Engineering Encyclopedia

Saudi Aramco DeskTop Standards

Procuring Detailed Engineering Services

Note: The source of the technical material in this volume is the Professional
Engineering Development Program (PEDP) of Engineering Services.
Warning: The material contained in this document was developed for Saudi
Aramco and is intended for the exclusive use of Saudi Aramco’s employees.
Any material contained in this document which is not already in the public
domain may not be copied, reproduced, sold, given, or disclosed to third
parties, or otherwise used in whole, or in part, without the written permission
of the Vice President, Engineering Services, Saudi Aramco.

Chapter : Project Management For additional information on this subject, contact

File Reference: PMT10402 Rod Kuan on 873-9701
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Procuring Detailed Engineering Services

Content Page

REVIEWING A PROJECT PROPOSAL, THE EXPENDITURE REQUEST (ER)

ESTIMATE AND THE PROJECT EXECUTION PLAN AS A BASIS
FOR DETAILED ENGINEERING ............................................................ 1
Introduction .............................................................................................................. 1
Developing Basis for Detailed Engineering ............................................................... 1
Project Proposal............................................................................................. 1
Expenditure Request (ER) Estimate............................................................... 3
Project Execution Plan (PEP) ........................................................................ 3
DEVELOPING THE ENGINEERING SERVICE'S SCOPE OF WORK FOR A
GENERAL ENGINEERING SERVICES (GES) SERVICE ORDER ......... 5
Introduction .............................................................................................................. 5
Engineering Services Work Scope ............................................................................ 5
Detailed Engineering Design Scope............................................................... 7
Material Procurement Assistance................................................................... 9
Drawing Control............................................................................................ 9
Management and Controls ............................................................................10
Project Design Reviews ................................................................................10
Project Status Reporting ...............................................................................11
Miscellaneous...............................................................................................11
PREPARING A SERVICE ORDER AND DEVELOPING THE TECHNICAL
SELECTION CRITERIA FOR ENGINEERING SERVICES....................12
Introduction .............................................................................................................12
Technical Qualifications...........................................................................................13
Screening Procedures...............................................................................................13
Instructions for Preparation of Technical Proposal ...................................................14
SELECTING A GENERAL ENGINEERING SERVICES (GES) CONTRACTOR ............16
Introduction .............................................................................................................16
Technical Screening .................................................................................................16
Service Order Requisition ........................................................................................16
Service Order Proposal.............................................................................................17

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Estimated Peak Manpower.......................................................................................17

WORK AID 1: GUIDELINES IN THE PROCUREMENT OF THE DETAILED
ENGINEERING SERVICES CONTRACT ...............................................20

GLOSSARY........................................................................................................................21

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REVIEWING A PROJECT PROPOSAL, THE EXPENDITURE REQUEST (ER)

ESTIMATE AND THE PROJECT EXECUTION PLAN AS A BASIS FOR DETAILED
ENGINEERING

Introduction

In order to select a Contractor and to manage the Detailed Engineering Phase of a project the
Project Engineer must thoroughly understand what is to be accomplished in this phase of the
Project Life Cycle. To accomplish this, the Project Engineer uses the documents available to
him at that particular stage of the project. The documents available at the initiation of the
Detailed Engineering Phase are:

• The approved Project Proposal and minutes of the Technical and Project Proposal
meetings
• The Expenditure Request Estimate

• The Project Execution Plan (PEP)

Using these three key project documents and their supporting detail, the Project Engineer can
develop a comprehensive basis for control of Detailed Engineering activities, and to monitor the
detailed engineering contractor's performance.

Developing Basis for Detailed Engineering

The following discussion addresses the documents available to the Project Engineer for the basis
of Detailed Engineering.

Project Proposal

The Project Proposal confirms the design basis as presented in the project Design Basis Scoping
Paper (DBSP). It establishes the detailed design basis and scope of a proposed facility including
its size and general layout, provides a specification for the functional and performance
requirements of the integral systems and subsystems. It also establishes procurement and
construction strategies, the basis for estimating and pertinent scheduling information.

The Project Proposal defines the detailed project requirements identified through careful
evaluation of project objectives, procurement and construction strategies and plans by the
SAPMT, Project Proponent, and Engineering Services.

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The Project Proposal document in broken down in the following major categories:

• Table of Contents
• Project Summary

• Project Description

• Communication Requirements

• Safety and Security Requirements

• Materials and Equipment

• Drawing Index and Drawings

• Project Milestone Schedule

• Estimating Support

• Appendix

It can be seen from an examination of the contents of the Project Proposal listed above, that the
proposal includes a comprehensive definition of the project. This basic information definition
becomes the basis of detailed design effort.

The purpose of Detailed Engineering Phase is to define the project to such an extent that the
materials can be purchased, and the facility can be constructed according to design. In other
words, detailed engineering is not an end unto itself, but another phase aimed at accomplishing
the final objective – a completed onstream facility.

To develop the control basis for Detailed Engineering Phase, the Project Engineer must first have
a thorough understanding of the project scope as presented in the Project Proposal. The Project
Engineer should prepare a list of all the deliverables required to be prepared by either the Saudi
Aramco Project Management Team (SAPMT) or the detailed engineering contractor. The
deliverables may be broken down into the following categories.

• Drawings
• SAMS Input Sheets

• Purchase Requisitions and Non-Material Requirements (NMRs)

• Engineering Calculations

• Operations, Startup and Maintenance Procedures / Manuals

• Construction Contract Job Specifications

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• Reports, Schedules, Estimates

• Studies

Expenditure Request (ER) Estimate

The ER Estimate Package prepared by the Project Engineer to support the request for
Expenditure Request Approval (ERA) contains the following components:

• Expenditure Request Form, Saudi Aramco 56D

• Basis of Estimate

• Detailed Estimates

• Contractor's Supplement Package

• Project Milestone Schedule

• Project Execution Plan

The basis of the estimate is the foundation for determining the cost magnitude of the Scope of
Work. In order to develop the control for the Detailed Engineering Scope of Work, the
following major categories of work will need to be quantified:

• Design office engineering contractor manhours and costs

• Design office SAPMT costs

• List of major equipment items and cost

• Labor productivity adjustment

• Variations and exceptions

The Project Engineer will be able to use this information and even expand the list of deliverables
from the Project Proposal and the Expenditure Request.

Project Execution Plan (PEP)

The PEP formally establishes an agreement between the SAPMT and the Proponent. It defines
the execution of the project including schedule, methods of executing the work and the
responsibilities of the parties involved. The PEP relates the project Scope of Work with
contracting and material plans, cost information summary schedules, departmental
responsibilities and SAPMT staffing requirements.

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The PEP contains the following sections:

• Table of Contents, Approval Sheet, and Revision Control

• Project Summary

• Contracting Plan

• Materials Procurement Plan

• Project Cost and Funding

• Project Execution Sequence

• Project Milestone Schedule

• Project Organization and Interfaces

• Areas of Concern

The PEP is the key project document which ties the execution to the details presented in the
Project Proposal and ER. With this added level of detail, the Project Engineer will be able to
prepare the basis for detailed engineering and establish the baseline for controlling project
performance.

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DEVELOPING THE ENGINEERING SERVICE'S SCOPE OF WORK FOR A

GENERAL ENGINEERING SERVICES (GES) SERVICE ORDER

Introduction

The Project Engineer develops a General Engineering Services (GES) Scope of Work in order to
allow the GES contractor to bid the work and understand the manpower requirement to
efficiently execute the work.

The Engineering Services Scope of Work is the heart of the contract which provides the
guidelines and framework under which the contractor will perform the work. The Project
Engineer should include in the scope not only the technical responsibilities of the contractor, but
also the administrative responsibilities. The project controls and reporting guidelines that the
contractor must follow while performing the design work are as much a part of a successfully
executed project as are the technical details.

Engineering Services Work Scope

Service-order Contractor selection depends on the nature of the scope of work. GES contract
Schedule B covers a full range of engineering services: from field investigations and studies
preparatory to developing a more detailed engineering scope of work, through preliminary and
detailed engineering, to engineering services during construction. The services provided by GES
Contractors also include consultant services, such as reviewing another GES Contractor's design
package for constructability, troubleshooting of construction problems in the field, and
specialized expert discipline support to SAPMT or in-house design teams.

The best way to ensure competent engineering services on a contract is to involve the selected
contractor early and throughout the life of a project, so that their familiarity with the design
objectives, problems, concepts, and drawings is maintained through the project completion.

Contractor selection is based on two primary criteria:

• The ability to do the work (the evaluation includes the contractor's performance
rating on the latest similar or related completed jobs).

• Current available in-house capacity ( the evaluation includes manpower capacity,

work location, facility and equipment of the selected contractor).

The Project Engineer has the responsibility for determining a Contractor's ability to perform the
detailed engineering work. Contracts Administration Unit (CAU) has the responsibility to
maintain current data on contractor availability and report on in-house capacity.

The Project Engineer has the responsibility to select a contractor depending on the requirement
of a particular project. All contractors having the ability to do the work are considered. The
contract is awarded to the one which meets the best of above two primary criteria.

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The following determines contractor selection and the issuing of work.

Routine Scope of Work - A scope of work is routine if it does not involve a:

• Single-source availability

• Contractor with a demonstrable technical superiority

• Critical Schedule

• Contractor with a demonstrable cost reduction

If multiple qualified GES Contractors are available, then there should be no prejudice against
selecting the contractor with the lowest committed capacity. The required documentation
consists of a memorandum concurred to by the service-order signatory listing the available
qualified contractors, including current committed capacity information.

Demonstrable Technical Superiority - When capability and capacity to perform a scope of work exist
in-Kingdom, and there are multiple contractors, but there is a demonstrable technical superiority
of one source whose use will clearly benefit Saudi Aramco in quality of work, then the Project
Engineer documents the facts and selects the technically superior source. Conversely, one or
several technically inferior contractors may be eliminated from consideration for particular work
when their use would clearly jeopardize the final quality of the work. The SAPMT may enlist
the support of CAU in compiling such a case, or they may develop their own case and inform
CAU.

Critical Schedule - When capability and capacity to perform a Scope of Work exist in-Kingdom,
and there are multiple qualified Contractors, but there is a clear demonstrable superiority in the
capability of one Contractor to meet the required schedule, then the Project Engineer documents
the facts and selects the most capable source. The Project Engineer may enlist the support of the
Planning & Scheduling Division (P&SD) of the Resources Planning Department (RPD) or CAU
in compiling such a case, or they may develop their own case and inform CAU.

Demonstrable Cost Reduction - When capability and capacity to perform a scope of work exist in-
Kingdom, and there are multiple qualified Contractors, but there is a clear demonstrable
reduction in the cost to Saudi Aramco of using one source, then the Project Engineer documents
the facts and selects the lowest-cost Contractor. They may enlist the support of Cost Services
Division (CSD) of RPD, Contract Review & Cost Compliance Department (CR&CCD) or CAU
in compiling such a case, or they may develop their own case and inform CAU. In either case,
CR&CCD is a party to the negotiation of the service-order price falling under the latter's review
limit.

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Detailed Engineering Design Scope

The Detailed Engineering design Scope of Work consists of the project definition included in the
key project documents presented in the previous section. The more accurate the information
given to the GES Contractor in the beginning, the faster the contractor can be in producing
finished deliverables.

From the previous mentioned documents, the Project Engineer should be able to identify the
physical deliverables to be provided by the design contractor. These should produce a design
which permits the procurement of materials and sufficient details to construct the facilities. In
addition the contractor may be requested to prepare or assist in the preparation of the project
sequence of execution, as well as the preparation of the project documentation (drawings,
operating / maintenance manuals, etc.). The contractor may also be requested to perform a
constructability review prior to the commencement of the design.

The Scope of Work can be divided into two parts. They are:

I. Project Execution/Administrative Requirements

The project execution/administrative requirements define the procedures the

contractor agrees to follow in executing the contract.

Examples include:

• Meeting formats and responsibilities

• Method of handling correspondence

• Contractor space requirements for SAPMT in-house representatives and

communications requirements

• Proposed project management organizational charts including availability

of personnel

• Contract typical report formats

II. The Job Specification

In establishing the Job Specification, the Project Engineer will want to prepare an
outline or detailed plan for the work. Each activity in the plan should include
duration and start/finish dates.

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As a minimum, the Scope of Work Job Specification must include:

1. A list of drawings covering the following topics:

• Plant location and layout on plot and off plot

• Process design basis including operating variables

• Process flow diagrams (PFD's)

• Piping and instrumentation diagrams (P & ID's)

• Electrical one line diagrams

• Site topography and soil data

• Modifications to existing plants

• Corrosion control

• Impact on and interface with other related projects

• Environmental impact assessment

• Fire protection and safety requirements (including risk impact

statement, if necessary)

• Communications and Supervisory Control and Data Acquisition

(SCADA) Systems

2. Any special studies, i.e., H2S effect on Gas Turbine operation

3. Existing drawings to be modified for interface identification

4. Identification of Direct Charge (DC) Surplus and (Saudi Aramco Material

System) SAMS excess materials for use on the project

5. Engineering Calculation Books

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Material Procurement Assistance

The GES Contractor routinely provides procurement assistance to the SAPMT. The activities
involved in procurement assistance include:

• Purchase requisition preparation

• Development of suggested bidders list

• Technical evaluation of bids

• Technical evaluation of vendor drawing issued to SAPMT for approval prior to

manufacture

The remaining procurement activities normally remain the responsibility of Saudi Aramco.
These include:

• Bidder identification

• Release for quote

• Commercial evaluation

• Purchase order award

• Inspection

• Expediting

• Transportation and traffic management

Resource Planning Department (RPD) Performance Standards, gives the Project Engineer
historical information for typical project types, the number of engineering contractor manhours
required to prepare drawings. The Project Engineer uses the RPD Performance Standards to
establish the manhours required to produce equivalent A size drawings for the particular project
type. This represents the budget for comparing the engineering contractor's bids and the baseline
for the Scope of Work. The Project Engineer should keep this information strictly confidential.

Drawing Control

The accurate keeping and updating of the Drawing Control is the responsibility of the GES
Contractor. The Drawing Control contains the list of all drawings required to procure and build
the project. The Drawing Control includes drawings which were partially completed during the
Preliminary Engineering Phase as well as drawings which are contemplated to be essential for
project completion.

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The Drawing Control is a very important control document for the Project Engineer since it
defines the largest set of deliverables required of the GES Contractor.

Management and Controls

In addition to the technical scope of work, the Project Engineer may want the GES Contractor to
perform some of the project management and project controls responsibilities.

In order for the Project Engineer to assure the contractor is producing the contract deliverables
consistent with the utilization of manhours, the Project Engineer and Engineering Contractor
must constantly review, evaluate, measure and assess contractor manhour utilization and cost
expenditures.

The Project Engineer should assure that the contractor prepares and updates monthly, a manhour
and manpower evaluation of work performed to-date and a forecast of work to complete.

The project execution/administrative requirements define the procedures the contractor agrees to
follow in executing the work. Examples include:

• Meeting formats and responsibilities

• Method of handling correspondence

• Contractor space requirements for SAPMT in-house representatives

• Proposed project management organizational charts including availability of

personnel

• Typical report formats

Project Design Reviews

The contractor is required to prepare for three project design reviews during the
engineering/design phase. These are the Design Reviews held at 30%, 60%, and 90%
engineering completion stage. Each of the reviews should be held in the design contractors
offices and attended by the SAPMT and the Project Proponent. The Project Engineer may wish
to invite other specialists if there is significant involvement by their area of expertise. In order to
fully take advantage

of these reviews, and the input from the proponent developed in the meeting, the Project
Engineer should have prepared a design-logic sequence which identifies which drawings need to
be available for the review.

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Project Status Reporting

It is important for the Project Engineer to allow the GES Contractor to report his status. The
Project Engineer may want to recommend a format for the reporting of the Contractors, but he
should refrain from influencing the Contractors measured progress. If it is not as favorable as it
should be, the contractor needs to recommend what actions will be implemented to correct the
deviation from the planned progress. The status report keeps the contractor's performance and
program reporting visible to the SAPMT and his management.

The Project Engineer will require the GES Contractor to prepare the following standard reports:

Weekly Reporting

• PR/PO Status Report

• Drawing Control

• Manpower Utilization and Forecast

• Project Meeting

• Work Breakdown and Forecast

Monthly Reporting

• Project Update

• Project Status Report

All reporting should be tied to the system used by the GES Contractor to efficiently control the
work. The SAPMT should utilize the Work Breakdown Structure (WBS) to identify project
breakdown and progress reporting responsibilities.

Miscellaneous

From time to time it may be necessary for the Project Engineer and the GES contractor to
respond to specific additional requirements. Examples include:

• Studies not identified at the Project Proposal

• Quarterly Review Meeting

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PREPARING A SERVICE ORDER AND DEVELOPING THE TECHNICAL

SELECTION CRITERIA FOR ENGINEERING SERVICES

Introduction

After the Scope of Work has been prepared and contact has been made with the CAU, the Project
Engineer may proceed with the process of securing the services of an engineering contractor.
Addendum 1, General Services Contracting Flowsheet, will help the Project Engineer visualize
the processes. The Project Engineer should refer to the Internal Procedure for General
Engineering Services Contracts, prepared by the RPD which delineated the processes of securing
a Detailed Engineering Contractor..

Preparing a Service Order

The Project Engineer prepares a service order requisition, which indicates the CAU service
required by checking the appropriate box for "Lowest Committed Capacity" recommendation or
indicates any other service required. The Project Engineer should submit the Scope of Work and
service order requisition to CAU. All documents must be signed and dated. CAU reviews the
documents for completeness. If requested, CAU then processes the requisition through the
contractor selection system to screen for qualifications and capacity, and returns the package to
the Project Engineer with a single recommended contractor.

The Project Engineer will review the CAU recommendation when provided and uses the
information supplied by CAU to document the reasons for the selection. That documentation
addresses the qualifications, schedule or cost advantages anticipated from the proposed
contractor selection and is approved by the service order signatory.

Whenever a Scope of Work is routine, the SAPMT determines through his own investigations or
requests a recommendation from CAU as to the qualified source with the lowest committed
capacity. In such a case, the documentation in CAU files, including service order history,
manpower roster and current capacity status, may be cited as the source-selection justification.

Whenever a Scope of Work has elements that are frequently designed In-Kingdom by more than
one GES Contractor, but the Project Engineer has facts to support a preference for a given GES
Contractor source, the Project Engineer documents these facts in a "Qualification/Capacity
Statement". That statement may use information currently available from either CAU files or
experience of the Project Engineer, and may be supplemented with information from current
GES Contractor office visits, interviews and questionnaires, if necessary. The Project Engineer
may request CAU assistance in compiling those facts or they compile them independently.

If the CAU recommendation is not acceptable to Project Engineers, then the Project Engineer
requests technical screening assistance from CAU.

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Technical Qualifications

Qualifications of the Engineering Contractor include availability of project management

leadership and expertise in all relevant disciplines, as well as availability of supporting staff.

The criteria that establish GES Contractor qualifications for a particular project are listed below
in descending order of desirability.

1. Prior satisfactory involvement of the GES Contractor's current personnel in the

Budget Item (BI) under consideration or in a previously completed BI.

2. Prior completion by the GES Contractor's current personnel of a similar BI,. i.e..,
disciplines or components similar to those of the facility to be designed.

3. Prior involvement of the GES Contractor's current personnel in a similar BI,

although the BI may not yet be complete.

4. Available expertise and manpower in all relevant disciplines

5. Although presently assigned to another project, the required expertise and

manpower are scheduled to become available to allow the BI under consideration
to be completed within the project schedule.

6. Expertise and manpower are not presently available but can be mobilized from
Out-of-Kingdom to allow completion of the BI under consideration within the
project schedule.

Screening Procedures

The procedure used for screening depends on the relative availability of experienced personnel
among the GES Contractors for a particular Scope of Work.

Whenever prior experience or current resources available among GES Contractors are
insufficient to justify a source selection, the Project Engineer may elect to determine the most
qualified source by means of a technical competition. In such a case, the Project Engineer
requests a number of GES Contractor companies to submit technical qualification statements.
The number may range from as few as two companies to all GES Contractors that have been
identified on the basis of currently available data as "qualified" or "most-nearly qualified".

In such a case, procedures that are normally used to protect the confidentiality of bids and to
ensure the fairness of evaluation must be used. CAU coordinates the compilation of bid
packages, evaluation criteria and evaluation plans, and organizes the distribution of bid
packages, hosts the job explanation meeting and coordinates visits to GES Contractor offices
(but not job site visits). The Project Engineer prepares the selection recommendation based on
the scoring of the bids.

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Instructions for Preparation of Technical Proposal

The contractor, or contractors, if required by CAU and the Project Engineer, will be instructed to
prepare Technical and Commercial Proposals. The contractor should be instructed to prepare his
response based on the information provided to him in the bid documents and an example is
included as Addendum 2, Instructions for Preparation of the Technical and Commercial
Proposal. The Bidders are instructed not to use any outside information unless he specifically
identifies it in his bid. This is intended to keep all bidders on an equal basis.

The Project Engineer will prepare a Technical Bid Evaluation Sheet based on the Instructions to
Bidder. This Evaluation Sheet takes the form of a spreadsheet with specific points assigned for
each individual category. The contractors bids are evaluated based on the predetermined criteria.
Contractors whose evaluation does not meet the minimum should not be awarded the work. The
evaluation system should be sufficiently stringent so as to eliminate some of the bidders.

Technical Evaluation

The purpose of the Technical Evaluation is to determine whether the bidders understand the
Scope of Work and whether their proposals meet the Job Specification requirements. The
Technical Evaluation should reveal cases where an otherwise capable contractor has failed to
plan the use of its resources so as to satisfactorily accomplish the work. For this reason, the
Technical Selection Criteria and Evaluation are important for identifying a potential “low ball”
bidder before opening commercial proposals.

The Technical Selection Criteria should be an objective and analytical method of evaluating and
scoring each bidding contractor against a set standard. Categories and a grading system are
predetermined, before the bids are opened.

The Technical Evaluation establishes the requirements for each element of the technical criteria,
which is evaluated by rating against a scale with a predetermined passing score. The program
may require a pass for each individual element regarded as being of critical importance or may
only require the average rating to achieve the passing score or a combination of the two.
Extreme care should be taken in establishing the relative weighting of each element to ensure
that the method, when applied, gives reliable results.

The Technical Evaluation considers whether spot checks of contractor's facilities are necessary
prior to commercial bid opening to ensure that the representations of the bidder are accurate.
The subjects addressed in the selection criteria will be specific to the technical nature of the
work, and may include the following depending on the contract:

• The contractor’s proposed organization

• Resumés of key personnel

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• Functional execution plan (work plan)

• Work schedule, including mobilization and demobilization

• Manpower plan compared to available resources

• Contractor’s materials identification and procurement capabilities

• Contractor's CADD capabilities

• Contractor's project controls capabilities

• Safety and loss prevention program

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SELECTING A GENERAL ENGINEERING SERVICES (GES) CONTRACTOR

Introduction

The Project Engineer will receive help in selecting a GES contractor by the Contract
Representative assigned to this contract procurement. The service order requisition process will
be discussed in this section.

Technical Screening

The Project Engineer has the responsibility to select a contractor depending on the requirement
of the particular project. All contractors having the ability to do the work are considered. The
contractor awarded the work is the one best meeting the two primary criteria. For convenience
they are repeated here:

• Ability to do the work (the evaluation includes the contractor's performance rating
on the latest similar or related completed jobs).

• Current available in-house capacity (the evaluation includes manpower capacity,

work location, facility and equipment of the selected contractor).

The Project Engineer has the responsibility for determining the contractor's ability to do the
work. CAU has the responsibility to maintain current data and report to the Project Engineer on
in-house capacity. Where a technical screening is required, the Project Engineer should proceed
according to the process discussed in the previous module.

Service Order Requisition

The Project Engineer requiring the services of an In-Kingdom design engineering GES
Contractor must prepare a Service Order Requisition. The GES Contracts Service order
Requisition, Form CAU-2, (See Addendum 3), is submitted by the Project Engineer to CAU to
define the engineering services needed. The requisition must be supported by a brief Scope of
Work and a Company Estimate. Those documents must refer to the BI or Job Order (JO)
number. The documents are submitted to CAU.

The Project Engineer must refrain from discussing the project or soliciting commercial proposals
from any GES Contractor during the process of obtaining requisition approval.

The Project Engineer has sixty days from the date the requisition is stamped by CAU to initiate a
service order. The service order requisition will be canceled if not used within that period.

A Service Order, Saudi Aramco Form No. 4291, (See Addendum 4) is used to officially direct an
In-Kingdom GES Contractor to perform design and or engineering work for Saudi Aramco in
accordance with the terms and conditions of its GES contract.

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Service order processing begins when the GES Contractor's proposal is accepted by the
appropriate signature authority in Saudi Aramco.

The service order must be issued before the actual start of work. Any design and or engineering
work performed under a GES contract must be covered by a properly executed service order. A
service order is intended to be a one page document and so the detailed Scope of Work, special
or general instruction, mathematical details or other relevant details must be added as
attachments.

Signature authority levels for the issuance of individual service orders are set forth in the
"Delegation of Authority" by the Vice President, Engineering & Project Management. General
guidelines state:

1. Original Service Orders: The signature level is based on the monetary value of
the service order.

2. Revision to Service Orders: The signature level is based on the total monetary
value of the service order, including all revisions. If the revision constitutes a
reduction, then the original signature level prevails.

3. Services Review Committee (SRC) Approval Requirements: The service orders

and revised service orders with an aggregate value greater that US $2,000,000
must be approved by SRC prior to issue.

Service Order Proposal

All sole source proposals must be negotiated. The service order signatory assumes the
responsibility to ensure that the proposal is thoroughly reviewed and negotiated in order to obtain
a favorable price for Saudi Aramco.

The service order amounts are target figures (with the exception of the fee) and can vary over the
life of the project, depending on the actual manpower mix used. The Project Engineer is
responsible for controlling GES Contractor staffing and other resources to service order budgets,
as provided by the terms of the GES contract.

All proposals are subject to review by Contract Review and Cost Compliance Department
(CR&CCD). Any calculation errors identified by CR&CCD must be corrected and endorsed by
the GES Contractor.

Estimated Peak Manpower

In procuring the detailed engineering services of a GES contractor and completing the Service
Order Requisition, the SAPMT must estimate the size of the effort and the Estimated Peak
Manpower requirement. The Project Engineer can calculate the peak manpower requirement by
following the Trapezoidal technique. This technique is based on the fact that a typical project
has three phases as it relates to manpower requirements.

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1. Manpower Build-up
2. Peak Manpower
3. Manpower Rundown

Figure 1 shows a typical Trapezoidal Manpower Profile on a project. The duration for the
buildup, peak, and rundown periods will depend upon the nature of the project, the completion
requirements, and availability of information and resources.

Peak Men
Staffing

› Build up › › Peak › Rundown ›

Time

Trapezoidal Manpower Profile

Figure 1

Typically, the peak manpower on an engineering project is 1.5 to 1.7 times the average
manpower for the project duration. Based on this assumption, the peak manpower can be
calculated as shown in the following example:

Estimated Manhours = 40,000

Estimated Project Duration = 20 weeks
Manhours per week = 40

Average Manpower per week = 40,000

40 x 20

= 50

Estimated Peak Manpower= 50 x 1.5

based on 1.5 peak factor
= 75

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The time to build up to the peak manpower and the duration of the peak manpower will vary and
depend upon the project's unique characteristics.
Commercial Proposal

The following information is included with the commercial proposal:

• GES Contractor's name and contract number

• Budget Item/Job Order number and project title

• List of the staff who will perform the work, by classification, name, nationality,
etc., in accordance with the CAU-approved roster

• The estimated manhours for each person assigned to the work

• The estimated costs, which are calculated by extending the estimated hours by the
non-profited labor rates from Schedule C of the GES contract

• The total estimated non-profited labor cost and estimated overtime cost and the
total manhours for labor

• The fee percentage applicable to this service order

• The fee amount as the result of multiplying the total estimated non-profited labor
cost by the fee percentage. Estimated overtime cost for labor calculated at the
time of service order initiation does not attract a fee

• A summary of other allowable cost items directly related to the execution of the
work, such as reproduction expenses, computer charges, PMT office space,
consultants and CADD

• The total estimated service order cost is the summation of the total estimated non-
profited and overtime cost for labor, the fee amount and any other allowable cost

• The schedule start and completion dates that the GES Contractor proposes for the
work

• The equivalent number of "A"-size drawings

• Other deliverables to be furnished by the GES Contractor

• Signature of the GES Contractor representative

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WORK AID 1: GUIDELINES IN THE PROCUREMENT OF THE DETAILED

ENGINEERING SERVICES CONTRACT

1. Sample "Requisition for Services" Form CAU 2 is attached for use as a reference.

2. Using the detailed engineering contractor cost of $8.2 MM, convert the monetary figure
to manhours and time scale the efficient use of the manhours. The cost of engineering
man-hours vary from $40-$60/hr. Based on these man-hours develop average manpower
peak using the trapezoidal Manpower Profile Calculations.

3. Some of the following issues should be considered as part of the technical evaluation.

• The contractor’s proposed organization

• Resumés of key personnel

• Functional execution plan (work plan)

• Work schedule, including mobilization and demobilization

• Manpower plan compared to available resources

• Contractor’s materials identification and procurement capabilities

• Contractor's CADD capabilities

• Contractor's project controls capabilities

• Safety and loss prevention program

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GLOSSARY

BI Budget Item

CADD Computer Aided Design and Drafting

CAU Contract Administration Unit

CIR Contractor Industrial Relations

CR&CCD Contract Review and Cost Compliance Department

DBSP Design Basis Scoping Paper

ER Expenditure Request

ERA Expenditure Request Approval

ERC Expenditure Request Completion

GES General Engineering Services

GPM Gallons Per Minute

IFP Issued For Proposal

JO Job Order

P&ID Piping and Instrumentation Diagram

PEP Project Execution Plan

PFD Process flow diagrams

PP Project Proposal

OOK Out of Kingdom

SAPMT Saudi Aramco Project Management Team

SCADA Supervisory Control And Data Acquisition

SRC Services Review Committee

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ADDENDUM

1 General Services Contracting Flowsheet

2. Instructions for Preparation of the Technical and Commercial Proposal

3. GES Contract - General Services Order Requisition - Form CAU-2

4. Saudi Aramco Form No. 4291, Service Order

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Addendum 1 - General Services Contracting Flowsheet

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Addendum 2 - Instructions for Preparation of the Technical and Commercial Proposal

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ATTACHMENT – C

TYPICAL FORMAT FOR REPORTS

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Addendum 3 - GES Contract - General Services Order Requisition - Form CAU-2

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Addendum 4 - Saudi Aramco Form No. 4291, Service Order

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