Glossary

AFC approved for construction Bidding process events from a decision

AFD approved for design to contract for work through award
of the contract; includes preparation
Antitrust laws laws enacted to curb of the invitation to bid, selecting
noncompetitive behavior by private the bid list, sending out invitations
companies to bidders, bidders' preparation and
Area designated part of a facility, portion submittal of proposals, preparation of
of manufactured equipment, system, contract documents, evaluation of the
group of systems, purchase order, work bidders' proposals, negotiations with
package, or set of related tasks for the successful bidder, and signing of
which a project engineer is responsible; the contract; same process applies to
has specified boundaries and interfaces purchase orders; also known as tender-
with other parties ing process
Area engineering phase of project, detailed Bid package documentation sent out with
engineering when areas are engineered in the invitation to bid
sufficient detail for bidding and later for Buyer commercial person who prepares,
construction negotiates, and administers a purchase
As-built documentation final drawings, order for a client or contractor; works
documents, and data that reflect the closely with a package engineer
finally constructed project facility (or Change order variation to a contract or
sometimes manufactured item) purchase order that adjusts the scope of
Back-to-back contract subcontract that work, contract price, or other aspects of
transfers all the terms, conditions, the contract or purchase order
responsibilities, and risks of the main Clash interference of two design ele-
contractor to the subcontractor ments, e.g., a major pipe interferes with
B e n c h m a r k i n g comparison of a cost, a main structural member and must be
a schedule, or other project estimate rerouted
with actual, similar data from previous Client owner or operator of the project
projects or venture that is overall responsible
Bid-check estimate estimate for a spe- for specifying, managing, and procur-
cific contract or purchase order that is ing goods and services procured under a
prepared prior to receipt of the bids to contract or purchase order
judge the reasonableness of the quoted Commissioning also called systems
prices completion; phased completion, testing,

205
206 Glossary

and functioning of systems or subsys- Contractor firm, joint venture, or con-

tems prior to start-up and operations sortium that is contractually responsible
to provide goods and services
Confidence one of a project engineer's
most valuable assets Control cost estimate project cost estimate
that forms the baseline for controlling
Conflict ofinterest exists when an individual
project costs; developed early in detailed
has or appears to have a personal interest
engineering or prior to project approval;
that is contrary to his or her organization's
may be the basis for funding the project
interests
Control schedule project schedule that
Construction planning, fabrication en-
forms the baseline from which progress
gineering, procuring, prefabricating,
is measured; generally developed prior to
fabricating, erecting, assembling, trans-
project approval and contract awards or in
porting, and installing a project facility
the early stages of detailed engineering
Contingency additional cost added to an
Corrective action deficiency in a project
estimate to cover unknown risks
management system or procedure, usu-
Contract written agreement to provide ally found by a quality audit, that must
goods and services be corrected by the project management
Contractmlump sum contract in which Cost allowance cost added to an activity
the contractor bids a total fixed price for or overall estimate to cover known risks;
completing the work; generally paid at see also risk-weighted cost allowance
payment milestones spread throughout
Data registers on projects: large elec-
the duration of the contract
tronic databases that define equipment
Contractmreimbursable contract ha which to be bought, materials to be ordered,
the contractor is reimbursed for all actual mechanical completion status, commis-
costs and is paid a fee for the performance sioning status, and more
of the work
Design basis collection of information
Contract---schedule of rates contract in required to design a facility or other de-
which the contractor bids a list of rates sign object; can consist of environmental
for performing elements of the job (e.g., data, design criteria, functional require-
cost for installing and testing piping, cost ments, standards (design, safety, quality,
per fabricated ton of steel, cost for the regulatory), a conceptual design, and
length of a given type of welding); num- other types of information and data
ber of rates can vary widely depending Design change significant change to a
on the contract; also called a unit rate concept (during project planning) or
contract a change to the design (during project
Contracting agreeing on the provision of implementation); the project must man-
goods and services through a contrac- age change
tual arrangement E&P contractor firm, joint venture, or
Contracting strategy plan for divid- consortium that is contractually respon-
ing the project work into contracts; the sible to provide engineering and pro-
client's contracting strategy drives the curement services; also a contracting
contractors' contracting strategies; see strategy in which the client decides to
Figures 4.2, 4.3, 4.4 use an E&P contractor for closer control
Glossary 207

over engineering and procurement than personnel with engineering, safety, and
an EPC strategy would give operational knowledge and experience
El dinero Spanish for "the money" Hold points places in the manufacturing
Engineering and procurement inte- process where the customer requires the
grated project phase to design, specify, work to stop while some specific action
purchase, and contract for everything (like an inspection or test) is taken
necessary to execute and initially operate Holds areas on a drawing (usually sur-
a project rounded by a cloud) that are lacking
EPC engineering, procurement, and con- necessary information to carry out the
struction; generally refers to a contract work
or contracting strategy IDC interdisciplinary checks; design
EPCM engineering, procurement, and quality measure to check design out-
construction management; generally re- puts; assures that discipline engineers
fers to a contracting strategy that gives have an opportunity to check the impact
the client more control than an EPC of other engineers' design work on their
strategy over construction own

FEED front-end engineering design; part IFC issued for construction

of the definition phase of a project IFD issued for design
Function testing testing of a piece of
Inspection and test plans measurements,
equipment by running it
tests, inspections, and verifications
Functions of management task side: planned to manage the quality of con-
plan, organize, delegate, control, inte- structed and manufactured products
grate, measure, improve; people side:
Interfaces internal or external boundar-
motivate, build a team, develop peo-
ies with other parties at which informa-
ple, use cross-cultural communication
tion, designs, activities, and deliverables
skills
must be managed
Getting forward slang for ensuring that
ISO International Organization for Stan-
a deliverable is accomplished on time,
dardization
e.g., "responsible for getting forward
the process flow diagrams" JSA job safety analysis; formal or infor-
Hazard register or risk register list of mal assessment of risks and mitigation
project risks and hazards that results measures done by a work crew prior to
starting a task
from a HAZID, HAZOP, or other risk as-
sessments; risks are generally arranged Leadership activity of influencing people
from most severe at the top; sometimes to strive willingly for group objectives
called a risk register (Hersey and Blanchard, 1982)
HAZID organized group session to iden- Local content requirements by host
tify hazards and risks to a project countries on international projects that
HAZOP hazard and operability study certain amounts of the work be done in-
to improve the safety aspects of a de- country
sign; consists of a review, usually dur- Long-lead equipment equipment (or
ing detailed engineering, that involves materials) with a long delivery time; the
208 Glossary

project must order this equipment before Milestone project date specified in a
project approval in order to receive it contract at which certain deliverables
on time; generally requires a special are due or certain events shall happen
funding request
Model contract or PO template used by
Loop testing continuity testing of instru- contract (or PO) formulation teams to pro-
ment or electrical circuits to verify me- duce a specific contract (or PO) document;
chanical completion templates help ensure uniformity and
Management working with and through consistency while allowing for necessary
individuals and groups to accom- variations
plish organizational goals (Hersey and Nonconformance deficiency or deviation
Blanchard, 1982) from requirements (found by any means)
Management by Objectives (MBO) sys- in a product that must be corrected by
tem of management based on establish- the project management
ment of a cascading set of increasingly Organization chart see Figure 3.2
detailed objectives, which are mutually
agreed on between bosses and subordi- P&ID piping and instrumentation dia-
nates; focuses the work on overall organi- gram indicating the essential details of
zational goals; under the fight management a process or subprocess
style, all levels work in a serf-controlling Package engineer project engineer respon-
manner toward these aligned goals and ob- sible for an engineering work package, a
jectives, which should be achievable and purchase order to be delivered, or a portion
measurable, i.e., specific results delivered of a manufacturer's scope of supply
at an agreed time
Patrons management sponsors that can
Management of change (MOC), or change help accelerate an individual's career
management project control process to
ensure the orderly coordination, control, PEP (Project Execution Plan) compre-
approval, and implementation of project hensive implementation plan that covers
changes (including changes to the design) all aspects of the client's, contractor's,
vendor's, or other responsible party's
Manufacturing production of equip- work on a given project
ment and materials; consists of plan-
ning, engineering, procuring, develop- Personal effectiveness how well an in-
ing, producing, testing, and delivery to dividual performs his or her job; see
the customer Chapter 6

Materials purchased items such as wire, Power potential for influence (Hersey
pipe, steel, and more and Blanchard, 1982)

Mechanical completion documented con- Present value profit value of a future net
stmction status for an area or system that cash flow stream discounted back to its
indicates that it is completely built, hooked present total value; the annual rate used to
up, and tested so that it is safe to be com- discount each year's cash flow back to the
missioned or operated on a trial basis. present is usually a fixed percentage such
as 10% or 15%; PV10 would be the net
Mega-project project that is extremely
profit discounted back at 10%
large with a total installed cost of
approximately $1 billion U.S. or more Procurement purchasing and contracting
Glossary 209

Projectmnew project engineer's view Qualitative risk assessment risk asses-

torrent of activity, rushing along, sweep- sment based on the experience and
ing away everything in its path judgment of project personnel to deter-
Project--project manager's view struc- mine the probability and severity of the
tured set of related plans and activities, consequences of risk events
executed in a particular order, to accom- Quality management process-based ap-
plish specified objectives proach that converts client requirements
Project approval decision to implement and inputs into an acceptable product
a project and fund it through a cycle of management respon-
sibilities, allocation of resources, prod-
Project engineer engineer who is respon- uct realization activities and controls,
sible for a system or area of a project and measurements, feedback, and process
coordinates the work of others to get the improvement
work completed
Quality surveillance and expediting over-
Project implementation also called project
sight of purchase orders for equipment
execution; project phases after approval: and materials by procurement and engi-
engineering and procurement, manufac-
neering personnel; generally involves as-
turing, construction, and commissioning
sessment of the vendor's quality systems,
and start-up
conformance with technical requirements,
Project planning evaluation of a project's and ensuring on time delivery
viability measured against specified crite-
Quantitative risk analysis (or assess-
ria and weighed with business judgment,
ment), QRA structured approach of
selection of a project design concept, and
assessing project risks that calculates
definition of that concept
risk probabilities and levels, then mea-
Proprietary information information that sures them against predetermined cri-
a company considers to give it a competi- teria; generally requires experts with
tive advantage access to historical risk data to perform
Prototyping manufacturing one of a series this type of risk assessment
of products ahead of full production Responsibility matrix see Table 3.1
PSB planning, scheduling, and budgeting RFP request for proposal; invitation to
Punch list list of deficiencies that must bid on a contract
be corrected; results from an inspection
RFQ request for quotation; invitation to
near the end of construction, manufactur-
submit a price for a purchased item
ing, or other such activities; deficiencies
must be completed before the product is Risk matrix see Figure 2.1
accepted Risk money cost allowance added to
Purchase order (PO) written agreement a proposal by the contractor to cover
to provide equipment, materials, and known risks
sometimes services; generally less com- Risk-weighted cost allowance amount
prehensive than a contract added to the control cost estimate to
Purchasing buying of goods (and some- allow for known risks; the cost associ-
times services) through a purchase ated with each known risk is multiplied
order by its probability of occurrence and
210 Glossary

summed to calculate the risk-weighted Short-listing reduction in the number of

allowance options to two or three; can refer to the
Root cause basic or systemic cause of selection of a few bidders that will be
an incident or accident (e.g., faulty evaluated in more detail before a final
procedure, not following procedure) selection is made; also refers to a reduc-
tion in the number of concepts prior to
Schedulemcritical path activities from final concept selection
beginning to end on a schedule that
determine its total duration; a delay in Site queries questions from the construc-
critical path activities will delay the tion sites back to engineering to clarify
completion date of the project, unless a design matters; there is a system for this
recovery plan can be developed on larger projects

S c h e d u l e ~ f r o n t line line drawn verti- Six sigma quality management process-

cally on a bar chart schedule to indicate based, quality management approach
the degree of completion of each activity that seeks to reduce unacceptable varia-
(bar); if the front line for a particular tions (defects) in the process to below
activity is to the right of the present 3.4 defects per million by process im-
date, that activity is ahead of schedule provement, process management, and
process design or redesign
and vice versa
Schedulemlevel 4 generally a schedule Specification project document that pre-
scribes (usually in detail) how something
of detailed activities; definition varies
from organization to organization is to be engineered, manufactured, con-
structed, or used; e.g., design specification,
Schedule--level 5 generally a schedule compressor specification, paint specifica-
that includes every document, drawing, tion, steel specification, piping specifica-
data sheet, report, specification, work tion, flange torquing specification, heavy
package, and other deliverables to be lifting specification
completed by the project
Specs slang for specifications
Schedule reserve allowance (usually sev-
eral months) added by project manage-
Start-up phased process of bringing
a process or plant into full or partial
ment or higher authority near the end of
operation
a schedule to account for known or un-
known risks Subcontract contractual agreement be-
tween a contractor and another contractor
Scope of supply listing of what will be
to provide goods and services for a por-
delivered under a contract or purchase
tion of the originally contracted work
order (list of deliverables to be furnished
to the client ) Subproject part of a large project that
operates as a project within a project
Scope of work part of a contract that de-
because of its size or importance
scribes the work to be undertaken by the
contractor Supplier vendor or contractor
Shop drawings engineering drawings Systems completion see commissioning;
that give the manufacturer's shop per- sometimes includes construction work
sonnel the details to fabricate equipment that could not be or was not completed
and other items in earlier phases
Glossary 211

Systems engineer project engineer respon- the details or project systems and area
sible for a system or group of systems engineering
Systems engineering initial phase of Verificationconfirmation that a work
project detailed engineering or manu- product meets its specified require-
facturing when systems are defined, ments
engineered, and specified
WBS work breakdown structure; detailed
Technical requisition technical require- listing of every significant part of the
ments for a purchase order prepared by contractual work; includes components,
the engineering team subcomponents, work packages, and
Total area responsibility project engi- other project deliverables
neer's mind-set that he or she is com- Widget humorous name for a manufac-
pletely responsible for everything that tured product
has to do with his or her area
Witness points activities in the manufac-
Validation overall demonstration that a turing process that the customer wants
product functions as designed to observe
Variation order same as change order; Work-arounds approach to get around a
some projects use variation order for problem or mitigate risks; synonymous
contract changes and change order for with contingency plans
purchase order changes
Workface slang for the level in an orga-
Vendor party to a purchase order who nization where work actually is done;
agrees to provide the goods and services analogous to the "coal-face" in a coal
Vendor data engineering data required mine
from manufacturers; it is necessary Work-hour hour worked by a man or
to engineer interfaces and complete woman