When the contractors were confronted with this, it was not difficult to get them to accept that the existing norms were indeed grossly over-estimated and should be reviewed. They agreed to reduce the existing norms by 25% across the board with immediate effect, while the review got under way.
A joint company/contractor team was set up to formally review and agree revised norms on an urgent basis.
Benchmarking and Results
On return to my base, I initiated an intra-group benchmarking exercise. The purpose was to compare the norms for unit maintenance activities which were agreed between other associate companies and their contractors. A number of companies welcomed this and agreed to participate. Data gathering and processing took some time and effort. Once accomplished, however, this proved to be very useful. The product was regularly used during subsequent performance reviews. Many companies realized for the first time how far their norms deviated from that of their peers. Although some deviations could be explained by special local conditions, these benchmarks provided a basis for constructive discussion between contractor and company.
Some of the results, together with the question which generated that unit rate, are illustrated in Figures 7.1 to 7.7. Locations are marked AAA, BBB, etc., to protect their identity.
Carry out excavation activities to expose an underground pipeline—to in-
Figure 7.1 Excavation & Refilling—Relative Costs
60 Chapter 7 spect the protective coating system, check for corrosion, and take wall thickness measurements. The soil surface is not covered by pavement or any other cover; the excavated soil can be put along the trench (the soil is not contaminated so the excavated soil in total can be put back). The total amount of soil to be excavated and backfilled is approximately 30 cubic meters. See results in Figure 7.1.
Removal of cladding (galvanized iron or aluminum sheeting) and rock wool insulation over a length of 30 meters of a 6" and a 12" pipe, lying next to each other, in a pipe bridge of approximately 6 meter height. The lagging and rock wool insulation are in good condition and can be put back after inspection of the pipe. Scaffolding and grit blasting or power brushing are excluded from the contract. See results in Figure 7.2.
Figure 7.2 Insulation Removal and Replacement-Relative Costs
Erect and, after use, remove tubular scaffolding for the above-mentioned example (insulation work on a pipe bridge) to the local safety requirements. See results in Figure 7.3.
The 6-inch pipe mentioned in the example for insulation needs to be grit blasted to SA 2.5. Estimate man hours. See the results in Figure 7.4.
Figure 7.3 Scaffolding-Relative Costs
Figure 7.4 Grit Blasting—Relative Costs
As part of a job, spades have to be placed to isolate a vessel. For this purpose, 4 nos. 8" 300#, 4 nos. 6" 300#, and 6 nos. 2" 150# spades have to be installed in the existing line work. Estimate man hours required per spade of each size, including cleaning the flange faces, placing new gaskets, placing
62 Chapter 7
new stud bolts, and de-spading after the job is completed. See results in Figure 7.5.
Figure 7.5 Spading/Despading Pipes—Relative Costs
Figure 7.6 Welding 4", 6," and 10" Pipes—Relative Costs
A few lines in the pipe bridge mentioned in the examples above need to be renewed; each has a length of approximately 30 meters. These pipes are 4",
6", and 10" in size; all are schedule 80 carbon steel. Safe-to-work preparations, scaffolding, and insulation work are done by others. Please estimate man-hours per completed weld of each size, including joint preparation, grinding, alignment, and welding. See results in Figure 7.6.
Valve Gland Packing Renewal
During a shutdown, various types of gate valves need to be repacked (all old packing rings to be removed from the stuffing box and renewed). The total number of valves to be repacked is approximately 40 pcs of sizes 4, 6, and 8 inch. Estimate the man-hours required per piece of each size. See results in Figure 7.7.
Figure 7.7 Valve Gland Packing-Relative Costs
This kind of benchmarking proved quite simple to carry out. It proved useful in checking contract prices and in preparing estimates prior to inviting competitive bids.