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Collaborative Contracting Approach Brings Cost and Schedule Efficiency

Collaborative Contracting Approach Brings Cost and Schedule Efficiency, Eric Naught

Advanced Work Packaging (AWP) provides the framework to help simplify and manage large capital projects in the construction industry. But it’s the early integration of construction with engineering and procurement resources that unlocks the real potential for how AWP can impact project efficiency and success.

Avoiding Slow Project Starts Creates Efficiencies

Often, large construction projects begin with the engineering and design of a facility, followed by issuing construction scopes of work to be built by either direct-hire or subcontracted resources. While generally an adopted practice in direct-hire construction, it is important to understand that the AWP process can and should be utilized when subcontracting major scopes of work.

When a subcontracting approach is not coupled with a strong construction management (CM) team driving the AWP process to the engineering and procurement teams, disconnects exist in the level of engineering and procurement details released during the bid phase of the subcontract packages. Often, submitted estimates, proposals and schedules require redevelopment once a subcontractor is awarded a scope of work and the subcontractor execution team is onboarded for the project.

It is vital that the CM team on a project develops the framework of the overall engineer-procure-construct (EPC) execution plan and prioritization of the deliverables. This will feed and integrate the construction subcontractors into the AWP process during the bid, onboarding and execution phases of the subcontracted scopes of work.

If the CM team hasn’t been integrated from the early stages of design — and the AWP plan hasn’t been developed and communicated effectively to the subcontractors — the subcontractors can often get a slow start on projects. This causes a lag between subcontract award and true production activities and creates potentially unnecessary change order exposure with the subcontractor. These inefficiencies become apparent from the start.

Whether the EPC delivery is using a subcontracted or a direct-hire execution strategy, it’s vital that CM is engaged and driving the AWP program throughout the entire design phase. The AWP process allows field teams to engage earlier in the process, gain insight for improved planning outcomes, develop more accurate schedules and achieve better integration through direct sharing from the planning and design phases of the project.

A systematic, real-time AWP process unlocks key advantages and improved efficiencies for large, complex projects by:

  • Engineering Out Hazards
    As part of an effective AWP planning process, potential hazards are identified early on so procedures can address safety requirements and concerns and teams can be prepared before construction activities begin. By including the construction team in the process, safety can be discussed at the outset and greater insight is gained.

    For example, opening discussion on specifically how and when a structure will be erected or piping installed in a construction area during the planning phase brings safety to the forefront of the operations. Planning sessions outline what the construction operation entails, including what tools, equipment, access and materials are required; who will be involved; and any potential impacts on other project operations occurring at the same time in the schedule. A discussion among members of the complete team adds value to the AWP process, and risk is managed upfront — directly in the plan — so as to not place undue burden at the craft supervision level to react much later in the process without visibility into the whole picture.
  • Mastering Schedule Insight
    Truly integrating the construction team into complex projects enables everyone to see and understand the project vision.

    By allowing access to 3D models and the resulting, more granular AWP components and packages, contractors have access to a wealth of information of what will be installed, where it will go and how it fits, and will fit, in the schedule. Likewise, attending weekly updates from equipment manufacturers gives firsthand insight into the latest delivery dates for better planning and scheduling.

    Sharing AWP metadata of designs, drawings and fabrication requirements provides improved clarity and, ultimately, efficiency for workers to understand installation requirements and assignments.
  • Integrating Field Knowledge
    Early engagement by the construction team allows projects to tap into extensive field knowledge from the outset for better ideas and to avert unnecessary implementation challenges.

    For example, the efficient design and installation of off-module piping in oil and gas projects is essential to avoid adversely affecting electrician and insulator schedules, as well as commissioning and startup work that occurs after installation. Engaging first with construction teams — and taking a deep dive into piping on these projects — helps identify the right routing structure and field weld placements. These details are then broken down into smaller work areas in the AWP process for all teams to understand and implement. Exploring the planning effort upfront in all construction areas increases efficiency for a project overall.
  • Fostering Efficient Material Purchasing
    Construction teams that are included in planning from the outset of a project can monitor material purchasing and manage their inventory. Plus, with direct knowledge of material schedules and upcoming installation work packets using the AWP process, teams can organize work assignments while waiting for deliveries or be ready when equipment is received.

Integrating construction at the onset of large projects creates a collaborative environment, open sharing of all project information and an even more effective AWP process. This results in more certainty regarding project cost, schedule and completion.

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Eric Naught
Written by Eric Naught
Eric Naught is a construction project manager with experience in managing large-scale industrial construction projects in the chemicals, oil and gas markets. His extensive knowledge of operational management, contract administration, value engineering, and EPC construction contracts allows him to encourage successful outcomes for his clients.

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