1. presented by Keith J. Platte, P.E. Construction Contracting The Rollercoaster Construction Contracting The Rollercoaster R. W. Beck, Inc. IPED COAL POWER CONFERENCE January 18-19, 2007 St. Petersburg, FL

2. A/E Approach Owner Architect Engineer Procure Major Equip General Contractor Final Commiss. & Testing Substations & Elec. Inter.

3. CM Owner Engineer Procure Major Equip Construction Manager Substations & Elec. Inter. Sub- Contractor

4. CM Variation Owner Engineer Procure Major Equip Construction Team Substations & Elec. Inter. EPC Sub- Contractor Construction Manager

5. Multiple Prime Construction Manager OE Owner Engineer Procure Major Equip Contractor Start Up & Commissioning Contractor

6. EPC Contract (turnkey) Substation EPC Contractor EPC Contractor Owner Engineer Procurement Construction Start Up & Testing

7. Contracting Time Line A/E Approach Mega-projects Cost Reimbursable 1970 1980 1990 2000 2006 Move to EPC Contracting IPP’s Commence EPC Contracts are Prevalent Gov’t Supports EPC as Contract Method of Choice Move to Alternative Contracting CM Multiple Prime

8. RISK $ Environment Engineering Plant Performance QC QA Schedule Holders Owner Construction Manager EPC Contractor Engineer Owner Construction Manager EPC Contractor Engineer

9. What Type of Contracting Approach is Correct?

10. Drivers  Owner internal capability  Bond market  Contractor financial condition  Major equipment supplier’s financial condition  Contractor bankruptcies  Labor market  Insurance market  Owner’s, engineering company’s and contractor’s risk tolerance  Regulatory environment

11. EPC Contract  Design & Engineering  Procurement all Components  Construction  Schedule  Cost  Quality  Performance  Construction Permitting  Start Up & Commissioning Today  ?  ? ?  ?  ?

12. Future  Mix of EPC contracting, multiple prime, and construction management  Pushback on various commercial terms  E.g. Limit of liability, fixed material cost, guaranteed schedule, lump sum cost, etc.  “Open book” concepts

13. Questions Keith Platte, P.E. R. W. Beck, Inc. kplatte@rwbeck.com (303) 299-5264 Keith Platte, P.E. R. W. Beck, Inc. kplatte@rwbeck.com (303) 299-5264 IPED COAL POWER CONFERENCE