Tiptoe Around Trouble

Prudently ponder how to approach a problem-plagued project

By Dirk Willard, Contributing Editor

Looking back at his project I wondered how he ever could foul it up this badly — at least unintentionally. He’d hired an offshore engineering company half-a-world away to save money. He hadn’t carefully defined the material properties, basic engineering document and drawings (BEDD) or the materials of construction. He sought low-bids for the design instead of time-and-material ones. He never reviewed preliminary drawings with manufacturing. Wow, what a mess. Yet the firm I was working for agreed to pick up the pieces — to build the process — without process engineering hours!

It’s important to gauge the character of the customer engineer.

Although these situations seldom work out well, there are ways to minimize the damage to your firm and your reputation. Let’s consider the contract first. If you must accept a low-bid contract, document everything; date-stamps are important. Keep pushing for a time-and-material contract. Remember, the engineer on the other side is desperate to find someone to blame — don’t provide the opportunity. You’ll be under pressure to get work done as quickly as possible but don’t give in. Doing the job right is your best defense.

First, ask for the following: 1) hours to rework the process and instrumentation diagrams (P&IDs) and review them with manufacturing; 2) complete material and physical properties; 3) the usual pipe specifications and other site documents, including items like instrument air pressure, steam pressure, etc., as part of the BEDD; and 4) all project documentation, partial or complete, up to that date. Don’t expect much help from the former contractor — it even may mislead you. And, most of all, find out to what extent the previous firm will be involved in the project. Will it approve your drawings? Is it still working on details? You must know!

If you can’t get satisfaction on these points, it’s important to weigh the political dynamics of the situation. Do you have a long-term relationship with the customer that could be hurt if you walk away? What’s the survivability of its project engineer — the one trying to offload this stinker on you? There’s little lasting value in building “points” with a person who’s likely a goner. The customer instead likely will associate your firm forever with a project that was scrapped, was over-run or had equipment that didn’t work as promised.

It’s important to gauge the character of the customer engineer. How pliable is that person to changes and cost over-runs when they come? Will your customer refuse over-runs? (Some firms have a well-deserved reputation for exploiting suppliers and contractors.) Another concern is cost; beware the customer that won’t pay for work provided. Beware of the customer that requests scope expansions but won’t accept costs. If the person is shifty, lazy, incompetent or unwilling to accept new ideas, then go to management and dump the job — don’t ride shotgun with this kamikaze.

Now that I’ve explained the risks, consider the potential benefits of victory. This customer could treat you and your company forever as heroes, the go-to-guys who saved its project!

So, assuming the dynamics look favorable, how do you proceed? First, organize. Second, buy some time. Let me explain. To organize this mess you must: 1) estimate the budget spent and budget remaining — a cash infusion may be required; 2) create a new team flow chart; 3) review the vendors — some of these are to blame, others won’t be acceptable to the customer; 4) replace all the old spreadsheets with new ones, if only for symbolic reasons; 5) remove all but essential personnel associated with the former disaster and keep the rest on a tight leash; and 6) set up a mechanism to document and justify any cost over-runs by asking engineers to keep e-mails and an estimate of hours spent.

The latter is especially difficult. An inexperienced customer may ask a question requiring many hours of engineering time. A cunning customer may play one department or engineer off against another to get unpaid work. It’s the responsibility of project management through meetings to rein in this sort of exploitation. With a cunning customer, ensure your company speaks with one voice through one person.

As always, weigh the benefits with the risks in taking on troubled projects. Remember, you’re here to make money.


dirk.jpgDIRK WILLARD is a Chemical Processing contributing editor. He recently won recognition for his Field Notes column from the ASBPE. Chemical Processing is proud to have him on board. You can e-mail him at dwillard@putman.net

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