Authors

• David Dozier
• John Dwyer
• Dan Meigs

Contents

• Contractor Licenses
• Integrator Selection
• Risk-Based Cost Estimation

Contractor Licenses

In the course of most SCADA projects the question of contractor’s licenses required for the participants in the construction phase of the project must be addressed. David Dozier of Timberline Engineering wrote this white paper to clarify the key concepts and considerations in addressing licensing issues.

The white paper describes the organizations that are usually involved in the construction phase of a typical supervisory control and data acquisition (SCADA) system project and the teams that bid/propose on these projects.

Integrator Selection

A successful SCADA project requires the creation of a biddable, constructable set of specifications and drawings that tell a contractor the work necessary to ensure the SCADA system meets the client’s requirements and expectations. Upon completion of the design, Timberline assists the owner in selection of an integrator who is best qualified to implement the design. Often, there are state and local regulations that dictate the integrator selection process. These processes are generally based on low bid or on technical merit, and Timberline has proven methodologies for implementing these processes.

However, where the owner has flexibility in the selection methodology, Timberline has applied a quantitative decision analysis process to select the integrator who will provide the best value to the client. This paper presents a selection methodology based on decision analysis techniques. This methodology promises to be fair to all bidders, sufficiently well documented to prevent, or at least withstand protest, and to result in selection of the bidder with the greatest likelihood of providing the best outcome.

Risk-Based Cost Estimation

Cost estimation for an engineering project traditionally involves development of an “engineer’s estimate” of the project cost to which contingency is added to develop the “total project cost.” Contingency is used to reflect the fact that regardless of the diligence and competence of the estimator, there is uncertainty in the final cost of the project. Material costs change over time, markups and markdowns vary from job to job, field conditions arise that were unforeseen during design, and other factors add to the uncertain nature of cost estimating.

This white paper outlines a technique to model each line item that makes up the engineer’s estimate as a probability distribution. The probability distributions can then be combined to create a statistical view of the total project cost. This approach shows the most likely construction cost and the probability that the cost will exceed any given contingency amount. This information allows decision makers to set budgets based on the amount of risk they are willing to accept.