139405799 END 3 009 Engineering Estimating

7/28/2019 139405799 END 3 009 Engineering Estimating

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The purpose of this procedure is to define the

engineering estimating works in relation to bid

proposal development and preparation of ProjectBudget.

This procedure covers the methods used by

Engineering Department for estimating works and

the interrelated sequence to achieve a competitive

bid proposal and preparation of Project Budget

Estimates.

The scope covers Onshore and Offshore

construction works.


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BID APPROVAL SHEET (BAS)

Form No. MKD-4-006 is a document prepared by MMG Marketing

Department highlighting items of the bid, and including the customers

name, scope of work, type of contract, bid due date, special

information and executive management approval to proceed with the

engineering estimate.

ESTIMATING WORKSHEET

Form No. END-4-009B , is the worksheet used by the Estimating

Engineer for summarizing the data for total quantities, labor rates,man-hours, description of materials, unit cost of materials &

consumables, Equipment line-up & rental costs, subcontract quotation

costs and the grand total of the quantities and costs.

COSTING SUMMARY SHEET

Form NO. END-4-009D, is a summary of costs prepared by Engineeringupon completion of the bid estimate which covers costs for labor,

material, equipment rental, mobilization & demobilization, catering &

accommodation, subcontract work, contingency, projection and

escalation, medical & dental, and other costs representing the total

cost of the bid price.


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(continuation)

PROJECT BUDGET

Form No. END-4-009E, is a budget prepared by the

Engineering for the performance of a newly awarded

project. This covers direct and indirect cost.

DIRECT COST

Is cost for direct materials, labor, subcontract works asdefined in the summarized breakdown of Form END-4-009E

INDIRECT COST

Is cost for the mobilization & demobilization, home office

cost (i.e. requisitioning / procurement, task force, drafting,as-built, shop drawing. Etc..) construction of temporary

facilities, plane fare, recruitment, iqama, freight and

handling, field supervision , administration & support labor

and lied expenses.


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CHIEF ENGINEER

Overall management of the Engineering Department.

ESTIMATING MANAGER

Manage the Engineering Department estimating works,

prepare project budget.

ESTIMATING SUPERVISING ENGINEERSupervises the respective discipline engineering estimate.

ESTIMATING ENGINEER

Performs the respective discipline engineering estimate


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BID ESTIMATING

The Engineering Document Controller check all the bid documents from the

Central Documentation Control Section and forward to the Chief Engineer for

review. After his review, the bid documents are forwarded to the ProposalManager who makes a further review of the documents before distribution to

the Discipline Estimating Engineers. A review Record Sheet (Form No. END-

4-009F) will be signed by the Estimating Manager, Discipline Estimating

Supervising Engineers and Discipline Estimating Engineers after completing

their respective reviews.

The Discipline Estimating Engineer will make himself familiar with the scopeof the bid, will scan for possible subcontract works and availability of

material to be supplied by MMG.

The Discipline Estimating Engineer will highlight all important items in the

scope and check that no bid items have been overlooked. An Engineering

Estimating Check list (Form END-4-009C0 which identifies relevant items is

completed by checking the boxes for items considered to be part or not partof the bid scope. The Check List will be double check by the Discipline

Estimating Supervising Engineer. A blank format, sheet 11 of 11 Form END-4-

009C, will be completed up by the Discipline Estimating Engineer or by the

Discipline Estimating Supervising Engineer indicating other relevant items

for consideration.


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(continuation)

The Discipline Estimating Engineer shall produce a material quantity take-off

for each specific scope covered in the Estimating Work Sheet (Form No,

END-4-009B) The data on the Estimating Work Sheet are companyconfidential and is therefore not transferred to the customer provided

Summary Sheet.

Attendance to Job-Explanation Meeting and Site Visit will either be optional

or mandatory. Where the Bid Instruction Specification requires participation

to either or both, The Estimating Engineer will attend the Job-Explanation

Meeting and participate in Site Visit, However, where site visit is necessary ,on optional case, due to lack to bid information's, the Discipline Estimating

Engineer will conduct a site visit to get the true picture of the field situation.

The site visit will help the Discipline Estimating Engineer in his evaluation to

make realistic considerations and assumptions in his estimates that will

have significant impact on the bid final costing.

Where the attendance of the Discipline Estimating Engineer is not possible, theChief Engineer / Estimating Manager will appoint a deputy to attend the Job-Ex

Meeting and Site Visit.

For Bid projects located in Yanbu, Jeddah or elsewhere, where MMG has an

existing project, the Chief Engineer / Estimating Manager may elect to dispatch

the Discipline Estimating Engineer to the site or may request the Project Manager

of that existing project to deputies a representative to attend the Job-Ex and

participate the Site Visit.


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(continuation)

Grey areas in the work scope that required contract evaluation shall be

referred to the Contract s Department for prior clarification with

Customer.

Materials to be supplied by MMG are identified, quantified and if there is

no current cost (within 90 days) available for the material, Cost Request

(END-4-007A) is prepared. This form is forwarded to the Central

Purchasing Department (CPD) to obtain prices. CPD shall furnish

Engineering with at least three (3) suppliers quotation to arrive atminimum cost for major MMG supplied plant permanent materials.

Where there is no response to the Cost Request (END-4-007A) at the

due date required from CPD. (reference Procedures No. END-3-007

and CPD-3-006) the Discipline Estimating Supervising Engineer and /

or the Discipline Estimating Engineer shall follow up the Cost

Request with CPD, Likewise, CPD shall advise concerned DisciplineEstimating Engineer regarding the status of the Cost request or if

the prices is not available from the vendor on time for inclusion in

the bid proposal. For prices not available, the Estimating Manager

will advise to use the previous canvass price.


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(continuation)

The Discipline estimating Supervising Engineer will determine items to

be subcontracted, prepare a Request for Quotation, using Form No.

END-4-007D and forward to Contracts Department. The request willinclude, the subcontract technical specifications, list of proposed

subcontractors, and applicable drawings. Costs from quotations will be

included in the final costing using the applicable Project Code of

Accounts, PCD Procedure No. OCD-3-005. Contracts Department shall

provide Engineering with the updated list of approved subcontractors.

When all quantities have been establish, they are entered into thecomputer using Lotus/Excel Spreadsheet. Form No. END-4-009B. This

gives the direct cost for consumables, equipment rental cost and other

determined subcontract item costs.

Once all data, such as direct man-hours, materials & consumables

quantities and equipment line-up has been summarized, the estimate isanalyzed making use of the standard unit man-hours in the Estimating

manual in Procedure END-3-011, by extracting the overall average

productivity rate in various terms such as mhr/lm, mhr/ton, mhr/dia-inch,

mhr/dia-m,. This data is then compared with previously awarded project

estimates and adjusted as necessary.


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(continuation)

The Discipline estimating Supervising Engineer checks the progress

of the estimate, correcting any discrepancies, and highlights any

items which may have been overlooked.

The Discipline Estimating Supervising Engineer shall review and

check the status of the cost request, any queries on grey areas, or

other items relevant to the bid estimate.

Addenda to the bid, received from the Customer are brought to theattention of the Discipline Estimating Engineer for consideration.

Once the estimate is completed, the Discipline Estimating

Supervising Engineer review the final quantities, direct man-hours,

material and equipment costs, including outside rentals.

Corresponding adjustments to man-hours and cost are made after

further analysis of other cost considerations and assumptions.

The Estimating Manager conducts the final review of the estimate,

checks the breakdowns and commercial conformity of the proposal.


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(continuation)

The Discipline Estimating Supervising Engineer supplies the

Technical / Commercial / Documentation Proposal Manager the

direct man-hour breakdowns per activity using Form No. END-4-

009B, to provide a reference for extracting indirect man-hours,

indirect equipment-hours, and the formulation of bid construction

schedules by the Proposal Engineer assigned from bid Planning and

Scheduling programs. Indirect man-hours and equipment-hours are

then forwarded to the Bid Development Proposal Manager forcosting.

The Discipline Estimating Supervising Engineer forward all direct

cost breakdown to the Bid Development Proposal Manager, The Bid

Development Proposal Manager carry out the indirect costing an

prepare the comprehensive Commercial Proposal. A costing

Summary Sheet (Form No. END-4-009D) is used for summarizing thecosting breakdown.

The completed Commercial Proposal is forwarded by the Bid

Development Proposal Manager to the Estimating Manager for

review.


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(continuation)

Reviewed Commercial Proposal is forwarded to the Technical

/ Commercial / Documentation Proposal Manager for finalcompilation in the bid form, and finally forwarded to the Chief

Engineer for approval.

Upon approval of the Chief Engineer, the Commercial

Proposal is then presented by the Bid Development Proposal

Manager to the Management for review and any directionadjustment to the final bid selling price, if no adjustment is

directed, the Management makes the final approval.

Any directed adjustments are made by the Bid Development

Proposal Manager, and the adjusted commercial proposal is

returned to the Management for approval or with theabsence of an Executive Officer, a designated authorized by

the Management.


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(continuation)

PROJECT BUDGET

Upon award of a project, the Estimating Manager prepares a

Project Budget. The Estimating Manager prepares the

project budget using Form No. END-4-009E.

The Project Budget estimate covers all direct and indirect

cost, for the complete performance of the project. Thecompleted Project Budget is forwarded by the Estimating

Manager to the Chief Engineers approval.

The Project Budget is then discussed by the Chief Engineer

with the assigned Project Manager. Any adjustment is made

before the budget is approved by the Project Manager andfinally forwarded for final approval of Management.


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(continuation)

HANDOVER TO PROJECT TEAM

Upon approval of the Project Budget by the Management, the Chief Engineer willinstruct the Bid Development Proposal Manager to call a Project Briefing /

Handover Meeting, attended by the following department:

1. Executive Management

2. Engineering

3. Marketing

4. Projects

5. Projects Control6. Central Purchasing

7. Contracts

8. Quality Assurance / Quality Control

9. Loss Prevention

10. Finance & Accounting

11. Equipment Supply Division

12. Central Warehouse13. Human Resources

(Personnel & General Services)

Attendance is required by each participant in the Meeting Attendance register,

Form No. QAD-4-213 used by the chairing personnel. Subject and agenda of the

Project Handover Meeting is summarized using Form No. END-4-009G.


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(continuation)

Engineering will provide the Project Overview for the Project

Management Team and other parties involved.The Engineering Department will organize the Project Task Force,

whose function is define in Procedure END-3-003, headed by the

Project Task Force Supervising Engineer, to provide assistance to

the assigned Project Manager prior to mobilization to the project

site.

The necessity for an organized Project Task Force is dependent and

flexible to the size of the project, and upon recommendation by the

Project Manager for its formation.

The Engineering Department will then turnover the supervision of

the Engineering Project task Force to the assigned Project Manager

together with all project contracts and Engineering Documents.

Distribution controlled copy of the approved Project Budget (Form

No. END-4-009E) is issued by the Engineering Chief Engineer to the

assigned Project Manager only, using the Transmittal Form No. QAD

4-202


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START

EXECUTIVEMANAGEMENT

FINAL APPROVAL

ESTIMATING MANAGER

PREPARE PROJECTBUDGET

END-4-009E

AWARDEDPROJECTS

BID

ESTIMATING

ESTIMATING MANAGER

FORWARD PROJECTBUDGET TO CHIEF

ENGINEER

END-4-009E

CHIEF ENGINEER

DISSCUSS THE BUDGETWITH THE ASSIGNEDPROJECT MANAGER

END-4-009E

CHIEF ENGINEER /PROPOSAL MANAGER

CALL PROJECT BRIEFINGHANDOVER MEETING /

PROVIDE PROJECTOVERVIEW TO PROJECT

MANAGEMENT TEAM

CHIEF ENGINEER

FORWARD PROJECTBUDGET FOR APPROVAL

BY MANAGEMENT

END-4-009E

CHIEF ENGINEER/PROJECT MANAGER

ORGANIZE PROJECT TASKFORCE, TURNOVER

SUPERVISION AND PROJECTDOC. TO PROJECT MANAGER,PROJECT DOCUMENTATION &

BID DRAWINGS

ENGINEERING DOCUMENTCONTROLLER

FORWARD ALL BIDDOCUMENTS FROM CENTRALDOCUMENTATION SECTION

TO THE ESTIMATINGMANAGER

BID DOCUMENT

ESTIMATING ENGINEER

ENTER ESTABLISHIEDQUANTITIES INTO COMPUTERPROGRAM FOR DIRECT MAN-

HOURS AND COST

END-4-009B / END-4-009B1

ESTIMATINGSUPERVISING ENGINEER

REVIEW FINALQUANTITIES DIRECT

MAN-HOURS,MATERIALS AND

EQUIPMENT COST

PROPOSAL MANANGER

PRESENT TO THE EXECUTIVEMANAGEMENT FOR REVIEWAND DIRECTION OF ANY

ADJUSTMENT TO FINAL BID

BID COMMERCIAL PROPOSAL

ESTIMATING MANAGER

REVIEW AND FORWARD TOESTIMATING SUPERVISING

ENGINEER

END-4-009F

ESTIMATING ENGINEER

IDENTIFY MATERIALSSUPPLIED BY MMG &PREPARE COST REQUEST FORMATERIAL & SUBCONTRACT

ITEMS

END-4-007A / END-4-007D

ESTIMATING MANAGER

CONDUCT FINAL REVIEWOF ESTIMATE CHECKBREAKDOIWN AND

PROPOSAL COMMERCIALCONFORMITY

TECHNICAL / COMMERCIAL /DOC PROPOSAL MANAGER

FORWARD COMMERCIALBID PROPOSAL TO THECHIEF ENGINEER FOR

APPROVAL


FURTHER REVIEW ANDDISTRIBUTE TO ESTIMATING

ENGINEER

END-4-009F

ESTIMATING MANAGER

ATTEND JOBEXPLANATION MEETINGAND PARTICIPATE IN

SITE VISIT


SUPPLY THE TECHNICALCOMMERCIAL/DOC PROPOSALMANAGER THE DIRECT MAN-

HOURS BREAKDOWN PERACTIVITY

END-4-009B

ESTIMATING MANAGER & TECH/ COMM / DOCUMENTATION

PROPOSAL MANAGER

REVIEW COMPLETEDCOMMERCIAL PROPOSAL /

COMPILATION TO BID FORMAND FORWARD TO CHIEFENGINEER FOR APPROVAL

END-4-009F

ESTIMATING ENGINEER

HIGHLIGHTS / CHECK BIDITMES ACCOMPLISH THEESTIMATING CHECKLIST

END-4-009F/END-4-009C

ESTIMATING ENGINEER

PRODUCE MATERIALQUANTITY TAKE-OFF FOREACH SPECIFIC SCOPE

END-4-009B1

PROPOSAL ENGINEER(Planning & Scheduling)

EXTRACT INDIRECT MHRS &EQPT HOURS ANDFORMULATED BID

SCHEDULES,FORWARDINDIRECT HOURS TO BIDDEVELOPMENT MANAGER

BID DEVELOPMENTPROPOSAL MANAGER

CARRY OUT INDIRECTCOSTING & PREPARE

COMPREHENSIVECOMMERCIAL PROPOSAL

END-4-009D

END


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139405799 END 3 009 Engineering Estimating

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