1. AACE Internationals 52 nd Annual Meeting and ICECs 6th World Congress on Cost Engineering, Project Management, and Quantity Surveying © 2008 AACE International What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? By Bruce Bradley – Fluor Re-counted by Habib Hajjar – SNC-Lavalin

2. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 2 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? Introduction Background History USGC Man-hour Development Site Productivity Efficiency Potential Conflicts Alignment References

3. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 3 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? Introduction Bruce Bradley, Manager of Estimating, Fluor, Houston, TX 28+ years in the EPCM industry Current department staff 70+ BBA in Business Management, Texas A&M University, 1979 Three primary employers during this timeframe, all of whom believed their baselines were the baseline! Two events during career stand out: –Two simultaneous projects near Baytown, TX –JV arrangement for a Louisiana project

4. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 4 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? Background USGC Manhours an overused phrase Most everyone nods affirmatively signifyingagreement In reality, not a single, identifiable baseline No one really knows what the 1.0 is Not a deep, dark secret, but instead, a well known misunderstanding!

5. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 5 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? History First significant oil discovery in Corsicana, TX, 1894 Well known Spindletop discovery near Beaumont, TX 1901 Oil discovery led to oil production, which led to oil refining First refineries located near coastal areas for port access and shipping Engineering & Construction companies for refineries developed Supply and manufacturing companies created

6. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 6 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? Texaco founder Joseph S. "Buckskin Joe" Cullinan

7. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 7 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? U.S. Gulf Coast

8. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 8 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? USGC Manhour Development – cont. ***Speculation*** Construction labor data monitored and accumulated –Possibly by the worlds first cost engineer! Metrics probably included manhours to install primary refinery components: –A cubic yard of concrete –A ton of steel –A piece of equipment –A foot of pipe –A foot of wire/cable and conduit –A tagged instrument –Other items as required

9. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 9 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? USGC Manhour Development – cont. ***Speculation*** New projects may have reviewed this data in their planning stage Individual tasked with this activity may have been the first cost estimator! As competing companies were developing, they may have performed their own historical data analysis, thus determining their own manhour baselines Construction workers undoubtedly migrated back and forth between projects New and improved construction methods and technology

10. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 10 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? USGC Manhour Development – cont. ***Speculation*** New information and old probably mixed together Data not easily normalized Each company adopted their own data as unique based on their management style and execution methods Results became each individual companys standard reference point Each company believed their data to be the USGC baseline!

11. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 11 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? Site Productivity Efficiency As construction moved away from the gulf coast, a new problem arose Reliance on local construction workforces unfamiliar with refinery intricacies Determination may have been the need to make adjustments to their baselines Result would have become a site productivity adjustment Upon new project completion, actual effort hours may have been compared to their baseline

12. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 12 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? Potential Conflicts Larger, more complex projects not as simple as baseline history Companies working together in Joint Venture arrangements probably had different baselines JV projects may have been segregated among the partners by units or geographical boundaries Each developed their own baseline man-hours, agreeing to develop a site productivity adjustment together

13. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 13 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? Alignment More in-depth analysis began taking place Focus into sub-categories became more prevalent –Ex.: Instead of total CY of concrete, looked at: Paving Simple foundations Complex foundations Elevated structures JV efforts could analyze their respective baselines against one another by digging into more detail

14. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 14 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? Alignment – cont. Further productivity analysis into: –availability of work force –skill of work force –work space congestion / area per worker –working at grade versus elevated work –weather conditions –work hours per week –single shifts versus double –turnaround versus non-turnaround –grass roots versus revamps Todays common estimating software systems allows for easier collaboration

15. AACE Internationals 52 nd Annual Meeting & ICECs 6th World Congress © 2008 AACE International 15 What is the U.S. Gulf Coast Baseline when Estimating Site Productivity? References 1.Brown, Stephen P. A. and Mine Yucel, Do Higher Oil Prices Still Benefit Texas?, Federal Reserve Bank of Dallas, www.dallasfed.org, OCT-05. 2. Koottungal, Leena, Survey Editor, 2007 Worldwide Refining Survey, Oil & Gas Journal, 24-DEC-07. 3. Ramos, Mary G., Oil and Texas: A Cultural History, The Texas Almanac, www.texasalmanac.com, 2000- 2001 Edition.