal with all matters within one meeting involving all of the Sponsors of ECRI

➢ Important issues identified in SIG meetings are often slated for

presentations at Sponsors Meetings and development of ECRI Best Practices

➢ Excellent Feedback from Sponsors regarding usefulness and

value-added by SIG concept

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

SIG Meeting – Key Takeaways

THE BACKDROP New geographies More difficult clients New type clients Larger projects Trends in T&Cs Skill / expertise leaving

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

SIG Meeting – Key Takeaways

THE BACKDROP New geographies More difficult clients New type clients Larger projects Trends in T&Cs Skill / expertise leaving >>>converging risks?

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

SIG Meeting – Key Takeaways

Knowledge Transfer and Resource Retention

➢ Step Change in Experience Loss

➢Not a transitional process ➢Losing to clients, retirement and consultants ➢Lasting impact of market downturn ➢Industry image – not green ➢Less traditional focus on “career”

➢Resources needed for Mega Projects

➢ Mitigation

➢ Employee engagement

➢Improve E&C marketing ➢“Invest” for the future

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

SIG Meeting – Key Takeaways

Trends in Contract Terms

➢ Elevated Risk Profile

➢Proposals – “no exceptions” to terms ➢Reimbursable Work with LS Contract T & C’s ➢Consequential damages – Waivers // Carve-outs ➢LD caps increasing ➢Overall limits of liability increasing ➢Extended payment terms (use of contractor’s cash) ➢Change Order terms – “must execute” ➢Penalties for removing key people - excessive #s (e.g. 70) ➢…..

➢ Far East Contractors more willing to accept

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

SIG Meeting – Key Takeaways

Operational Risks

➢ Owner Movement of Risk to Contractors

➢Accept results of FEED performed by others ➢Subsurface risks contractor’s responsibility ➢Procurement mindset by owner – no value placed on quality, safety, schedule certainty ➢Ownership of schedule float ➢Accept risk of inflation ➢Accept responsibility for evolving technology

➢ No longer true that party best able to bear the risk

de facto does

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

SIG Meeting – Key Takeaways

Risk Trends in PPP Projects

➢ Owner Movement of Risk to Contractors

➢$$ penalties in addition to LDs ➢Counterparty indemnifications, e.g. revenue loss from related party to contractor ➢SPV pushing terms to EPC contractor not at the table ➢Administrative penalty framework during the design-build phase on P3s

➢ Selection of JV partner critical

➢Unique skill sets are needed for successful JV operations ➢Partner selection based upon commercial and scope considerations often skimps on due diligence resulting in project execution problems

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

SIG Meeting – Key Takeaways

SIG Meetings – London 2018

➢ Development, Civil, Buildings, Power and Infrastructure

➢ 7th June (14.30hrs – 17.30hrs) ➢ Gunnell Room

➢ Offshore Oil and Gas

➢ 8th June (08.00hrs – 12.45hrs) ➢ Chelsea Room

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

Session – 6

Day 2 Any Other Business / Wrap – Up and Close

Rod Kyle, ECRI

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

Session 6 – Day 2 Meeting Wrap-Up and Close

➢ After written Approvals, today’s Material will be

posted on the ECRI private website

➢ Next Sponsors Meeting will be in Houston, TX, USA

• - Venue : Hilton Houston Post Oak
• - Welcome Reception: Tuesday 4th December ‘18
• - Sponsors Meeting: Wed. / Thurs. – 5th. Dec and 6th.

Dec ’18

• - Dinner: Wednesday 5th December ‘18 – Masraffs

Restaurant

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

Session 6 – Day 2 Meeting Wrap-Up and Close

➢ Other Meeting Dates :

• - Next ECRI Board Mtg., Houston, Tuesday 4th Dec ‘18
• - Next SIG Mega Projects Mtg., Houston in October ‘18

with Date / Venue TBC

• - Next Development, Civil, Power, and Infrastructure SIG

Mtg., Thursday 6th December‘18

• - Next Oil & Gas SIG Mtg., Friday 7th December ‘18
• - Regional E & C Risk Courses / Master Classes will be

given for Sponsor Groups in the Americas, Europe. Possibly India and Far East /APAC.

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ECRI

ENGINEE RING & CONSTRUCTION RISK INSTITUT E

Thank You for Attending

At ECRI – We are raising the Bar in Risk Management THANK YOU