POWER March 2011 - 72

PLANT MANAGEMENT
In the Beginning . . .
Having an owner's engineer on board early
can make a difference that lasts throughout
the life of a project, even after commissioning
and start-up. Developing a detailed project
scope definition at the outset can keep a
project on track, just as failure to properly develop
one can lower a project's odds of successful
completion. By carefully defining the
project size, location, technology selection,
configuration, scope, interfaces, and schedule,
an owner's engineer who is brought in
when a project is still in the conceptual stage
can help turn it into reality.
Some project owners choose to perform
their own initial conceptual design, cost estimating,
and scheduling. Before hiring an
owner's engineer, they may even bring on
an EPC contractor to serve as a technical
reviewer of project progress. Limiting the
owner's engineer role in that way can lead to
less-than-optimal results, caused, perhaps, by
a lack of clear scope definition that can lead
to project costs climbing above budget. An
owner's engineer who is involved from the
outset can help develop a project execution
plan and contracting strategy, and the owner
benefits from having a partner who is intimately
familiar with all aspects of the project
as the work progresses. Laying the groundwork
with the aid of an owner's engineer can
help the owner identify opportunities that
may otherwise be overlooked while avoiding
or minimizing risks.
An owner's engineer can also be helpful
in securing project financing. To get the
best possible financing deal, a project must
clearly define-at a very early stage-the
schedule, projected costs, and suitability of
technology and location. An owner's engineer
can help an owner achieve business
objectives and sometimes even explain why
something is not feasible while seeking suitable
alternatives. Often, white papers developed
by the owner's engineer can help with
effective evaluation of alternatives, identify
recommended solutions, and document the
reasons behind key decisions.
Beyond boosting documentation and rationale
to result in the best possible financing
deal for a project, having an owner's engineer
involved at the earliest stage of a project can
help an owner select the most qualified EPC
contractor. Potential EPC contractors want to
know many of the same things that financial
backers need to know as they make a decision
about whether to bid on a project. Just putting
an EPC contract together for a large project is
time-consuming and can cost several million
dollars, but devoting attention to the details
and minutia of all contract documents can
pay big dividends in avoided change orders
and delays as a project progresses.
72
Some key assistance that an owner's engineer
can provide at project inception include:
■ Defining and/or reviewing the project scope.
■ Assessing and evaluating the budget and
identifying financing sources.
■ Conducting feasibility and site selection
studies and alternatives analysis.
■ Analyzing available technologies and their
suitability to a project.
■ Preparing early project schedules and design
criteria.
■ Preparing technical specifications for
owner-furnished equipment.
■ Preparing EPC contract documents, including
RFP (request for proposal) issuance
and response analysis.
■ Providing permitting assistance and addressing
related environmental concerns.
Track and Trend
As a project moves along, the owner's engineer
is a critical link in keeping the work on
schedule and on budget, tracking progress,
and taking note of any emerging trends.
When issues arise, as they nearly always do
on large and complex projects, the owner's
engineer can be an effective middle man to
check original contract documents and review
events to avoid unnecessary and unproductive
finger-pointing. Depending on
the type of contract, the owner's engineer
may provide detailed design, overall project
management, contract administration, and
construction oversight.
An owner's engineer can be extremely
helpful to an owner who wants to purchase
equipment by writing technical specifications
and assisting in the purchase of ownerfurnished
equipment and making sure that
equipment suppliers are in compliance with
all contract requirements. The owner's engineer
can solicit and evaluate bids, negotiate
contracts, and work with the owner's outside
counsel to develop contracts.
Change management, implementation
of earned value, project cost reporting and
trending, and overall project controls are
other areas in which an owner's engineer can
help as a project progresses.
As the End Nears
By the time a project nears the start-up and
commissioning phase, the owner's engineer
should be a familiar and trusted advisor. At
that stage, the owner's engineer can develop
punch lists and document warranty items in
preparation for performance testing and handover
from commissioning to start-up.
The role of the owner's engineer can even
extend beyond commissioning, based on the
owner's needs. For example, if an owner's
team needs time to become familiar with an
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entirely new system, having an owner's engineer
stick around after project start-up to assist
with training can be helpful. A seasoned
owner's engineer can also help with any
problems that arise during the initial warranty
period, such as dealing with performance
expectations or emission limits.
How to Pick an Owner's Engineer
With the use of owner's engineer services
becoming more common across the industry,
more and more firms are offering such
services, so how do you select an owner's
engineer? Should you pick a large multi-disciplinary
firm? A small, specialized firm? A
local firm? Hiring a large, multi-disciplinary
firm might appear to be a good choice, but
that's not necessarily the case. A large firm
might not be the most cost-effective because
of a tendency to overstaff and burn many
manhours very quickly.
Actually, the most important step in selecting
an owner's engineer is to become
familiar with the individual employees who
are proposed to serve on the team. Take some
time to understand their expertise, how long
they have been in the industry, and the types
of projects they have worked on previously.
It's also a good idea to hire an owner's
engineer firm that has prior experience as
an EPC contractor because such companies
will bring an understanding of what is involved.
That said, it may not be wise to hire
an owner's engineer who is working for an
EPC contractor or who has key alliances with
vendors. It is important to look for one who
is " non-conflicted " -one who won't jump
ship when the RFP for the larger, potentially
more profitable EPC contract is issued. You
don't want a company that is trying to gain a
foothold at the early stages of project in order
to take on a larger role as the EPC contractor
later on. In fact, the project owner can prevent
this from happening by clearly defining
the role of the owner's engineer in the contract
and including a provision that precludes
the owner's engineer from bidding on any
related EPC contract.
How It Works in the Real World
The following brief project summaries illustrate
the variety of projects that can benefit
from having a trusted owner's engineer as a
key member of the project team.
Omaha Public Power District, Nebraska
City 2 Power Plant, New Construction.
In April 2005, after three years
of planning and assistance from an owner's
engineer, the Omaha Public Power
District signed an EPC contract to build
a 683-MW coal-fired power plant adjacent
to a unit built in the 1970s. (See " Top
Plants: Nebraska City Station Unit 2 " in
POWER | March 2011
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POWER March 2011

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