SAUDI ARAMCO

HARADH/KHUFF PROPOSAL

SAMPLE PROJECT CONTROLS PLAN

FOR FRONT END ENGINEERING DESIGN
PACKAGE (FEED)
INTRODUCTION
For the FEED portion of the contract, the primary objective is to assure that KBR
internally plans and monitors progress to achieve the schedule goals required by
Aramco to support the issue of LSTK bid packages.
The Project Controls work processes, which include Estimating, Scheduling and Cost
Control, will be high-priority activities on this Front End Engineering Design Project.
KBRs highly experienced Project Controls professionals understand that achieving
budget and schedule are essential characteristics of successful projects. They further
understand that working together as an integrated and seamless team of contractor and
client personnel is of paramount importance in the achievement of these goals.
Project Controls Management
KBR has extensive experience in controlling a wide variety of worldwide projects
encompassing the entire range of project scopes of work. Our proven project
management systems have achieved enviable records of success. All of the project
management functions required for effective engineering, procurement, construction,
commissioning and start-up execution are incorporated.
The Project Controls work process consists of the following components:
1. Identification of requirements
2. Subdivision of the work
3. Quantification of the work and the estimation of the required resources
4. Sequencing the work
5. Resource scheduling
6. Accumulation of data relating to commitments and actual expended costs
7. Performance measurement through earned value progress reporting
8. Performance evaluation versus the project baseline
9. Analysis to identify trends
10. Corrective action to minimize the impact of adverse deviations from the plan
11. Change Management

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12. Forecasting
13. Project Close out
The plan for each of these activities will be described in detail in the Project Controls
section of the Work Plans which will be coordinated among project participants,
approved by KBR and Aramco. This Project Control Plan will be available for review and
comment soon after contract commencement.
Project Controls Organization
The assigned Project Control Manager will be responsible for the cost and schedule
control and estimating activities, and this person will report directly to the Project
Manager. KBR will assign a Senior Cost Engineer and a Senior Project Scheduler to
the project on a full time basis immediately upon commencement of the contract,
consistent with the organizational chart presented in Attachment _________.
Cost Control
The Project Cost Control Specialist is responsible for budget set-up and control, change
management, commitments and actual cost recording and monitoring, cost trending and
reporting, trend analysis, and forecasting. Specific procedures describing each of these
responsibilities will be included in the Project Control Plan.
Work Breakdown Structure
For the control functions to be effective, the work and resources of the project must be
properly organized. The project scope will be defined by a Work Breakdown Structure
(WBS) that will subdivide the project into manageable portions for control purposes.
The WBS is developed considering the Aramco and KBR management execution
philosophies, and engineering design package concepts. It will be established soon
after project award and included in the Project Control Plan. This subdivision of work
encompasses components of both the organizational structure and the coding
structures used on the project. This WBS will be incorporated into the project
management system, which will ensure coding consistency across all of the project
management functions. Through the use of a common project coding structure, all
elements of project controls for all phases of the project can be integrated.
Change Management
We would not anticipate many changes during the course of project execution.
However, if potential deviations to the baseline are identified, they will be processed
through the change control process. The object of this process is to have NO
SURPRISES during project execution. Early identification and resolution of potential
changes is the requirement.
Change control covers the process for communicating and controlling changes to the
baseline scope, budget, and schedule. The project team uses project deviation notices
(PDN) to document requested changes to the baseline. The change control process
begins with the initiation of a PDN. This document can be initiated by any member of
the project team, and it is the first indication of a potential deviation from the project
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scope, schedule or estimated cost. The PDN is reviewed by the appropriate supervisor,
who may forward the deviation for further processing or disapprove it and halt further
action.
The PDN then goes to the appropriate project engineer, or the project manager for
determination of further action. The PDN is classified either as a scope change or an
internal change. If approved to proceed with an estimate of impact, the PDN is
forwarded to Project Controls so it can be logged in, assigned a control number and
distributed to the impacted departments for an estimate of impact on material quantities
and labor work hours. An order-of-magnitude cost estimate of the proposed change is
prepared based on this information. The cost estimate will indicate work package
breakdown. PDNs are reviewed by scheduling personnel for potential schedule impact,
and this impact is incorporated into the estimate.
If the potential change represents a change in the scope of the project, it is forwarded to
Aramco to review the budget and schedule impacts to determine whether to proceed
with the work. If approved, the project team proceeds with the work associated with the
change, and KBRs Cost Control Specialist proceeds to prepare a Change Order. If the
PDN is disapproved, the work associated with the change is not implemented. The
Cost Control Specialist will maintain PDN and Change Order logs along with the related
back-up files. The logs and files will be reviewed with the project on a regular basis and
a summary of project change activity will be included in the project monthly report.
Trending and Variance Identification
The timely identification of potential problem areas, and the implementation of corrective
action, are key elements of effective project control. The continual monitoring and
analysis of the project's actual performance compared to its plan enables the project
team to identify trends in project performance. These analyses will be performed
regularly by Project Controls, and adverse trends will be reported immediately to the
appropriate level of management. Trend reports will also be included in the project
monthly report. They will identify potential deviations, quantify specific problem areas,
identify causes, make recommendations for appropriate corrective action, and provide
performance feedback to the project team. They will promote awareness of cost and
schedule control priorities.
Contract Cost Analyses
During project execution, cost control will be performed by monitoring commitments and
expenditures against the control budgets in terms of cost, and work hours. The common
coding structure facilitates the efficient and accurate matching of commitments and
expenditures and enhances the reporting and analysis capabilities of the team.
In the case of equipment items and material purchases, quotations will be reviewed to
ensure that quantities and unit prices are in line with the control estimate. As project
execution continues, performance will be monitored against plan in terms of work hour
expenditures and quantity requirements. Comparisons of commitments, expenditures
and quantity utilization to date in relation to achievements to date will provide a basis for
cost trending and prediction of costs to complete.

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Cost analyses will be included in the monthly report. As a minimum, this information will
include the following:

Original Contract Amount

Approved Change Orders (current month and cumulative)
Current Contract Amount
Commitments and payments to data
Pending changes

KBR will utilize the Integrated Project Management System(IPMS) will be initiated and
utilized for logistic, administrative, cost and schedule control. IPMS will be described in
late paragraphs.
Project Planning and Scheduling
KBR emphasizes the importance of thorough planning and scheduling in effective
project management, and these efforts will be high priority activities.
During the Work Plan development time frame, a Detailed FEED Schedule will be
developed for all efforts related to the Haradh and Khuff Project Proposals. It will be an
expansion of the Summary Level Schedule contained in this Proposal.
Complete schedule control will be established and maintained through a hierarchy of
schedule and control tools. The summary level schedules will be used to define the
overall time frames for the project activities and for summary level reporting. More
detailed schedules will be developed to provide day-to-day monitoring and reporting.
The activities, dates and durations in these schedules are coded so that they can be
viewed in required levels of detail or summarization.
The Master Project Schedule is a CPM Logic Network maintained on Primavera Project
Planner software. It provides the project with a working tool for developing schedule
dates, for identifying the critical path and problem areas and for predicting the overall
project completion date. It is an integrated activity network depicting the detailed work
plan of the project. An updated project schedule and a narrative analysis will be issued
monthly.
Schedule Baseline
Several schedule presentations will be produced from this critical path network during
the various phases of the project, depending upon the level of detail required for the
presentation. The project schedule baseline will be communicated to the project team,
and the project executed accordingly. This baseline provides the benchmark against
which all subsequent results are compared. The achievement of the baseline is a focus
of the project management team during the execution phase of the contract.
The project scope will be budgeted in terms of work hours, quantities, and dollars using
the WBS coding structure. Work hour budgets will be spread over durations defined by
the schedule milestones to generate planned progress curves. The planned progress
curves will become the performance baseline that will be used for performance
measurement.

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The CPM network will be used to time-phase all the resources of the project. Budgets
and progress for all phases can be summarized according to the common WBS coding
structure.
Performance Measurement
Engineering physical progress is deliverable based. It is measured at the work package
or item level by reporting actual dates for accomplishing milestone activities based on
the work designated in the schedule. The project efforts are weighted based on the
established work hour unit rates. Earned work hours are calculated on the basis of
established rules of credit for progress with the achievement of the milestones. As
activities are accomplished and statused, progress is calculated according to that
milestones earned value. The comparison of these earned hours to the actual hours
expended to achieve the milestones produces an indicator of project efficiency. These
performance measurements will be calculated on a regular basis.
Schedule Analysis
The scheduler will perform an analysis of planned physical progress versus actual
progress, and areas of concern will be highlighted. The schedule analysis will include
critical path analysis, project milestone analysis, and expended man-hour analysis.
Data from the detailed network for engineering, procurement, and construction are
rolled up to the appropriate level of detail for review throughout the project. The results
of these reviews provide a measure of project progress for management review, and
this progress is analyzed and communicated to the project team. Recovery plans are
developed, where indicated to minimize any adverse impact on the project schedule.
The recovery plan process will be a total project team effort
The project schedule will be statused on a weekly basis. The extensive schedule
analysis will be conducted monthly and reported as a part of the projects monthly
report.
Progress Calculation and Reporting
KBR will calculate progress on the basis of deliverable milestones achieved compared
to the budget for which the progress calculation is being done. Engineering progress is
normally a work hour based calculation.
The project monthly report will capture the project status through the end of the prior
month. This report will be produced in an agreed upon format, which describes
progress and status for the period and to-date. In addition, KBR will hold monthly
meetings to discuss the monthly report, progress and problems. Standard Microsoft
Office product will be used for word processing, spreadsheet work, presentation
graphics, and the occasional data base system used in the production of project reports.
Estimating
At the appropriate time during the FEED phase of the project, a Project Estimator will be
assigned full time to produce the Expenditure Request (ER) Estimate, which is a
deliverable of this project phase. The Project Estimator will be assisted by the assets of
the companys Estimating Department. Vendor quoted major equipment prices and
bulk material takeoffs obtained or produced during FEED will form the basis for the

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labor and material costs for this defined estimate. Other quantification of work and
estimation of resources will be achieved by the use of in-house developed estimating
programs, which utilize KBRs extensive database of material, equipment and labor
information accumulated from past project experience. The ICARUS estimating
program is also available when warranted. A risk assessment of the equipment and
material quantities and costs, and labor work hours and cost will be included in the
estimate document when completed.
B.

Integrated Project Management System (IPMS)

Kellogg Brown & Root has a world class project management system which has been
used extensively to assist in managing and controlling projects. This Integrated Project
Management System (IPMS) was developed using a relational database software
system to integrate all of the project management functions required for engineering,
procurement, and construction. IPMS applications share a common database, which
significantly reduces redundant input and data storage. The relational database design
improves the accuracy, productivity and data flow of project information. By giving
management instant real time access to the most current data, IPMS ensures that
management is making its decisions with the most current information.
IPMS consists of a series of integrated application programs that are configured to meet
the demands of scheduling, cost, procurement, material control, document control, and
change control for projects of any size and scope.
It provides numerous built-in standard reports as well as custom reporting options. The
system allows for flexible coding. IPMS makes cross-references available on a variety
of fields, and it provides short-cut menus to improve productivity. IPMS can operate
with personal computers, terminals, and workstations, which provides for a balance
between function and cost.
IPMS provides the following benefits:

Multi-office execution

User defined levels of detail

Single integrated project database

Life cycle data management

Improved communication and coordination

Increased productivity (Single data entry)

Improved data flow (real time updates)

Consistent, up-to-date project data

Powerful data retrieval

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