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Role of Project Management Consultant
In today’s environment, the role of the Project Management Consultant (PMC) in project execution can be critical to project success and has become increasingly challenging. This article seeks to examine the latest trends in the role of the PMC in the industry, various PMC models, challenges faced by PMCs and considerations for a project to be successful. Partha Purkayastha, Managing Director, Foster Wheeler India Private Limited, writes.

The key role of the PMC is to provide resource and expertise unavailable to the client, to assist the client in project implementation. The role can include some or all of the following activities:
  • Supporting clients in the development of clearly defined business objectives/ drivers and targets for the project
  • Participating in techno/economic studies, market analysis, etc
  • Assisting clients with project financing
  • Supporting clients in securing the required permits
  • Provision of HSSE consultancy services
  • Pre-front-end engineering design (FEED) activities/conceptual studies,
  • Selection of process licensors and process integration
  • Value improvement services
  • Development of project technical standards, philosophies and procedures
  • FEED and engineering, procurement & construction (EPC) contracting strategy development
  • Early engineering (selected activities that are considered to bring benefits to the EPC project) in advance of the EPC final investment decision (FID)
  • Early procurement activities, including ordering of long lead equipment items, and placement of construction enabling or fabrication contracts to reduce or safeguard the EPC project schedule
  • Development of the FEED and EPC invitation(s) to bid (ITB)
  • Contractor prequalification as well as bidders lists
  • Responding to bidder clarifications
  • Evaluating contractors bids against pre-agreed criteria, and making recommendations to client
  • Satisfying client project assurance and gate review processes
  • Monitoring of FEED and EPC contractor(s) scope, schedule, cost, quality and safety performance
  • Interface management
  • Provision of inspection services
  • Provision of project control, schedule and risk management services
  • Provision of commissioning, operations, maintenance & training services
  • Engagement of specialist consultants
  • Reporting consolidated project status, cost and schedule forecast for Clients consideration
  • Review and recommendations in respect of contractor variations
  • Attendance of key reviews and review/ approval of key documents (technical governance)
  • Provision of site management services
  • Management of key interfaces on behalf of the client
  • Technology transfer & training of client project teams, where appropriate

In practice, the actual scope assigned to the PMC may take many forms depending on the complexity of the project and the client’s own in-house resource availability and preferences.

Furthermore, the PMC can be involved in self-performing larger elements/phases of the project which can complement the PMC role and bring synergies, for example:

  • FEED development. The PMC is then well placed to handle the follow-on EPC ITB, enquiry, evaluation, and contractor selection on behalf of the client, and act in a traditional PMC role for any subsequent EPC release
  • For major, complex projects, the PMC can also self-perform elements of the project. For example, FEED and/or EPC of the offsites & utilities (O&U) to ensure effective overall coordination and management of the O&U interfaces across the various project packages. The opportunities for this are many and varied.

The PMC Landscape
So what does the PMC landscape look like today? PMC-only companies are becoming rarer as projects become larger and more complex; and current knowledge of (and skills in) FEED and EPC execution become more important to clients and with it the ability to manage contractors. Clients often look to FEED and EPC contractors to take on the role of the PMC due to their proven ability to manage large scale and complex projects, coupled with the PMCs in-depth technical expertise and resource. In addition, client’s expectations of increased accountability, so far as the PMC is concerned, is taking on a whole new dimension, with the PMC sometimes being expected to take on unreasonable liabilities in respect of the performance of the execution contractors themselves. Consequently, the challenges faced by the PMC have increased significantly.

Key Challenges
Resourcing
  • Clients have reduced their engineering/ technical resources over the past 10 -15 years to the point, where some have difficulty fully resourcing client teams, and have to rely on PMCs as separate teams or to provide selected resource for integration in to their own teams
  • PMCs need to have access to suitably qualified and experienced personnel and have the human resource capacity to ensure rapid mobilisation to any location globally. The expectations of clients in this regard can be unreasonably high, but need to be pragmatic
  • Client requirements to operate as an integrated team whereby the client wishes to incorporate its own personnel into the PMC organisation, whilst the PMC retains overall responsibility for providing the service. Careful consideration needs to be given to the overall impact on the performance of the PMC team and associated liabilities, however selective integration should be seen in a positive light in terms of building a joint client/ PMC team with the associated increased credibility in the eyes of the contractor(s), and efficiency benefits
  • The global approach to project execution makes it difficult to identify the specific location(s) for the PMC, until the execution contractor(s) have been selected. This presents difficulties for the client and PMC teams in terms of preparation for mobilisation and demands great flexibility on behalf of the assigned personnel. Contingency planning is useful in this context to identify and address critical issues, such as visa and work permit requirements

Major/Complex project
  • The large scale and multiple unit/plant nature of some projects, coupled with the different phasing requirements, often requires the release of multiple FEED and EPC packages to several contractors or consortia. This in turn requires a coordinated PMC approach, consolidated reporting across the entire project and the need to manage complex interfaces between the different contractors
  • Multiple FEED and EPC contracts each with their respective services, materials and fabrication contracts generally requires the management of many different work fronts, in different world-wide locations, across different time zones and using different languages. This brings a level of logistical complexity that the client and PMC teams have had to respond to and requiring the development of multi centre execution plans and coordination/interface procedures with the IT systems and infrastructure to facilitate proper control and coordination Liabilities
  • A lack of clarity in the responsibilities and associated liabilities on the PMC relative to FEED, and especially EPC, contractors can lead to accountability issues with regards to schedule and total installed cost (TIC). The PMC can only use its best endeavours to get execution contractors to perform and whilst some clients try to extend FEED or EPC contractor liabilities to PMC, this is generally recognised as inappropriate
  • A lack of clarity with regard to PMC responsibilities and liabilities in respect of third parties, ie vendors and sub-contractors, relating to expediting of equipment supplies as well as verification and validation of third party documents, etc. These aspects need to be clearly defined in the separate client/PMC and client/ contractor contracts. There should be no overlap in terms of responsibilities and associated liabilities between the various contracting parties

Forms of contract
  • Depending on the region and business sector, contracting is moving towards a greater element of fixed pricing, in the form of lump sum services or G-Max. These types of contract can be very challenging for PMCs, since the schedule, among other things, is not under the direct control of the PMC. As a consequence the PMC contract is usually tied to the contractor(s) schedule and variations accepted in the PMC contract for any changes in duration
  • Clients could allocate more time to the consideration of non-compliant and/ or alternative bids where there is a clear benefit to the project and client. PMC recommendations in this regard can be over-ridden which can result in disqualification of the most suitable contractor for the project
  • Requirements for self-perform elements of work are increasingly becoming an essential feature of many PMC contracts, typically in the areas of residual engineering, process and systems integration, and managing interfaces.

All of the above challenges can be exacerbated where the PMC is acting for and on behalf of a client which is a joint venture or consortium, and where the constituent parties have very different expectations and experience in respect of the PMC role.

Considerations
Given the many challenges summarised above, there are a number of key considerations for clients to optimise the PMC role and make it more effective in terms of delivering benefit to the project and client. These include:
  • Endeavour to select the PMC in advance of the execution contractor not always possible)
  • Select a PMC model appropriate to the project, especially for major projects
  • Clearly define the role of the PMC
  • Agree liabilities appropriate to the role and authority of the PMC
  • Ensure that the authority bestowed upon the PMC by the client is clearly aligned with the responsibilities and liabilities the PMC is expecting.
  • Determine the most appropriate form of contract, and for which work scopes
  • Ensure clarity in role delineation between client (and within the client team, especially where the client is a joint venture or consortium), PMC, execution contractor(s) and other third parties
  • Ensure that all levels of the client organisation understand the role and authority of the PMC

In summary therefore, the client and the PMC must endeavour to work on an integrated basis, thus paving the way to drive the project in a collaborative manner to meet the client’s project objectives. This can mean members of the PMC being integrated in to the client team (or vice versa), or the distinct client and PMC teams working closely together.