Offshore refinery contractor performance review

Brief

HKA was instructed to carry out an independent expert assessment of the project’s execution by the contractor. We were required to give our objective opinion on the contractor’s performance in relation to engineering, procurement, construction, and management of subcontractors.

This contractor performance review involved detailed analysis of:

• the level of manpower, both planned and actual;
• productivity, both planned and actual; and
• coordination and supervision of works by all contractors, subcontractors and vendors on and offshore.

What we did

HKA assembled a team of specialists drawn from various service areas – Forensic Technical Services; Energy, Resource and Industry; and Delay analysis. The team combined specific expertise with experience in offshore natural gas fields and skills in data analysis.

Monthly progress reports submitted by the contractor and subcontractors provided the necessary information for the performance review. The team examined all reports over a 30-month period covering all 10 work packages.

This data covered:

• planned, actual and forecast progress including both progress tables and progress s-curves;
• planned and actual manpower, both personnel numbers and worked hours, sourced from health and safety reports as well as manpower histograms; and
• areas of concern reported each month.

All this data was extracted, cleaned, processed and verified so that we could perform our analysis. This focused on various aspects, in particular:

• variances in planned versus actual manpower and progress made;
• the efficiency and productivity with which the work was done; and
• changes in reporting that indicated problems in any elements of the work packages.

The results of this analysis informed our review and assessment of the reported areas of concern. We also assessed compliance with the contractor’s obligations under the bespoke contract.

Following our initial assessment, a second delay analysis report was prepared for our client at the end of 2022.

Outcomes

Our performance review identified shortcomings in two key areas – project management and experience.

Productivity data was not provided by the contractor. We established that there was consistent progress under-achievement against the plan. This indicated that the plan was critically underestimated throughout, or manpower was insufficient.

The overall physical progress variance across the project showed there was a slow start-up followed by schedule slippage from commencement of the works. It was clear that the project would miss target dates unless mitigating actions were taken. However, underperformance continued throughout the project. Effective recovery plans were not put in place.

Key personnel lacked experience in several critical elements of the project. Underestimation of the fabrication and mobilization phases indicated a lack of personnel experience and knowledge sharing. Quality problems with certain vendors and the failure of the post-order team to conduct a thorough follow-up reflected, again, a lack of experience or insufficient resources.

Our reports will provide a robust basis for settling claims on completion of the project, now due in 2023. Grossly inflated, these amounted to US$260 million. Our reports demonstrate that the contractor is not entitled to extensions of time or prolongation costs.