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Frequently Asked Questions

PROCUREMENT

Is the Procurement effort on a project as important as the Engineering and Construction efforts?

Yes, under estimating or overlooking the importance of the Procurement will result on constructions delays and budget overruns.

The Process Equipment represents about 40% of the overall project budget, and normally is the largest component of the investment.

How does the Procurement effort impact the Project Schedule?

The design effort depends on the timely receipt of process equipment drawings from the vendor, to be able to produce the design documents. Typically, equipment drawings are provided 2 to 6 weeks after the order to purchase the equipment is placed, so the sooner the order is issued, the sooner the equipment drawings will be available, and the sooner the construction will receive the construction documents.

Is the Procurement effort complete once an order to purchase the equipment is issued?

No, there is a lot of coordinating and expediting work to be done, to assure that the equipment meets the specifications and the project’s needs, such as design changes, fabrication schedule, material of construction changes, means of transportation to the site, etc. to get the equipment installed on time.

How does AMG, Inc. assist its client with the Procurement efforts?

In general by doing the overall project planning. AMG, Inc. identifies Procurement priorities by matching the equipment procurement schedule, with the project’s overall schedule.

For client’s that perform their own Procurement, AMG, Inc. becomes the link between the purchasing team and the engineering team.

For clients that are not experienced on equipment procurement, AMG, Inc. could become their Procurement Agent, performing all the procurement efforts.

How could AMG, Inc. impact on the prices for Process Equipment?

AMG, Inc. has been working with equipment vendors for over 30 years, and the vendors understand that our type of design does not overwhelm the vendor with paper work, so they adjust their price accordingly. Our constant work on the procurement for multiple projects, allows us to identify which vendor is in the best position to provide better prices, and better delivery.

How could AMG, Inc. minimize the client’s potential risk on the Procurement effort?

The Procurement effort for a large project involves hundreds of pieces of equipment.

Most of the pieces of equipment are small and can be ordered by the issuance of a P.O. (Purchase Order), which normally includes the commercial terms that the vendor must abide by if they want to accept the order.

There are some large pieces of equipment or systems that require a Contract in addition to the P.O. to minimize the risk. Large pieces of equipment or systems are procured similarly to the small pieces, but typically they are subject to process guarantees that are vey specifically described in the Contract. Other risk factors, such as the time of delivery are reduced by Penalty Clauses to incentivize the vendor to deliver on time.

AMG General

What differentiates AMG from other engineering firms?

What differentiates AMG is our real world experience and common sense approach to our business. Our experienced team includes our management team, senior engineers and Project Managers, who have years worth of field experience. Also, we have very diverse design and engineering teams.

In general terms, what is the background of AMG’s management team ?

The AMG management team consists of engineers with professional engineering degrees as well as a few business degrees here and there. All of our individuals have spent time working in facilities doing design work and solving problems with clients. The in-plant problem-solving is indispensable on a day-to-day basis when referring to the management of the company because we collectively understand the types of problems clients have, what answers they expect, the cost implications of designs and execution and the constructibility of our designs.

In general terms, what is the background of AMG ‘s project management team ?

Our Project Management Team consists of individuals with various degrees and an incredible amount of hours in the field utilizing hands-on problem solving skills.

On larger projects, how does AMG make up for its lack of size as compared to competing firms ?

Our experience working within our client’s facilities and helping them to solve everyday problems has given us a unique ability to arrive at the right answer in a short amount of time.

Project Management

What is the role of an AMG project manager on a typical, medium sized project, say $50MM Cap ?

The primary goal of an AMG Project Manager is to protect the client’s and AMG’s interests by controlling the project schedule and budget by making the proper decisions and maintaining clear communications.

What are some of the Project Management tools that AMG utilizes to maintain cost, schedule, and quality control ?

The tools that an AMG Project Manager use throughout the process include scheduling, cost & progress tracking, earned value and document management tools.

Describe the typical critical path of decisions/milestones that drive the schedule of a construction project.

The items that drive the schedule of a construction project include:

•  Mass and Energy balance
•  Intelligent P&IDs
•  Environmental permitting
•  Equipment procurement
•  Mechanical layouts
•  Structural steel engineering
•  Steel procurement, steel delivery
•  piping pre-fab & install
•  Electrical and instrument install.

How does AMG decide where to focus its engineering efforts on a typical project to meet overall project schedule deadlines ?

On all projects, whether AMG is involved in Construction Management or not, the engineering schedule must be driven by the anticipated construction schedule.

Construction Management

From AMG’s perspective, what is the most important consideration in maintaining schedule and cost control on a construction project ?

Organizing the construction procurement plan to match the anticipated availability of engineering construction documentation. For example, if 50% of the equipment will be procured immediately, and the balance in 6 weeks, the steel, foundations, and piping drawings will be available for the first half of equipment before the second half. It makes sense to break the bid packages and construction packages into two groups to allow progress to be made on the first half while design is being completed on the second half.

How is the critical path determined for a construction project ?

There are three main factors aside from nature that influence the critical path of a typical industrial process construction project: Process Decisions (P&IDs), Procurement & Delivery, and Construction Sequence. Structural steel takes 10 to 14 weeks to deliver once IFC drawings are released, so it always falls on the critical path, so any equipment that is steel supported must be procured in a timely manner, and the P&IDs that represent that equipment must be prioritized, along with the corresponding mass balances. If any of the structure s require deep foundations, that is also a major consideration. Field Erected Tanks can often fall on the critical path as well, depending on the complexity of the piping, electrical, and instrumentation that follows the tank completion

Capital Cost Estimating

What are the different levels of accuracy of AMG’s capital Estimates, and what constitutes their accuracy ?

Class 30 (+/- 30%) - Factored based on estimated equipment or sq ft costs
Class 20 (+/-20%) - Partial detailed take-off, partial factors
Class 10 (+/-10%) - Detailed Take-offs, including fresh equipment quotations

What are the most important aspects of assembling an accurate capital estimate?

Realizing where the money is and focusing on the money. Equipment is typically 40% of an industrial process project cost, structures and foundations are typically in the 15% range, painting is usually less than 2%. It does not make sense to do a detailed take off on painting if the equipment decisions are not finalized and budgetary quotes are not available.

What is the single most important component of a typical, industrial process capital estimate?

Equipment, first of all because of its purchase cost, and secondly, because for every piece of equipment, there is some form of support, either concrete of steel, usually piping or sheet metal to connect the equipment to the process. Also, some type of power source to make it work, and some type of instrumentation and controls to know and control what it is doing

Describe a class 10 estimate, and the corresponding level of detail ?

On a class 10 estimate, none of the estimate is factored, it's all a detailed take-off. Footage of piping, horsepower, feet of cable, cable tray, yards of content, tons of structural steel…it's a detailed take-off. Typically used to establish the detailed project scope to set the basis for the project so you know how much pipe you're using, what equipment you're using, etc. A lot of times, you need to have P & IDs developed, layout established, mass energy balance, instrument list, etc. There is quite a bit of information and effort involved in getting to this level of detail for a Class 10 estimate.

How long does it take to prepare a capital cost estimate?

This depends on the project size. A $50 million project takes longer to estimate than a $5 million project. If the project scope is well established, and supporting documentation is available such as P&IDs, site plans, and equipment specifications, a Class 10 estimate for as $10 million project can be completed in about 4 weeks. If the supporting information is not available, more time will be required to define and document the project scope and establish the “basis” of the estimate.

How much does it cost to prepare a capital cost estimate?

The cost is certainly affected by the project complexity, but a class 10 estimate for a $10 million project with supporting information available will cost in the range of $30. If the supporting information needs to be developed to support the estimate, the cost could be double.

Document Management

Explain in general terms what a document management system does and why it is important?

An enterprise document management system is important because there are thousands of files that exist on projects and it's essential to keep them in an orderly fashion as well as having them accessible to all the team members and the stakeholders that could be in different states and different continents. It is essential to keep electronic documents secure and accessible from wherever the team is in the world.

What are the key features of AMG’s document management software?

AMG's document management software contains a file server that is a repository for all client document. All documents are sorted into different, secure data sources by customer and plant location. Every time a file is requested from the Dayton repository, the integration server asks the side office server if it has the latest version of the file. If it doesn't, it will pull down and transfer the updated file from the repository to the local server. Therefore, clients have access to all their files, if they request access. In addition, if the client has consultants, contractors or other project stakeholders that they would like to give access to, AMG is able to grant that specific access to certain files.

Design Software

Describe AMG’s Key design software tools

AMG relies on state-of-the-art software for analysis of all structures. There are a variety of design software modules utilized but the majority of the time, AutoCAD-based Solids and Surfaces Modeling software is used. AMG has Microstation capabilities but the majority of time, AutoCAD is used. For the more complex solids and surfaces for 3D piping, cable trades, etc., AMG uses the Bentley AutoPlant Suite. This gives a database-driven, graphic interface to provide construction drawings and BIM information for the project.

How does AMG’s 3D design approach benefit the overall cost and schedule of a construction project?

AMG's 3D design approach benefits the overall cost and schedule of a construction project by using a single input, multiple output format so AMG is able to generate 3D drawings much more easily down the road. Also, the 3D design software has tools to do real-time interference checking. If there is something that comes up as a discrepancy between tolerances, the software will flag that so that AMG is able to address that before the structure is created.

Explain the cost of providing a 3D design project compared to conventional 2D design

Using 3D saves the client money because AMG's capabilities with 3D is vast and it would actually be more time-consuming and difficult to revert back to 2D than using 3D design tools. Today, the software and hardware work together in conjunction to make it much easier, much more efficient and much more user friendly to use 3D.

Provide a brief description of the Intelligent P&ID system that AMG utilizes?

Since 1995, AMG has used the Bentley AutoPlant P & ID system because it is an ODBC compliant database with a graphic user front. All of the process data, line sizes, equipment data, instrumentation, etc. gets stored in the database. This information can be used for numerous access reports or crystal reports that can be used by the client. The Intelligence system is a bi-directional link between the graphic information in the drawing and the backend ODBC compliant database.

Quality Assurance

Describe AMG’s philosophy regarding Quality Assurance

AMG's philosophy regarding quality assurance is based on the 5 fundamental QA steps:
•  Staffing (right people in the right position)
•  Concept Peer Reviews (group of peers review designs)
•  Mentoring (design questions that can be resolved ahead of time)
•  Document Checking (checking document quality from the beginning throughout)
•  Project audits (30%, 60%, 100% reviews)

MG believes in giving the client information when they request it. From a modeling standpoint, AMG saves the drawing, pulls the particular reports and sends it off to client at any point.

MG QA also focuses on decisions that are made BEFORE the construction drawings are made. Once drawings are made, that is too late.

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