Cost estimating for process analyzer projects

This article addresses cost estimating for capital projects on which an analyzer system is installed, through start-up and commissioning of the project, to the resultant lifetime cost savings that can be gained.

By Gary D. Nichols

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Analyzers are complex specialty devices that require attention to a broader range of details than conventional field instruments. Therefore, an accurate process analyzer system estimate requires attention to a sometimes-lengthy checklist of what is included and not included, in the scope. Common examples are specialty sampling devices, heat-traced sample and sample-return lines, utility services, specialty gases, added DCS or SIS I/O points, and ergonomic sample-point and analyzer locations. Many details relevant to Table 2 and Table 3 were discussed more extensively in the second article in this series.

Besides identifying these cost items, a thorough estimate also states which project partner is responsible for its completion. Either the engineering firm or the analyzer systems integrator might be responsible for the sampling device and the heat trace controller. The client/owner may want to be responsible for DCS programming because of the high safety and security nature of control system software, and the engineering firm or the general contractor can be responsible for the local electrical disconnect switch at the field device. Therefore, it’s important to identify early, and in the estimate, who’s responsible for individual line items, lest they get estimated twice or not estimated at all.

Complexity usually means higher cost, so an inaccurate estimate will have a high overall project impact. Complexity requires touching and being touched by other disciplines such as electrical, piping and civil engineering. Therefore, the estimating process must take into consideration the two-way impact of the analyzer system on other disciplines and the requirements of the other disciplines on the analyzer system costs. Lastly, additional costs for testing, inspection, and field assistance for analyzer systems, especially for those in analyzer houses, can cost as much as $1,000 per day per person assigned.

What can be done to ensure more accurate analyzer system project estimates earlier in the project lifecycle? Best practices include: 

  • Clearly defined scope of deliverables.
  • Clearly fixed and enforced lines of responsibility for  creating estimates for all parts of the project.
  • Plenty of front-end engineering and design (FEED) time and funding. If more is needed, be prepared to justify and argue forcibly for it if compromise would result in a poor estimate.
  • Clarity about specific parts of the project the project controls/estimating people are addressing.
  • Willingness to explain, compromise and push back where compromise isn’t acceptable.
  • Firm estimates on tagged/specially engineered items to be acquired specifically for the particular analytical application and project.
  • Clarity about what commodity items/bulk materials are required to complete installation and start-up of the specially engineered items.
  • Liberal, but cautious use of  walkthroughs, photos, drawings and other FEED documentation, especially when something “doesn’t look right.” Ask lots of questions.
  • Due diligence in pointing out poorly defined items or unfilled gaps at the time the estimate is delivered.

They must be pointed out, their potential impact explained, and alternatives that minimize negative impact addressed.

The reader is also encouraged to review the references in the sidebar “Extra-Credit Reading” for additional and supporting suggestions. Important related topics which must be left for another time include cost elements by project stage, estimate accuracy by project stage, sources of estimating information, types of costs by work breakdown structure, and types of construction contracts.

Extra-Credit Reading 

  • Khan, Asadullah, “Project Scope Management,” Cost Engineering, Vol. 48, No. 6, June ’06, pp. 12-16.
  • Ward, Stephen, “Concept Selection, Estimating and Project Economics,” PetroMin magazine, Dec. ’05, pp. 20-29.
  • Harrison, Malcolm, “How to Get What You Want from Your Engineering Contractor and Save Money Too,” presented at the 7th World Congress of Chemical Engineering, July ’05.
  • Kunesh, John G. and Raymond M. Sowiak, “Which is the Best Hardware Quote?” Chemical Processing, July ’05, pp. 23-26.
  • Kunesh, John G., and Raymond M. Sowiak, “Distill Your QuoteRequest,” Chemical Processing, June ’05, pp. 30ff.

 


  About the Author
Gary Nichols, PE, is principal control systems engineer with Jacobs Engineering Group. He can be reached at gary.nichols@jacobs.com.
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