116R-21: Basis of Estimate - As Applied in Maintenance Turnarounds for the Process IndustriesAACE International, August 25, 2021
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This recommended practice (RP) is a guideline for the development of Basis of Estimate (BoE) documents for maintenance turnaround cost estimates in the process industries. It provides information specific to maintenance turnarounds and to the process industries that is not available in the general RP 34R-05, Basis of Estimate.
This document discusses maintenance turnarounds for continuously operating units in the process industries.
For the purposes of this document, the term maintenance turnaround is defined using the American Petroleum Institute (API) definition, namely: “a planned, periodic shutdown (total or partial) of a process unit or plant to perform maintenance, overhaul and repair operations, and to inspect, test and replace process materials and equipment” . Facilities that run on a continuous rather than a batch production cycle must, every few years, shut down operations to provide access to the production units in order that essential maintenance, modification and inspection work can be carried out that could not be done while the units are in operation.
The scope of a maintenance turnaround (TA or TAR ) typically includes:
Maintenance turnarounds are not capital projects. Although they do have a beginning, middle and end and hence fulfill one criterion for a project, they are generally of shorter duration, typically funded from operational expense instead of capital expense and a host of other differences, most notably that the work done is largely inspection and maintenance or repair, with minimal installation of new components.
Maintenance turnaround events (which are sometimes viewed as a short-interval project by contractors or owner’s internal maintenance crews) typically also have traditional capital project tie-in scope which needs to be executed in the turnaround event window, as well as the standard maintenance and inspection (M&I) scopes. The cost estimates covered by this RP are for the M&I work scope only. For a discussion of BoE documents for capital projects, refer to RP 106R-19, Basis of Estimate – As Applied in Engineering, Procurement, and Construction for the Process Industries.
The Total Cost Management (TCM) Framework section 7.3.4.4, Outputs from Cost Estimating and Budgeting highlights the need to develop a basis of estimate (BoE) document. This RP addresses the steps and issues to be considered in developing a comprehensive BoE document for a maintenance turnaround estimate. A key objective of a BoE is that the reader of the BoE is able to clearly understand the underlying basis behind the estimate, including any deficiencies in estimate preparation that may impact the estimate.
This RP is intended to provide a guideline template for a BoE document that can be applied across the process industries. But each specific industry within the overall process industries will have its own terminology and may have minor custom needs. Therefore, this RP is not intended as a standard that must be rigidly adhered to in all aspects. Rather it can be used as a guide, with the objective being to produce a BoE that allows the reader of the BoE to be able to clearly understand the underlying basis behind the estimate, including any deficiencies in estimate preparation that may impact the estimate.
For the purposes of this document, the term process industries is assumed to include firms involved with the manufacturing and production of chemicals, petrochemicals, hydrocarbon processing, energy, and utilities. One common thread among these industries is the continuous operation (as opposed to batch operation) of their process plant, thus necessitating regular maintenance turnarounds. The other common thread (for the purpose of estimate classification) is their reliance on process flow diagrams (PFDs), piping and instrument diagrams (P&IDs), and electrical one-line drawings as primary scope defining documents. These documents are key deliverables in determining the degree of scope definition, and thus the extent and maturity of estimate input information.
In this document, we use the term maintenance & inspection (M&I) scope to describe the turnaround scope. However, be aware that some process industries use the term operations & maintenance (O&M) scope to describe the same thing.
[Look Inside]
This document discusses maintenance turnarounds for continuously operating units in the process industries.
For the purposes of this document, the term maintenance turnaround is defined using the American Petroleum Institute (API) definition, namely: “a planned, periodic shutdown (total or partial) of a process unit or plant to perform maintenance, overhaul and repair operations, and to inspect, test and replace process materials and equipment” . Facilities that run on a continuous rather than a batch production cycle must, every few years, shut down operations to provide access to the production units in order that essential maintenance, modification and inspection work can be carried out that could not be done while the units are in operation.
The scope of a maintenance turnaround (TA or TAR ) typically includes:
- Inspection of equipment to comply with company or government regulations.
- Inspection of pipework for corrosion and erosion damage, both internal (e.g., process weak points) and external (e.g., corrosion under insulation, or CUI).
- Cleaning, repair and maintenance of equipment, pipework and instrumentation (e.g., pulling and cleaning heat exchanger tube bundles, repairing leaks in pipework or checking of pressure relief valves).
- Minor upgrades and modifications to the facilities that are small enough to be dealt with by the maintenance team and are not stand-alone projects.
Maintenance turnarounds are not capital projects. Although they do have a beginning, middle and end and hence fulfill one criterion for a project, they are generally of shorter duration, typically funded from operational expense instead of capital expense and a host of other differences, most notably that the work done is largely inspection and maintenance or repair, with minimal installation of new components.
Maintenance turnaround events (which are sometimes viewed as a short-interval project by contractors or owner’s internal maintenance crews) typically also have traditional capital project tie-in scope which needs to be executed in the turnaround event window, as well as the standard maintenance and inspection (M&I) scopes. The cost estimates covered by this RP are for the M&I work scope only. For a discussion of BoE documents for capital projects, refer to RP 106R-19, Basis of Estimate – As Applied in Engineering, Procurement, and Construction for the Process Industries.
The Total Cost Management (TCM) Framework section 7.3.4.4, Outputs from Cost Estimating and Budgeting highlights the need to develop a basis of estimate (BoE) document. This RP addresses the steps and issues to be considered in developing a comprehensive BoE document for a maintenance turnaround estimate. A key objective of a BoE is that the reader of the BoE is able to clearly understand the underlying basis behind the estimate, including any deficiencies in estimate preparation that may impact the estimate.
This RP is intended to provide a guideline template for a BoE document that can be applied across the process industries. But each specific industry within the overall process industries will have its own terminology and may have minor custom needs. Therefore, this RP is not intended as a standard that must be rigidly adhered to in all aspects. Rather it can be used as a guide, with the objective being to produce a BoE that allows the reader of the BoE to be able to clearly understand the underlying basis behind the estimate, including any deficiencies in estimate preparation that may impact the estimate.
For the purposes of this document, the term process industries is assumed to include firms involved with the manufacturing and production of chemicals, petrochemicals, hydrocarbon processing, energy, and utilities. One common thread among these industries is the continuous operation (as opposed to batch operation) of their process plant, thus necessitating regular maintenance turnarounds. The other common thread (for the purpose of estimate classification) is their reliance on process flow diagrams (PFDs), piping and instrument diagrams (P&IDs), and electrical one-line drawings as primary scope defining documents. These documents are key deliverables in determining the degree of scope definition, and thus the extent and maturity of estimate input information.
In this document, we use the term maintenance & inspection (M&I) scope to describe the turnaround scope. However, be aware that some process industries use the term operations & maintenance (O&M) scope to describe the same thing.
[Look Inside]