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(EST-2525) FPSO Bid, the Delicate Choice of Class of Estimate

Level: Intermediate
Author(s): Ousmane Aidara
Venue: 2017 AACE International Annual Meeting, Orlando, FL

Abstract: In the FPSO Lease and Operate industry, bidding phases are generally short and presales cost often partly or totally paid by the Contractor. When it comes to prepare an offer for such uncompensated tenders, the Contractor always faces the difficult decision to know the sufficient level of project maturity to develop a confident price for a lump sum contract. Although AACE practices recommend having a class 2 or 1 estimate for a firm price, such level of maturity requires a long FEED with high cost. This leads to the development of a customized class 3 estimate sufficiently mature to develop a bid price for an FPSO project with an optimized presales cost.

Moreover, several construction models are involved where different estimating methods can be used. While using an analytical estimating method would require advanced engineering, the gain of accuracy appears to be limited when Contractors use internal standards with strong benchmarks.

This paper refers to experiences acquired from this development for FPSO products, derived estimating methods, and recommendations that could be applied in other industries.