The management was pleased with this position.
7.2 Evaluating the System
Using call-off contracts, supervisors could easily farm out most of the day-to-day maintenance work with selected contractors. On completion, they could measure the executed work in the specified units. The contractor would submit an invoice based on the approved rates.
Together with an engineer from the company, I followed a maintenance job from initiation to completion. The job was to pull a spade from a 4” 150# line containing product after it had been prepared and made safe for maintenance work. The job was executed by a contractor. The work permit was obtained, the necessary precautions were taken, and the job was completed efficiently by the two contractor’s fitters assigned, without any incident or hold-up.
From the moment the contractor’s fitters were involved up to the time they went away, it took a little less than one hour. At this time, I was not familiar with the agreed rates, but on the basis of my observation, I expected that the contractor would invoice the company for 2 man-hours of work. When the actual invoice arrived, prepared strictly in accordance with the agreed norms, it was for 8 man-hours. The schedule of rates indeed specified an effort of 8 man-hours for removing a 4” 150# spade from a line at ground level, and for remaking the joint. The company’s engineer who accompanied me was more embarrassed than shocked. His embarrassment was caused by the fact that such gross discrepancies had not been discovered earlier. They had simply been accepting the norms which had been agreed between them and the contractors.
7.3 Reviewing the Existing Norms
After this observation, the maintenance and engineering manager of the company agreed to carry out a review of the existing norms immediately. He then realized that there was no one in his organization who was sufficiently confident to make time estimates of maintenance activities. This explains why no one had thought of reviewing the norms until now. I suggested a two-man team be formed to work under my guidance. One would be an experienced supervisor and the other the engineer who accompanied me earlier. They soon realized how simple estimating was if one used real-life experience and common sense. I guided them for the first few items, after which the two of them carried on, on their own.
The review revealed that all items of work were grossly over-estimated; some, such as the de-spading work we had observed, were over by a factor of 4! No wonder that the contractors had “voluntarily” given up the inflation correction for the past two years.
7.4 Corrective Actions
When the contractors were confronted with this, it was not difficult to get them to accept that the existing norms were indeed grossly over-estimated and should be reviewed. They agreed to reduce the existing norms by 25% across the board with immediate effect, while the review got under way.
A joint company/contractor team was set up to formally review and agree revised norms on an urgent basis.
7.5 Benchmarking and Results
On return to my base, I initiated an intra-group benchmarking exercise. The purpose was to compare the norms for unit maintenance activities which were agreed between other associate companies and their contractors. A number of companies welcomed this and agreed to participate. Data gathering and processing took some time and effort. Once accomplished, however, this proved to be very useful. The product was regularly used during subsequent performance reviews. Many companies realized for the first time how far their norms deviated from that of their peers. Although some deviations could be explained by special local conditions, these benchmarks provided a basis for constructive discussion between contractor and company.
Some of the results, together with the question which generated that unit rate, are illustrated in Figures 7.1 to 7.7. Locations are marked AAA, BBB, etc., to protect their identity.
Excavation
Carry out excavation activities to expose an underground pipeline—to inspect the protective coating system, check for corrosion, and take wall thickness measurements. The soil surface is not covered by pavement or any other cover; the excavated soil can be put along the trench (the soil is not contaminated so the excavated soil in total can be put back). The total amount of soil to be excavated and backfilled is approximately 30 cubic meters. See results in Figure 7.1.
Figure 7.1 Excavation & Refilling—Relative Costs
Insulation
Removal of cladding (galvanized iron or aluminum sheeting) and rock wool insulation over a length of 30 meters of a 6” and a 12” pipe, lying next to each other, in a pipe bridge of approximately 6 meter height. The lagging and rock wool insulation are in good condition and can be put back after inspection of the pipe. Scaffolding and grit blasting or power brushing are excluded from the contract. See results in Figure 7.2.
Figure 7.2 Insulation Removal and Replacement—Relative Costs
Scaffolding
Erect and, after use, remove tubular scaffolding for the above-mentioned example (insulation work on a pipe bridge) to the local safety requirements. See results in Figure 7.3.
Grit Blasting
The 6-inch pipe mentioned in the example for insulation needs to be grit blasted to SA 2.5. Estimate man hours. See the results in Figure 7.4.
Figure 7.3 Scaffolding—Relative Costs
Figure 7.4 Grit Blasting—Relative Costs
Spading/Despading
As part of a job, spades have to be placed to isolate a vessel. For this purpose, 4 nos. 8” 300#, 4 nos. 6” 300#, and 6 nos. 2” 150# spades have to be installed in the existing line work. Estimate man hours required per spade of each size, including cleaning the flange faces, placing new gaskets, placing new stud bolts, and de-spading after the job is completed. See results in Figure 7.5.
Figure 7.5 Spading/Despading Pipes—Relative Costs
Figure 7.6 Welding 4”, 6,” and 10” Pipes—Relative Costs
Welding
A few lines in the pipe bridge mentioned in the examples above need to be renewed; each has a length of approximately 30 meters. These pipes are 4”, 6”, and 10” in size; all are schedule 80 carbon steel. Safe-to-work preparations, scaffolding, and insulation work are done by others. Please estimate man-hours per completed weld of each size, including joint preparation, grinding, alignment, and welding. See results in Figure
