Contingency Analysis (Scoring) for Project Cost Estimates Project Title: ABC Project Project Design Stage: Area of cost: Process and Non-Process Infrastructure Team Member: Date: Project Manager Date: Cost Engineer: Date: Total estimated cost BEFORE ANY contingency = $ Gate 3 Scored by: Reviewed by: Compiled by: 10,000,000 Elements of Risk: NOT Included: totally unforesee-able events such as catastrophic weather conditions, unexpected changes in HES laws, unexpected labor strikes, unexpected changes in global market conditions Current Relative PROBABILITY of WEIGHT of total achieving 50/50 Weighted Score (Based on Project Team (10 = highest POTENTIAL for accuracy Assessment) variation, not magnitude of estimated cost) (1 = Nailed 10 = very uncertain and >0.5% of TIC) Refer to ASTM E1369, E1946, and E2168 for additional information 0 to 10 1 to 10 Process Design 10 2 20 Clarity of Project Objectives (Product Mix, Cap, Reliability, Logistics, Pre-investmt) Maturity of Technology (Technology: New, Modeled, Tested, Previously Built) 6 2 12 Process Complexity (Familiarity, Alternatives, Life Cycle Operability, Reliability) 4 5 20 Process Design Completeness (Equip List, PFDs, H&M Bal, P&IDs, Arrangemt, PSR) 4 5 20 5 6 30 Infrastructure Design Completeness (Plot Plan, Util Sources, Downstream) Specification completeness (Conventional, Non-Standardized, MOC/Corrosion) 3 4 12 Engineering, Design, & Inspection 4 6 24 Health, Environm'l, Safety (Regulations, Life Safety Services, FP, Security, Incentives) 2 2 4 Site Selection/Conditions (Geography, Geology, Government, Altitude) 4 6 24 Design Completeness (Philosophies, Conceptual, Preliminary, Definitive, Detailed) 4 3 12 Specification Complexity (Industry Standards, Plant Adapted, Mostly by Vendor) MTO Quantities (MTO Methods, Assumptions, Horizontal and Vertical Allowances) 2 5 10 2 3 6 Utilities (Knowledge of Availability & Locations) Project Management Project Execution (Proj Size, Complexity, Clarity of Cost & Schedule Drivers, Constructability) 5 4 20 Risk Management Plan (Identification, Measuremt, Crisis, Change Control, Penalties) 5 4 20 2 3 6 Project Staffing (Availability, Experience, Familiarity, Owner Involvement) Contracting Plan (Sole Source, CM, LSFP, Cost Plus, Incentives, No. of contracts, Clauses) 4 4 16 2 5 10 Estimating Method (Factored, Forced Qty, Budget Quotes, Error/Omissions, Input/feedback) Construction 4 3 12 Construction Type (new greenfield, retrofit, construct in an operating unit) Schedule (Long-Lead Items, Fast-track, Outages, Multiphased, Schedule Compression) 7 4 28 4 5 20 Site and work area (Access/Egress, Laydown area, Emergency & Construction Traffic) 8 4 32 Density & Congestion (Working area per person, Proximity of equipmt arrangement) 3 5 15 Above Grade and Subsurface (Obstructions, Soils Conditions / Stability, Drainage) Construction Labor (Availability, Skill Level, Familiarity, Local Labor Practices, Incentives) 4 3 12 3 4 12 Support Infrastructure (Storage, Housing, Transportation, Remoteness, Temporary) Site Conditions (Contamination, Seasons, Weather, Work Permits, Plant-ordered Delays) 4 4 16 Market Dynamics (Local/Domestic/Global Conditions, Escalation, Exchange Rates) 4 5 20 Dismantling & Demolition (Definition, Quantification) Commissioning & Start-up 2 4 8 Execution Plan (Train, Operate, Maintain, Philosophy, Reliability, As-Builts, Debottlenecking) Totals 111 110 441 Total Possible score = 2500 Score ratio = 0.176 "Normal" contingency chart (applied against lowest reasonable bid/cost after reviewed by project team) Mature Technology New Technology Retrofit Project Contingency Accuracy Range Contingency Accuracy Range Contingency Accuracy Range Gate 1 25% +/- 50% 30% +/- 50% to 75% 25% +/- 50% Gate 2 20% +/- 25% to 30% 25% +/- 40% to 50% 20% +/- 35% to 40% Gate 3 15% +/- 15% 20% +/- 30% 15% +/- 20% Gate 4 10% +/- 10% 15% +/- 10% 10% +/- 10% Accuracy range is based on a 50/50 chance of cost over-run/under-run "Normal" Contingency for this application (from above chart) = Scored Contingency (Score Ratio from above) = Additional Project Specific Risk/Concerns/Opportunities: Opportunity: a favorable outcome will occur Risk: an unfavorable outcome will occur (Describe Add/deduct%) 1. See separate "Opportunities List" 2. See separate Risk Fund / Restricted Reserve Log Total Contingency Percentage to be applied to this element of cost = Total Contingency in USD$ for this portion of project cost = $ 15% 17.6% -1.8% 4.0% 19.8% 1,980,000 Business Confidential 6/10/2008 (Rev 2/05) Page 1 of 1 pages