Capital Project Management Support

Tom Wolf                          twolf5165@gmail.com                                    (281)565-4038

 
Capital Cost Estimates - Understanding, Analyzing, and Evaluating

List Price:  $60.00

 8" x 10", 232 pages

Available at Amazon.com and other retailers

One of a series for the person requiring more than just an answer.
 
Refining and petrochemical project management personnel, most without estimating background, are required to understand, analyze, and determine validity of complex cost estimates prepared by others. 

This book is specifically designed and written as a desktop resource. In addition to presenting an organized approach to analyzing cost estimates, results of decades long historical cost data is provided, and  needed assistance to answer the crucial question of “is this estimate reasonable?” is presented.
 
ISBN-13:
       978-1461180739
ISBN-10: 
       1461180732

 

CONSTRUCTION WAGE RATES - Refinery and Petrochemical Facilities

 

T. E. Wolf, Sugar LandTexas

 

(Please note this is copyrighted material, it is provided for your information.  Please feel free to use it, but please don't abuse the copyright.  Thank you.)   

  


 

The best source for competitive, area specific refinery and petrochemical facility construction wage rates for estimating is historical data from your recent work.  However, this may not be available for any number of reasons.  Understanding the variables and components that go into the construction wage rate development for estimates is essential for the project engineer, project manager, and client.  


Below are some guidelines, rules of thumb, references, and a spreadsheet that can help shed a little light on the subject of refinery and petrochemical facility construction wage rate development for cost estimates and estimating; with the provided spreadsheet you can play with the variables and evaluate the sensitivity of those variables on the bottom line, while improving your understanding of the build-up and composition.


See MSExcel spreadsheet below.

 

Davis Bacon Wage Rates – see the following website for wage rates required on certain projects  http://www.access.gpo.gov/davisbacon/

 

Occupational Outlook Handbookalso see  http://www.bls.gov/oco/ 

 

General Superintendent – General Superintendents are generally not used on projects under $150 MM, but are on larger, multi-unit projects.  The cost of the general superintendent is typically coded to the Indirect Field Cost, Staff Labor, and not considered a Direct Field Cost, but this is not a 100% rule.

 

Superintendent – Generally, there are three (3) general foremen per Superintendent.  And the cost of the superintendent is also typically coded to the Indirect Field Cost, Staff Labor.

 

General Foreman – Generally, there are three (3) crews per general foreman and the general foreman is paid something like $1.50 to $2.00 per hour more than the foreman; as labor rates increase, you would expect this premium to increase too.  Typically, the general foreman is a salaried, non-exempt position (the GF receives overtime pay), receiving all salaried benefits, except relocation, and the cost of the general foreman is also typically coded to the Direct Field Cost and thus included in the calculation of Craft Wage Rate by Account, see spreadsheet for details.

 

Foreman – A craft foreman is responsible for a crew of up to 12 people (see Crew Mix below for more specific data) and is paid $1.75 to $2.25 per hour more than the journeyman.  Exception, the utility foreman is usually paid $0.30 to $1.00 per hour more than the civil craft journeyman rate.  The cost of the foreman is coded to the Direct Field Labor.

 

Journeyman – A craftsperson will start as an apprentice and progress in six (6) month increments, depending on experience, education, skill level, and performance.  As a rule of thumb, it typically takes 42 months experience in the craft to attain the designation of journeyman.  Exceptions: 

 

  • Utility/Laborer – 18 months
  • Cement Finisher – 30 months
  • Painter – 24 months
  • Scaffold Builder – 36 months
  • Insulator – 36 months
  • Equipment Mechanic – 36 months
  • Rodman/Chainman – 36 months

 

The journeyman rates for these crafts are generally:

 

  • Utility/Laborer – About half that of other journeyman.
  • Cement Finisher – Same as other journeyman.
  • Painter – 6 months less than other journeyman.
  • Insulator – 6 months less than other journeyman.
  • Equipment Mechanic – $0.50 to $1.00 less than other journeyman.
  • Rodman/Chainman - 6 months less than other journeyman.


Apprentice (Helper) – A crafts person is classified a helper through the first 24 months progression in the craft.  The starting apprentice (helper) rates for all crafts are generally the same.  The apprentice (helper) starting rate is nominally 50% of the journeyman rate, and the 24 month progression helper rate is nominally 75% of the journeyman rate, except for crafts having shorter than 42 months progression to journeyman.  The progression from the starting rate increases at an increasing rate until the 24 month rate and the journeyman rate are attained, e.g. starting rate plus $0.85 plus $0.90 plus $1.00 plus $1.10 plus $1.25 plus $1.35 plus $1.55.

 

Combination Pipewelder – A combination pipewelder is generally paid a $0.75-$1.50 per hour differential.

 

With these guidelines as a starting point, go the the spreadsheet and see how the rates are used in conjunction with the specific craft crew makeup (called the crew mix).  The subject of refinery and petrochemical facility construction wage rate development for cost estimates and estimating is both complex and can be difficult to comprehend.  But with the above guidelines and the spreadsheet you can improve your understanding of the build-up and composition of construction wage rates used in capital cost estimates for estimating refinery and petrochemical facilities.


This website’s goal is to provide a source for project management support, information, education, and training material for project managers and project engineers primarily in the refinery, petroleum, and petrochemical industries.  In the execution of these projects, the project manager or project engineer may find the need for additional information and support; most times this support will come from within his or her company.  But there are times additional sources are needed.  This website is intended to meet those additional needs.

 

Project success is a function of the people skills and a broad understanding of diverse subject matter of the project management team.  Scope definition, execution considerations, construction strategy, planning and schedule impact, resource utilization, overcoming difficulties and problem solving, etc, etc, etc, are just a few to enumerate even without addressing the technical side.  Then there is the cost, estimating, and estimate side, factor estimates, detail estimates, forced detail estimates, basis of estimate, construction wage rates, and so on.  Then there is the technical side, material issues, piping systems, equipment considerations, civil and structural, electrical and control systems, document control, specifications, standards, and regulations.  Then there’s the variety of processes both refining (hydrocrackers, delayed cokers, etc.) and petrochemical facilities, the list is almost endless.

 

Project management is as much art as science.  The key is to continue to learn and never stop learning.



Tom Wolf has over 40 years petroleum and petrochemical facility experience, including 25 years in project management defining scope, estimating, and estimate preparation.  He holds a BS degree in Mechanical Engineering.

 

© 2013 by Thomas E. Wolf.  All rights reserved.  No part of the information contained in these webpages may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage or retrieval system without written permission of the copyright holder, except for the inclusion of brief quotations in a review.

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