OMV (Tunesien) Production GmbH

STOD PROJECT

PROJECT PLANNING, SCHEDULING AND CONTROL

PROCEDURE
(Work executed through EPC Contracts)

STOD-OTP-PMT-0808-PM-PRO-0002

Rev No Revision Originator Checked Approved

000 Issued for ITT

Date Date Date

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TABLE OF CONTENTS

1. SCOPE 3
2. DEFINITIONS AND ABBREVIATIONS 3
3. PREPARATION AND REVISION OF THE PROCEDURE 3
4. WORK BREAKDOWN STRUCTURE 4
6 EARLY ACTIVITIES SCHEDULE 4
7 LEVEL 1 PROJECT MANAGEMENT SCHEDULE 4
8 LEVEL 2 CONTRACT MASTER SCHEDULE 5
9 LEVEL 3 DETAILED ENGINEERING, PROCUREMENT AND CONSTRUCTION CPM
NETWORK 5
10 LEVEL 4 CONTROL TOOLS 9
11 PROGRESS MEASUREMENT 9
12 SYSTEMS 10
13 RESPONSIBILITIES AND ORGANIZATION 10
14 PROJECT CONTROL TOOLS 11
14.1 SCHEDULING SOFTWARE 11
14.2 ENGINEERING DELIVERABLES CONTROL SYSTEM 11
14.3 PROJECT MATERIAL MANAGEMENT SYSTEM & REPORTING 11
14.4 PRODUCTIVITY ANALYSIS 11

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1. SCOPE

The scope of this procedure is to establish guidelines and parameters for the
CONTRACTOR to develop a complete Planning, Scheduling and Control System which will
cover every aspect of the scope of work assigned under EPC contracts for the STOD
Project and which will grant to COMPANY full and easy access to data verification and
assessment.

2. DEFINITIONS AND ABBREVIATIONS

For the purposes of this procedure, the following definitions / abbreviations shall apply:

2.1 Abbreviations
PD = Project Director
PM = Project Manager
PCM = Project Control Manager
PEM = Project Engineering Manager
PPM = Project Procurement Manager
SM = Site Manager
CM = Construction Manager
CMM = Commissioning Manager
PL = Discipline Project Leader
PCP = Project Control Engineer Planning
PCS = Project Control Engineer Cost
PCR = Project Control Engineer Reporting
Planning Group = Engineering and Procurement Homogeneous Standard Cycle
PEP = Project Execution Plan

3. PREPARATION AND REVISION OF THE PROCEDURE

This procedure is issued and revised by the Project Services Team and approved by the
Project Manager.

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4. WORK BREAKDOWN STRUCTURE

In order to effectively plan and control the Project, the entire scope of work is to be subdivided
into manageable packages of homogeneous activities applying the Top Down Technique.

PLANNING HIERARCHY
LEVEL Definition
LEVEL 1 Project Management Schedule
LEVEL 2 Contract Master Schedule for the WORKS

LEVEL 3 Detail Engineering, Procurement and

Construction CPM Network
LEVEL 4 Control Schedules

6 EARLY ACTIVITIES SCHEDULE

CONTRACTOR shall prepare a 90 days Look Ahead Schedule to manage and control early
activities. Submission shall be within the agreed time frame specified in Appendix 1
Deliverables Time Frame.

7 LEVEL 1 PROJECT MANAGEMENT SCHEDULE

This schedule illustrates how the completion date of the work can be achieved and
contractual milestones met.
The main task of this level is to identify the main Project targets (e.g. Units, Phases etc.) in
accordance with the WBS and to establish the constraints for the lower level of Planning
and Control.
The outputs of Level 1 consist of the following documents:
Overall Project Time Schedule
Progress Curves for Engineering, Procurement, Construction, Commissioning and
Home Office Support Services phases
Man-hours/Manpower histograms for Engineering, Procurement, Construction,
Commissioning and Home Office Support Services

The Overall Project Time Schedule, issued in a bar-chart format, generally shows:
Duration of Engineering Phase (From 0% up to 90% complete)
Engineering Follow-up Phase.
Duration of Material Supply Cycle (from the issue of first purchase order up to 90%
materials delivery at Site)
Balance of material supply phase
Temporary Facilities installation (if any)
Duration of construction works from mobilization up to Mechanical Completion
(excluding Temporary Facilities)
Duration of Commissioning and Start-up (if applicable) phase
Duration of Home Office support services
Main Project Milestones

The control phase is managed through a bottom-up aggregation from Level 2.

Once established as a baseline, the Level 1 schedule shall not be changed without

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COMPANY approval.

8 LEVEL 2 CONTRACT MASTER SCHEDULE

This schedule is basically the one submitted during the proposal phase updated to reflect
all the changes agreed with COMPANY during the negotiation phase of the Agreement
including the actual Effective Date for the Project.

The Level 2 is an expansion of Level 1 Schedule to a level of detail necessary, within the
main elements of WBS, to highlight all major Project Milestones, and provide sufficient
information to define the implementation strategies to achieve Targets and identify the
constraints for the lower level of Planning and Control.
The Level 2 Planning foresees the following documents:
Project Time Schedule
Progress Curves for Engineering, Procurement, Construction,
Commissioning and Home Office Support Services for each Target;
Man-hours/Manpower histograms for Engineering, Procurement, Construction and
Home Office Support Services for each Project Target

The Project Time Schedule, issued in a bar-chart format, generally shows:

Duration of Engineering by Discipline (From 0% up to 90% complete)
Engineering follow-up for each Discipline.
Duration of Material Supply Cycle (from the issue of first purchase order up
To 90% materials delivered to Site) for each Discipline
Balance of material supply phase for each Discipline
Temporary Facilities installation (if any)
Duration of construction works from mobilization up to Mechanical Completion
(excluding Temporary Facilities) by Type of Works
Duration of Commissioning and Start-up (if any) phase
Duration of Home Office support services
Main Project Milestones

Level 2 Contract Master Schedule forms a part of the Contract Agreement.

The control phase is managed through a bottom-up aggregation from Level 3.
Once the baseline is established, the Level 2 schedule shall not be changed without
COMPANY approval.

9 LEVEL 3 DETAILED ENGINEERING, PROCUREMENT AND CONSTRUCTION

CPM NETWORK

The Level 3 Schedule is prepared as an integrated critical path network showing the major
activities and the interfaces between Engineering, Procurement Construction and
Commissioning phases.
It is organized in accordance with the agreed WBS by Discipline/Systems and shows
Planning Groups for both Home Office and Site activities, as appropriate and embraces the
total life and work scope of the Project to allow:
Identification of commissioning systems, construction works packages, their
sequence and timing for implementation in order to fix the targets for engineering
and procurement tasks

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Identification of interfaces and timing for engineering and procurement activities to

define the tasks of the various discipline and assign the responsibilities of the
intermediate targets of timing, cost and scope of work
Control the project through the work processes
Definition of constraints for the lower level of Planning and Control

The Level 3 Planning includes the following documents:

Project Time Schedule
Specification of the assumptions adopted for Project Time Schedule development,
consistent with the PEP (Basis of the Schedule)
Progress Curves by Discipline for Engineering phase, Material Commitment and
Material delivery at site, curves for Procurement phase, Construction curves by
Discipline for each Project Target
Man-hours/Manpower histograms by Discipline for Engineering, Procurement and
Construction phases and for each Project Target

The Project Time Schedule at Level 3, based on the established WBS and following the
execution strategy highlighted in the Project Execution Plan, shows:
Work processes by Discipline covering Engineering, Procurement Construction and
Commissioning phases
Third Parties Interfaces (inputs/outputs)

The Level 3 Project Schedule consists of a Logic Network analysed through Primavera
software and the outputs are presented in a bar-chart format highlighting duration,
criticality, floats and logic sequence of the involved activities.

The main purpose of the Basis of the Schedule is to record all the assumptions made
during the preparation of the schedule for a better understanding and knowledge of the
schedule itself.
In fact, the preparation of the Project Time Schedule is a complicate exercise that requires
a background preparation that has to be shared by all key project personnel.
In summary, it includes the following information:
Extent of basic/front end design and endorsement strategy for the existing
basic/FEED
Utilization degree of work performed during bidding phase
Start-up sequences and relevant duration
Definition of the Project Targets
List of pre-awarded Purchase orders
List of materials that will be purchased through blanket orders
List of critical items, as identified in the proposal schedule and confirmed by early
evaluation at project start-up.
Client approval cycles
Average time to place Purchase Orders for major equipment and materials
Average time of transportation (from final inspection to arrival at site)
Criteria adopted to establish Model review, HAZOP and MTOs
Procurement strategy for bulk materials
Split of Scope of Works between the involved Parties evidencing the relevant
responsibilities
Any other useful information to qualify the schedule

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The Level 3 Planning and Control represents the lowest level of breakdown where the
Project is seen as a whole. The further Levels are applied partially to a phase or a portion
of the Project itself.
The Project Time Schedule at Level 3, once approved by COMPANY, shall be saved as a
Target or Primary Baseline schedule, and unless a formal re-baseline or a formal change
request is approved by COMPANY, updated Level III integrated baseline can only be used
after full substantiation of CONTRACTOR to COMPANY and approval by COMPANY.

10 INTERFACE MILESTONE PLAN

The CONTRACTOR shall develop and maintain an Interface Milestone Plan detailing
essential interfaces supporting the logical network of the schedule related to the WORK
(e.g. other contractors, design, procurement, fabrication and construction) reflect the timing
of interfaces and allow resolution of any potential discrepancies. The CONTRACTOR shall
update the Interface Milestone Plan on monthly basis and issue the update to the
COMPANY along with the Schedule.

11 OTHER SCHEDULES

The COMPANY may require the CONTRACTOR to develop detailed

Schedules/Programmes for any specific Area/Discipline/Activity, as and when essential at
any stage of the project, for effective monitoring. This would also include the requirement of
separate detailed programmes for shutdowns/tie-ins, installation of package equipment etc.

CONTRACTOR shall also submit detailed programmes for construction of temporary

facilities and for mobilization & demobilization of construction equipment/manpower for
review/approval by COMPANY.

CONTRACTOR shall provide, in native file format, Construction Quantity Take Off's as the
basis for planned work.

12 PUNCHLISTING, SYSTEMS COMPLETIONS, HANDOVER AND SYSTEM

DOSSIERS

The CONTRACTOR shall establish and implement a systems completion method and
process that will provide actual status and control over the technical and administrative
completion of the PERMANENT WORK in sufficient granularity.

The CONTRACTOR will provide reports showing the status of the discipline walkthrough,
punchlisting, handover of facilities, systems and subsystems and all documentation needed
to support the completion of the PERMANENT WORK.

13 CHANGES, REVISION OF PLANNING AND SCHEDULING DOCUMENTS

The CONTRACTOR shall, after the approval of the COMPANY of the proposed changes
and amendments, reflect and describe the impact of all changes and amendments in the
planning and scheduling documents.

In case of any event or trend having impact on the overall project completion schedule, the
CONTRACTOR shall submit along with each trend, a detailed evaluation of the schedule
impact if any, due to change in scope/sequence of work etc. Justification for schedule
impact should be accompanied by a logic network, clearly highlighting the impact of such

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changes on the completion of intermediate milestones as well as on the overall project

completion.

The CONTRACTOR shall note that the submission of Revised Schedules/ Recovery
Schedules by the CONTRACTOR and subsequent approval of the same by COMPANY
during the period of project implementation shall not relieve the CONTRACTOR from its
obligations under the CONTRACT. All such revisions shall only be treated as a part of the
control mechanism for effective monitoring, so as to arrest/minimize progress slippages
during the period of implementation.

14 SCHEDULES REQUIREMENTS

CONTRACTOR shall as a minimum adhere to the following requirements while developing

and maintaining schedules at their subsequent level and enable aggregation of Level IV / V
to Level I while maintaining the integrity of the schedules:
i. The Level 3 Project Schedule shall be resourced loaded at the activity level and will
reflect the essential resources needed in sufficient granularity to prove robustness of
the schedule e.g. Engineering discipline hours, construction discipline hours,
commissioning support (vendors, specialist) and construction like cranes / ships /
trucks, etc prior to submission to COMPANY for review/approval. In addition, estimated
quantities shall also be assigned to all construction activities in the schedule.
ii. To enable and facilitate schedule evaluation, periodical updating, aggregation to higher
level schedules and to meet the various progress reporting requirements each activity
in the Levels 2 / 3 / 4 will be consistently assigned with the following information:
a. Activity ID Coding
b. Activity coding as per PROJECT WBS and Project Coding (viz. Area / Phase /
System / Discipline / responsibility etc).
c. Activity descriptions for different types of will be unique, explicit and provide
sufficient granularity to be self-explanatory.
d. Linkage of activity codes with the following Project Control Registers (Planning
Registers):
e. Engineering Document Deliverable Register (EDDR)
f. Subcontracting Services Register (SSR)
g. Manufacturing & Delivery Register (MDR)
h. Activity Duration, Remaining Activity Duration, Early start, early finish, (e.g.
Actual Start / Actual Finish), Total float, % Schedule Progress, % Physical
Progress
i. Time scale in alignment with update frequency e.g Weekly, Monthly
iii. The Level 3 Project Schedule shall be Construction and Commissioning driven and
shall include all linkages between these two distinct work phases to support overall
integrated schedule with sufficient granularity to support critical path analysis
iv. Calendars shall consider low productivitiy periods (i.e. Ramadan. Christmas, etc.) and
holidays
v. Detailed FAT (Factory Acceptance Test) plan shall be included in the Level 3 Project
Schedule.
vi. Requirement of shutdowns if any, along with duration of each shutdown for completion
of various modifications, tie-ins etc. shall also be reflected in the schedules.

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vii. Mandatory and Expected Finish constraints are not allowed in the schedule.
viii. Open ends in the logic network, out of sequence, redundant logic, negative floats and
extensive lags are not allowed and need to be resolved before submission.
ix. The use of extensive activity durations must be limited e.g. engineering activities not
longer than 30 days, construction activities not longer than 60 days and commissioning
activities not longer 30 days.
x. Primavera scheduling settings will be agreed upfront with COMPANY but otherwise
should be based on retained Logic and delinked Physical and Schedule progress.
xi. Each month the updated Level III Integrated Plan shall be submitted to the COMPANY
electronically in native Primavera P6 format. Any problems with the schedule will be
discussed between the COMPANY and CONTRACTOR before amendment of the
schedule by the CONTRACTOR.
xii. Changes such as new, deleted or changed logic links, new or deleted activities,
modified descriptions, changed activity durations and assigned resource changes will
be documented and transmitted to the COMPANY along with the updated Baseline
Schedule.

15 LEVEL 4 CONTROL TOOLS

Detailed Control schedules are generated for tracking and controlling the Project
Deliverables.
They are generated to cover:
Design/Engineering Deliverables
Procurement Sub-contracting Deliverables
Construction and Pre-commissioning
Commissioning
Any other specific items requested by the Project
The relevant activities are planned and controlled within the timeframe allowed by Level 3
Schedules.

16 PROGRESS MEASUREMENT

The progress measurement system is based on the following criteria:

Engineering progress is measured and aggregated from individual deliverables/actions
defined in the Level 4 schedules using the planned dates contained in the Level 3 schedule.
Progress is measured as an assessment of the percentage completion against series of
production steps for deliverables/actions from start to completion. Aggregation of assigned
weightings (based on std man-hours) enables the calculation of percentage progress and
earned man-hours to the summary levels of WBS and OBS established for the project.
Procurement progress is measured for equipment and direct materials. Each activity
of the procurement chain (Issue of enquiry, P.O./Commitment, final inspection, FOB
delivery, Site delivery) represents a point associated to a pre-defined progress value.
The weighting of equipment and materials is determined according to their value.
The percentage completion against the pre-defined points combined to the weighting
enables the calculation of percentage progress to the summary levels of WBS and
OBS established for the project.
Construction, Erection, Pre-commissioning and Commissioning weightings among all the
construction and erection activities are determined on estimated man-hours calculated on
the basis of expected quantities to be installed and productivity. They are based on
Contractor standard man-hours per unit for similar projects, as well as country
productivities, estimated s/contractor man-hours (obtained and verified, during selection
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phase), and on effective field productivities and trends control. Man-hours in reference are
direct labour man-hours for the construction s/contracted works.
The assessment of the achieved progress at the end of the reporting period is based on the
ratio of the quantity completed vs. total quantity. Aggregation of assigned weightings
(based on man-hours) enables the calculation of percentage progress and earned man-
hours to the summary levels of WBS and OBS established for the project.
The progress measurement system is detailed in the procedure STOD-OTP-PMT-0808-
PM-PRO-0001.

17 SYSTEMS

The early identification of the systems, both on P&IDs and plot plans, and their allocation
to a block diagram of the start-up logic sequence, allow the so called construction and
start-up oriented criteria for WBS and Network Analysis implementation.
At a mutually agreed stage of the Construction Schedule, CONTRACTOR shall transition
from geographical erection to a SYSTEMS approach. Suitable tools to plan and control the
transition shall be in place prior to the move to SYSTEMS. The SYSTEM Completion
Schedule shall be issued for review and approval by COMPANY.

18 RESPONSIBILITIES AND ORGANIZATION

Project Services Organization Chart shall be set up prior to the start of Engineering Works.
While the Project Director, or equivalent figure, has the ultimate responsibility for all the
Project planning, scheduling and control through the assigned Project Managers and
Project Control Manager, the Lead Planning and Scheduling Engineer is responsible for
developing, maintain and control schedules at the different levels in accordance with the
Project requirements and targets by applying the relevant procedures.
Each Project Manager, Discipline Team Leader, the Engineering Manager, the
Procurement Manager, Construction Manager and Commissioning Manager are
responsible for providing accurate and timely data as input to the schedules at all levels.
They are responsible for ensuring that the work of their groups are properly co-ordinated
and meet the requirement of the overall schedule through all phases of the execution of the
project.

The Project Control Manager, supported by the Project Control team, is responsible for
developing and coordinating the Project Control activities for the assigned Project.
In particular:

He collaborates with PM to the definition of the Project Execution Plan of the Project
and ensure its application through the entire project life to achieve the Project
Targets
He coordinates the project WBS set-up involving PM, PEM, SM, CMM, and PLs and
issues the relevant formalization document
He prepares, issue(s) and maintains the Project Control Procedures
He is responsible to coordinate, with the involvement of the key project personnel,
the preparation of Project Schedules at the different level of details, in accordance
with the project procedures
He coordinates the timely preparation and issue of project Baselines
He coordinates the timely activation of Level 4 Engineering
He coordinates the timely activation of Level 4 Procurement Schedule

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He ensures the overall Project Control among the operational centres (other
companies of the group, subcontractors, partners, site) involved in the project
control activities of the project
He participates in managing the scope changes, as per Project/Corporate procedure
He coordinates project review meetings and to follow-up the execution of the
remedial action, if applicable
He coordinates and assures project control reporting
He ensures the Project Control activities as per corporate standard
He coordinates the risk analysis evaluation and follow-up the risks management

19 PROJECT CONTROL TOOLS

14.1 Scheduling Software

CONTRACTOR shall guide and control the progression of activities in the work utilizing
industry proven computerized scheduling software. COMPANY recognizes Primavera P6
as the preferred tool for Planning & Scheduling.
MS Project may be used for summary or early phase planning but the use of any other
scheduling software may only be used upon APPROVAL by COMPANY.
Contractor shall also implement a computerized integrated Project Control System

14.2 Engineering Deliverables Control System

The system shall be developed interfacing CONTRACTORs Document Management
System with Engineering Progress Measurement System.

14.3 Project Material Management System & Reporting

The system shall be developed in order to allow the users to track the whole material
procurement cycle from the definition of the material requisition list up to the arrival at site
of the materials.

14.4 Productivity Analysis

CONTRACTOR shall maintain accurate records of all expended man-hours which shall
include,but not be limited to:

Name, date, trade or position, location, CONTRACTOR/Subcontractors

identification, direct expended man-hours and planning activity reference number

CONTRACTORs system shall be capable of aggregating the above information and

planning coding as required for analisys and reporting purposes.
CONTRACTOR is to reflect results from productivity analysis into the regular update of
schedules. The impact of inefficiencies/ loss of productivity to be taken into consideration
while estimating manpower needed be deployed to complete the remaining WORK.
Productivity analysis shall be carried out weekly and monthly by CONTRACTOR and
tabular reports and curves, which show trends over time, shall be provided in a format
acceptable to COMPANY. Productivity will be measured by an index using earned man-
hours divided by expended man-hours for the WORK accomplished to date, and shall be
tracked over time.

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