Management
focused on project plans, can be
Preliminary
and Final Engineering
Scopes
of Work
Glen Rosentrater,
Project Management
Professional
Use this project template to address
large capital projects in the CPI.
I n the chemical process industries (CPI), the vast majori-
ty of engineering involved in capital projects is out-
sourced. Few companies have the internal staff to design
for projects of any magnitude. Unfortunately, a design
firm is usually brought on board when the scope is still unde-
fined, and several expensive gyrations are made before the
scope is confirmed. Then, when the scope is finalized, the de-
sign firm, who is usually working on a time-and-materials
(T&M) basis, and works without deadlines, makes many
mistakes that the company must pay for.
Construction eventually starts with the design firm sub-
mitting drawings, piecemeal, to the contractors. Unfortunate-
ly, the order of the completed drawings is usually not given
much thought. Often, no attempt is made to see all of the
drawings as a package. Consequently, construction extras are
generally significant. It’s almost a given that construction
contracts on large projects will have 30% or more in extras.
Clearly, this is unsatisfactory, and it’s also unnecessary. It’s
just a symptom of a lack of planning.
When it’s time to engineer, a scope of work must be writ-
ten that will allow your company to obtain fair prices and that
also clearly states what work must be done. The scope of
work must be comprehensive enough to cover the entire job
and detailed enough to allow the design firm to understand
what it must do. The scope of work must go even further than
this though. A plant buy-in must be obtained for what you’re
asking the design firm to do (CEP, Nov. 2001, pp. 66–72).
I recommend issuing two design contracts (hopefully to
the same design firm)— one for preliminary engineering and
the other for detailed design/build. During the preliminary-
engineering phase, equipment should be specified and or-
dered. This will expedite the overall schedule.
Part of both contracts should be a cost estimate for project
completion. As each stage of engineering is completed, the ac-
74 www.cepmagazine.org December 2001 CEP
Part 1 of this two-part article, which
found in the November issue of CEP
on pages 66–72.
curacy of the cost estimate increases greatly. There is always the
potential for the project to be killed at the end of preliminary or
final engineering. It’s also important to make the detailed-de-
sign/build firm responsible for solving the installation problems
at the site because on a large project, this is a full time job that
cannot be juggled effectively by the project manager.
In order to bid on the preliminary-engineering contract,
the project manager must form a project team and generate a
rough project scope. This is lifted out of the project plan and
used to bid on the preliminary engineering. The preliminary
engineering, which is a formalization of the rough project
scope, is then used to bid on the final engineering. The pro-
ject team’s rough scope simply isn’t detailed enough to ob-
tain good quotes for final engineering. If you try to do so, de-
sign firms will either bid high to cover the gray areas or bid
low and try to use the gray to obtain extras. In the detailed-
design/build scope of work, it’s important to insist that all
work be distributed across a handful of general contracts and
that you list the title of those contracts. Unless this is done,
the design firm will have a never-ending supply of minor
contracts to issue that will delay completion. If it’s firmly
stated that all contracts must be included in a set of general
contracts, and dates are given, the design firm will have to
complete the design on your schedule. There will be no wig-
gle room for playing with semantics.
Project template
To understand the importance of the scope of work, sev-
eral key areas must be identified. These are: general infor-
mation, the project schedule, the preliminary-design scope
of work details, and the detailed-design/build scope of
work bid package details. An example of a drying project
follows. This can be used with minor modifications to ad-
dress any large capital project in the CPI.
General 10.Equipment list 12:00 PM Wed. Mar. 21
The company intends to construct a new facility for sodi- 11. Line list 12:00 PM Wed. Mar. 21
um lauryl sulfate (SLS) drying, installing six new dryers with 12. Tie-in list 12:00 PM Wed. Mar. 21
all the necessary support equipment. A new process building 13. Valve list 12:00 PM Wed. Mar. 21
of approximately 20,000 ft2 must be installed with easy fu- 14. Material-and-energy 12:00 PM Wed. Mar. 21
ture expansion in mind. The company will accept bids and balance
award two contracts: 15. Utility requirements 12:00 PM Wed. Mar. 21
Preliminary engineering contract — The basic scope put 16. Process description 12:00 PM Wed. Mar. 21
together by the project team will be finalized under this 17. Operating instructions 12:00 PM Wed. Mar. 21
lump-sum contract. This contract will establish enough de- 18. Single-line diagram 12:00 PM Wed. Mar. 21
tail to allow effective bidding of the detailed-design/build 19. Motor listing 12:00 PM Wed. Mar. 21
contract through the preparation of a detailed-design/build 20. Work breakdown 12:00 PM Wed. Mar. 21
bid package. All new items shown on the process-and-in- structure
strumentation diagram (P&ID), except for manual valves, 21. Schedule 12:00 PM Wed. Mar. 21
will be purchased under the preliminary engineering con- 22. Detailed risk 12:00 PM Wed. Mar. 21
tract. Distributed-control-system (DCS) and motor-control- assessment & response development
center (MCC) equipment will also be purchased. The de- 23. Permitting report 12:00 PM Wed. Mar. 28
sign firm will be reimbursed after the equipment arrives at 24. Detailed-design/build 12:00 PM Wed. Mar. 28
the plant site. scope of work
Detailed-design/build contract — This contract will be 25. Total project-cost 12:00 PM Wed. Mar. 28
bid on using the results of the work obtained from the pre- estimate
liminary-engineering contract. Under the detailed-
design/build contract, the design firm will perform the de- The company will return all “for approval” documents
tailed design, write trade scopes of work, schedule pre-bid with comments eight working days after receiving them.
meetings, bid the work, let contracts, and supervise the The design firm will submit “final documents” on the fol-
work in the field. Any equipment items not purchased lowing dates.
under the preliminary-engineering contract will be pur- 26. P&ID 12:00 PM Wed. Apr. 4
chased here. All contractual obligations will be between 27. Hazop (to be held at the company) Fri. Apr. 6
the design/build firm and the contractors and vendors. 28. Hazop results incorporated in design Fri. Apr. 18
However, the design firm will be reimbursed for contractor 29. IO list 12:00 PM Wed. Apr. 18
and vendor materials that arrive at the plant site and for 30. Building & equipment 12:00 PM Wed. Apr. 18
completed construction. layout and elevation
The design/build firm will evaluate and award change or- 31. Building report 12:00 PM Wed. Apr. 18
ders that do not represent scope changes to solve installation 32. Equipment list 12:00 PM Wed. Apr. 18
problems at the plant site. These change orders must be antic- 33. Line list 12:00 PM Wed. Apr. 18
ipated, evaluated and awarded so as not to delay the schedule. 34. Tie-in list 12:00 PM Wed. Apr. 18
Actual design work will be lump sum. Field coordination, 35. Valve list 12:00 PM Wed. Apr. 18
however, will be T&M. 36. Material-and-energy 12:00 PM Wed. Apr. 18
balance
Schedule 37. Utility requirements 12:00 PM Wed. Apr. 18
1. Pre-bid meeting 9:30 AM Mon. Jan. 8 38. Process description 12:00 PM Wed. Apr. 18
2. Quote due 12:00 PM Mon. Jan. 29 39. Operating instructions 12:00 PM Wed. Apr. 18
3. Critical-path schedule 12:00 PM Mon. Jan. 29 40. Single-line diagram 12:00 PM Wed. Apr. 18
of at least 40 items 41. Motor listing 12:00 PM Wed. Apr. 18
4. Purchase order awarded Mon. Feb. 19 42. Work breakdown 12:00 PM Wed. Apr. 18
5. Kick-off meeting at the companyWed. Feb. 21 structure
43. Schedule 12:00 PM Wed. Apr. 18
The design firm will submit the following preliminary en- 44. Detailed risk 12:00 PM Wed. Apr. 18
gineering “for approval” documents. assessment & response development
6. P&ID 12:00 PM Wed. Mar. 14 45. Permitting report 12:00 PM Wed. Apr. 25
7. Instrumentation electrical 12:00 PM Wed. Mar. 14 46. Detailed-design/build 12:00 PM Wed. Apr. 25
inputs and outputs (IO) list scope of work
8. Equipment & building 12:00 PM Wed. Mar. 21 47. Total project-cost 12:00 PM Wed. Apr. 25
layout and elevation estimate
9. Building report 12:00 PM Wed. Mar. 21 48. All equipment purchased Wed. June 6

CEP December 2001 www.cepmagazine.org 75

Management
Preliminary design scope-of-work details
1. The following documents will be used as the basis for
the preliminary design:
• Scope statement (contains maintenance needs, production
needs, utility requirements, existing utility status, safety, envi-
ronmental, standards, startup, and other strategic information)
• Work breakdown structure
• P&ID (rough)
• Process description (rough)
• Layout (rough)
• Existing underground
• Site information
• Schedule
• Detailed risk assessment
• Solicitation plan
• Quality control plan
• Risk response development
• Open issues and pending decisions
The design firm will use this information and their own
expertise to create the required professional documents. Re-
sponsibility for obtaining any other necessary information is
left to the design firm. If more information is requested from
the company and can be found within the its internal docu-
ments, the company’s project manager will direct the design
firm as to where to find it. If the additional information can-
not be found internally, then it is the design firm’s responsi-
bility to obtain the information from other sources.
Part of the preliminary design duties is to create a scope of
work for the detailed-design/build contract. The firm that is
awarded the preliminary-design contract will be asked to bid
on the detailed-design/build contract assuming their perfor-
mance has been acceptable. The company will handle the
bidding process for the detailed-design/ build contract.
2. Once a week, the company’s project manager will visit
the design firm to review the work progress. These will not
be document reviews and will only take place when “for ap-
proval” documents are received. Instead, these will be
progress reviews where the status of each document is looked
at to gauge work output.
3. It is understood that the company will not be vigorously
checking the documents for inaccuracies. When “for ap-
proval” documents are received, they are expected to be free
from simple errors. If common errors exist on the documents,
such as lines disappearing from one drawing to the next,
equipment numbers for the same equipment changing from
drawing to drawing, equipment numbers from drawings not
matching those on the process description, the work will be
considered inferior.
4. When purchasing equipment, three quotes will be ob-
tained (where possible) for each piece of equipment using the
company’s solicitation plan to obtain applicable vendor names.
The quotes will be tabulated on a bid form, and attached to a
requisition for review by the company. This review will take
place at a regularly scheduled, weekly meeting at the company,
attended by the project manager, the process engineer, and per-
76 www.cepmagazine.org December 2001 CEP
sonnel from maintenance, automation, electrical and instru-
mentation (AE&I), and production departments. Approved
requisitions will be issued as purchase orders (POs) by the de-
sign firm. Three copies of approved POs and all supporting
documents must be supplied to the company.
5. The design firm will issue the POs and pay the invoices.
The company will reimburse the design firm after the equip-
ment has arrived onsite. The requisition must state the perti-
nent equipment numbers and that five sets of equipment man-
uals, spare part lists, and certified drawings be sent to the de-
sign firm for collation in five duplicate equipment manual
notebooks. These notebooks will be indexed according to
equipment number with an index and tabs.
6. The design firm, in the building report, will explore sev-
eral types of structure from a cost, integrity, and aesthetic
perspective. At the least, brick and cinder block, steel skele-
ton with panel skin, steel skeleton with precast skin, and self
supporting precast construction will be considered, with a
recommendation for one. This report will recommend surface
types for floors, ceilings, walls, platforms, and roofs. It will
discuss floor and roof drainage, and doors, and windows,
lighting, and heat, ventilation and air-conditioning (HVAC)
plan, etc. to give a complete picture of building construction.
7. The design firm in the permitting report will discuss all
permits required and how they are obtained.
8. One person from the design firm, typically its project
manager, will be the company’s main contact, who will an-
swer questions in a timely fashion and give updates on status.
9. The design house will contract all testing that needs to
be done for preliminary and final engineering.
10. Any additional requests must be brought to the atten-
tion of the company’s project manager before the work is
started. A lump-sum quote will be given, and when written
approval is received, the work will proceed.
11. All of the design firm’s employees working onsite
must attend the company’s safety seminar.
12. List all exceptions to this scope on a separate sheet of
paper in your quote.
Detailed-design/build scope-of-work bid
package details
1. The forementioned “final documents” along with any
testing results will constitute the detailed-design/build bid
package. Detailed-design and construction due dates are list-
ed in the schedule.
2. All trade work and equipment with single item or quan-
tity value of more than $15,000 will be bid. Once a particular
type of contract is awarded, pertinent additional work or
items will simply be added to that contract after fair pricing
has been established.
3. The company will reimburse the design/build firm for
materials stored on the plant site and for installation.
4. The following separate contracts will be let, or in other
words, all the work must be distributed across all of these
contracts. In its quote, the final design/build firm must list all
work that will fall into each category:
• Demolition
• Concrete foundation, underground piping, and electrical
• Structural steel
• Concrete floors and roof
• General building architectural (walls, siding, doors, win-
dows, roofing, fire protection, plumbing, etc)
• Mechanical (equipment setting, piping, HVAC and insu-
lation installation)
• Electrical and instrumentation
• Programming
5. All bid documents must be reviewed by the company’s
project manager before being submitted to contractors.
6. All trade scopes of work will take into account the com-
pany’s shutdowns, and trade interactions, and will supply an
order of construction linked to drawings by drawing num-
bers, detail numbers and tie-in points. Each trade scope of
work will request a computer-produced critical path schedule
of at least 40 items. Each schedule will use certain milestone
tasks that will be stated in the scope of work, which will link
that trade’s work to the project’s master schedule.
7. A list of required drawings will be generated for all
the trades (construction profession performed by union labor,
such as brick laying and steel working).
8. The original equipment list will be modified to include
equipment that has been specified as a result of detailed engi-
neering. The detailed-design/build firm will purchase this and
update the five equipment manuals.
9. At the end of construction, “as built” drawings will be
returned to the design firm for updating. Three hardcopies
of updated drawings will be provided, as will a CD-ROM,
and reproducibles.
10. All drawings (civil, mechanical, electrical, structural,
etc.) will be done in a common, three dimensional (3-D)
mode to check for interferences. In addition, a 3-D walk-
through of the project will be performed on a terminal for the
project team.
11. Tie-ins will be marked by the design firm in the field.
Note that this may entail the rental of a manlift.
12. For all the trades, the drawings supplied must be com-
plete and professional, suitable for bidding. Piping, conduit,
structural steel and routing must be clear. The statement
“field route” will not be allowed.
13. Each project should have its own pertinent list of ex-
isting company drawings. These drawings must be updated to
reflect the new work completed. Computer-aided design
(CAD) drawings must be updated using CAD software. Pen-
cil drawings, however, do not need to be converted to CAD
drawings and can be updated with pencil.
14. The design firm will supply the construction man-
agement team, which will hold pre-bid meetings (bidding
“solicitation plan” recommended contractors, or in other
words, receiving quotes from contractors the project team
has approved), with onsite planning, management and co-
ordination of all construction activities. A weekly contrac-
tor-coordination meeting will be held. A computer-generat-
ed progress report will be given to the company’s project
manager on a weekly basis. Contractor performance and
contract compliance will be monitored. The field-coordina-
tion team will call the detailed-design/build firm directly
for answers to questions if necessary. They will also docu-
ment arriving equipment, keeping a computer-generated re-
port up to date, daily.
15. All contracts, equipment and trade work, will be bid
on with clear specifications to make sure all are bidding on
the same or equivalent items. Unless unusual circum-
stances arise, contracts will be given to the low bidder.
16. A weekly meeting will be held with the detail/de-
sign-build firm to establish contract compliance and project
status. Change orders will be explained and substantiated.
Issues that have arisen will be discussed. The first and third
weeks of every month, a variety of formal project status
calculations (e.g., estimate at completion, cost variance and
schedule variance) will be submitted to the company. Esti-
mate-at-completion calculations will be computed for the
entire project and for each contract. Any contract anticipat-
ing a 20% or more increase in cost must be analyzed by the
design firm in a written report that will explain what hap-
pened and what can be done to reduce costs. At the very
least, a drawing review is expected from the design firm.
The design firm must put in place an action plan to resolve
any critical-path schedule delays.
17. Equipment contracts will have clearly defined deliv-
ery dates, which will be expedited every week by the de-
sign firm.
18. All designs must correspond to OSHA and all feder-
al and state regulations.
19. The design firm must perform a detailed cost-esti-
mate of the entire project within one week after the de-
tailed design is complete using Richardson’s or some other
well-known estimating method. The results must be sum-
marized in an easy to read format. The results must be cat-
egorized into material and labor. In addition, a single lump-
sum must be provided for the building, including all non-
process utilities associated with it.
20. All drawings must be stamped appropriately by pro-
fessional engineers, electrical by an electrical engineer,
structural by a structural engineer, etc.
21. An isometric drawing must be supplied for any pip-
ing, electrical, etc. that must be rerouted to accommodate
for new structures. CEP
GLEN ROSENTRATER is a senior project manager with over 14 years of
experience managing projects in the chemical processing and food
industries (E-mail: gutbar@aol.com). He obtained his BS and MS in
chemical engineering from the Univ. of Illinois at Chicago, and is a
project management professional (PMP). Rosentrater is a member of
AIChE and the Project Management Institute (PMI)
CEP December 2001 www.cepmagazine.org 77