Understanding A Contractor’s Capabilities and Readiness to Perform

Estimated reading time: 3 minutes

Contract and contractor management for maintenance and turnaround management of process plants

Refineries, petrochemical plants and power plants are all major investments. Ongoing care and maintenance of the assets can involve up to 50% of the initial capital investment over the life of the plant. Increasing use of process plants by contractors is used to so support the maintenance and turnarounds of the plants, and contractors are developing specialised and focused capabilities.

A good relationship between the clients and contractor is a win-win situation for both parties. The use of contractors to support maintenance and turnarounds can add a lot of value, however the relationships are complex and there are many different contract styles available. Hence, it is important to optimise the management of contracts and contractors. This starts by picking the right contractor.

There are several ways to assess contractor’s capability that will help minimise cost and ensure that the best choice has been made. Several factors for contractor selection include contractor capability audits, contractor competences and the selection process itself. For example, to check a contractor’s competency, you can start by contact previous clients to check his past work and experience. Other points include:

• Interview the contractor and discuss similar jobs his company has done
• What is his general level of confidence?
• What guarantees or warranties will he agree to?
• Select contractors for auditing based on the criticality of the work they will do. For highly critical work, visit the contractor and audit his equipment and its maintenance records.
• Does he have spare parts or complete backups in case of a component failure to his equipment during the shutdown?
• How long will it take him to repair or replace broken equipment?
• What is the contractor’s labour force experience? This includes hiring and training practices, labor availability, retention history, and quality/experience of supervision.

Another way to assess contractor readiness to is by conducting regular audits during shutdown preparation. Ask the following questions during these periodic audits:

• What per cent of materials have been ordered and received?
• What is the percentage of jobs that have been planned?
• How much of the schedule has been built?
• What are the projected costs?
• What is the cost monitoring and control process?
• What per cent of the needed resources have been identified and confirmed?

There are several contractor competency and skill requirements you need to look out for, especially for contractor turnaround management skills. Skills are needed to manage the total process.

Contract and Contractor Management 3 Day Course is a training course held from 25-27 February 2019 (Kuala Lumpur), designed for delegates to learn all you need to know about Contract & Contractor Management for maintenance and turnaround management of process plants. Learn how to manage the tender process and contractor selection, the organisation of client and contractor to achieve total organisation integration, how to monitor and control using Key Performance Indicators and developing long-term partnering approach to assist clients.

Interested to read other articles? Check out: Managing Human Failures for Human Factors Engineering

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