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Article

Detail Engineering Completion Rating Index System (DECRIS) for Optimal Initiation of Construction Works to Improve Contractors’ Schedule-Cost Performance for Offshore Oil and Gas EPC Projects

1
POSTECH University & Hyundai Heavy Industries, Engineering Management Team, 400 Bangeojinsunhwan-doro, Dong-gu, Ulsan 44114, Korea
2
Graduate Institute of Ferrous Technology & Graduate School of Engineering Mastership, Pohang University of Science and Technology (POSTECH), 77 Cheongam-Ro, Nam-Ku, Pohang 37673, Korea
*
Author to whom correspondence should be addressed.
Sustainability 2018, 10(7), 2469; https://0-doi-org.brum.beds.ac.uk/10.3390/su10072469
Received: 9 April 2018 / Revised: 18 June 2018 / Accepted: 12 July 2018 / Published: 14 July 2018
Engineering, Procurement, and Construction (EPC) contractors with lump-sum turnkey contracts have recently been suffering massive profit losses due to re-works and schedule delays in offshore oil and gas EPC megaprojects. The main objective of this research is to develop and implement a detail engineering completion rating index system (DECRIS) to assist EPC contractors to optimize fabrication and construction works schedules while minimizing potential re-work/re-order. This is achieved through adequate detail design development and results in minimizing schedule delays and potential liquidated damages (i.e., delay penalties). The developed DECRIS was based on findings from an extensive review of existing literature, industry-led studies, expert surveys, and expert workshops. The DECRIS model is an evolution, and improvement of existing tools such as the project definition raking index (PDRI) and front-end loading (FEL) developed specifically for the early stage of engineering maturity assessment (i.e., planning, basic design, and front-end engineering design (FEED)), prior to EPC projects. The DECRIS was evaluated and validated with thirteen sample as-built offshore megaprojects completed recently. When the DECRIS was applied to the completed projects post-hoc, a correlation (R-squared 0.71) was found between DECRIS scores and schedule/cost performances. This is much superior to the PDRI-Industrial model’s correlation (R-squared 0.04), which was primarily devised for owners’ basic engineering or FEED completion assessment. Finally, as a means of further validation, project schedule and cost performance of an ongoing project was predicted based on the correlations found on the thirteen completed projects. The resultant predicted schedule and cost performance was well matched with the current project performance status. Based on the accuracy of the DECRIS model found in the validation, said model is an effective prospective tool for EPC contractors to manage their engineering and procurement/construction risks during the initial detail design stages. View Full-Text
Keywords: oil and gas megaproject; engineering; procurement and construction (EPC) project; DECRIS; schedule and cost integration; risks control; profitability; sustainability oil and gas megaproject; engineering; procurement and construction (EPC) project; DECRIS; schedule and cost integration; risks control; profitability; sustainability
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MDPI and ACS Style

Kim, M.-H.; Lee, E.-B.; Choi, H.-S. Detail Engineering Completion Rating Index System (DECRIS) for Optimal Initiation of Construction Works to Improve Contractors’ Schedule-Cost Performance for Offshore Oil and Gas EPC Projects. Sustainability 2018, 10, 2469. https://0-doi-org.brum.beds.ac.uk/10.3390/su10072469

AMA Style

Kim M-H, Lee E-B, Choi H-S. Detail Engineering Completion Rating Index System (DECRIS) for Optimal Initiation of Construction Works to Improve Contractors’ Schedule-Cost Performance for Offshore Oil and Gas EPC Projects. Sustainability. 2018; 10(7):2469. https://0-doi-org.brum.beds.ac.uk/10.3390/su10072469

Chicago/Turabian Style

Kim, Myung-Hun, Eul-Bum Lee, and Han-Suk Choi. 2018. "Detail Engineering Completion Rating Index System (DECRIS) for Optimal Initiation of Construction Works to Improve Contractors’ Schedule-Cost Performance for Offshore Oil and Gas EPC Projects" Sustainability 10, no. 7: 2469. https://0-doi-org.brum.beds.ac.uk/10.3390/su10072469

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