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The purpose of this procedure is to define the
engineering estimating works in relation to bid
proposal development and preparation of ProjectBudget.
This procedure covers the methods used by
Engineering Department for estimating works and
the interrelated sequence to achieve a competitive
bid proposal and preparation of Project Budget
Estimates.
The scope covers Onshore and Offshore
construction works.
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BID APPROVAL SHEET (BAS)
Form No. MKD-4-006 is a document prepared by MMG Marketing
Department highlighting items of the bid, and including the customers
name, scope of work, type of contract, bid due date, special
information and executive management approval to proceed with the
engineering estimate.
ESTIMATING WORKSHEET
Form No. END-4-009B , is the worksheet used by the Estimating
Engineer for summarizing the data for total quantities, labor rates,man-hours, description of materials, unit cost of materials &
consumables, Equipment line-up & rental costs, subcontract quotation
costs and the grand total of the quantities and costs.
COSTING SUMMARY SHEET
Form NO. END-4-009D, is a summary of costs prepared by Engineeringupon completion of the bid estimate which covers costs for labor,
material, equipment rental, mobilization & demobilization, catering &
accommodation, subcontract work, contingency, projection and
escalation, medical & dental, and other costs representing the total
cost of the bid price.
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(continuation)
PROJECT BUDGET
Form No. END-4-009E, is a budget prepared by the
Engineering for the performance of a newly awarded
project. This covers direct and indirect cost.
DIRECT COST
Is cost for direct materials, labor, subcontract works asdefined in the summarized breakdown of Form END-4-009E
INDIRECT COST
Is cost for the mobilization & demobilization, home office
cost (i.e. requisitioning / procurement, task force, drafting,as-built, shop drawing. Etc..) construction of temporary
facilities, plane fare, recruitment, iqama, freight and
handling, field supervision , administration & support labor
and lied expenses.
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CHIEF ENGINEER
Overall management of the Engineering Department.
ESTIMATING MANAGER
Manage the Engineering Department estimating works,
prepare project budget.
ESTIMATING SUPERVISING ENGINEERSupervises the respective discipline engineering estimate.
ESTIMATING ENGINEER
Performs the respective discipline engineering estimate
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BID ESTIMATING
The Engineering Document Controller check all the bid documents from the
Central Documentation Control Section and forward to the Chief Engineer for
review. After his review, the bid documents are forwarded to the ProposalManager who makes a further review of the documents before distribution to
the Discipline Estimating Engineers. A review Record Sheet (Form No. END-
4-009F) will be signed by the Estimating Manager, Discipline Estimating
Supervising Engineers and Discipline Estimating Engineers after completing
their respective reviews.
The Discipline Estimating Engineer will make himself familiar with the scopeof the bid, will scan for possible subcontract works and availability of
material to be supplied by MMG.
The Discipline Estimating Engineer will highlight all important items in the
scope and check that no bid items have been overlooked. An Engineering
Estimating Check list (Form END-4-009C0 which identifies relevant items is
completed by checking the boxes for items considered to be part or not partof the bid scope. The Check List will be double check by the Discipline
Estimating Supervising Engineer. A blank format, sheet 11 of 11 Form END-4-
009C, will be completed up by the Discipline Estimating Engineer or by the
Discipline Estimating Supervising Engineer indicating other relevant items
for consideration.
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(continuation)
The Discipline Estimating Engineer shall produce a material quantity take-off
for each specific scope covered in the Estimating Work Sheet (Form No,
END-4-009B) The data on the Estimating Work Sheet are companyconfidential and is therefore not transferred to the customer provided
Summary Sheet.
Attendance to Job-Explanation Meeting and Site Visit will either be optional
or mandatory. Where the Bid Instruction Specification requires participation
to either or both, The Estimating Engineer will attend the Job-Explanation
Meeting and participate in Site Visit, However, where site visit is necessary ,on optional case, due to lack to bid information's, the Discipline Estimating
Engineer will conduct a site visit to get the true picture of the field situation.
The site visit will help the Discipline Estimating Engineer in his evaluation to
make realistic considerations and assumptions in his estimates that will
have significant impact on the bid final costing.
Where the attendance of the Discipline Estimating Engineer is not possible, theChief Engineer / Estimating Manager will appoint a deputy to attend the Job-Ex
Meeting and Site Visit.
For Bid projects located in Yanbu, Jeddah or elsewhere, where MMG has an
existing project, the Chief Engineer / Estimating Manager may elect to dispatch
the Discipline Estimating Engineer to the site or may request the Project Manager
of that existing project to deputies a representative to attend the Job-Ex and
participate the Site Visit.
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(continuation)
Grey areas in the work scope that required contract evaluation shall be
referred to the Contract s Department for prior clarification with
Customer.
Materials to be supplied by MMG are identified, quantified and if there is
no current cost (within 90 days) available for the material, Cost Request
(END-4-007A) is prepared. This form is forwarded to the Central
Purchasing Department (CPD) to obtain prices. CPD shall furnish
Engineering with at least three (3) suppliers quotation to arrive atminimum cost for major MMG supplied plant permanent materials.
Where there is no response to the Cost Request (END-4-007A) at the
due date required from CPD. (reference Procedures No. END-3-007
and CPD-3-006) the Discipline Estimating Supervising Engineer and /
or the Discipline Estimating Engineer shall follow up the Cost
Request with CPD, Likewise, CPD shall advise concerned DisciplineEstimating Engineer regarding the status of the Cost request or if
the prices is not available from the vendor on time for inclusion in
the bid proposal. For prices not available, the Estimating Manager
will advise to use the previous canvass price.
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(continuation)
The Discipline estimating Supervising Engineer will determine items to
be subcontracted, prepare a Request for Quotation, using Form No.
END-4-007D and forward to Contracts Department. The request willinclude, the subcontract technical specifications, list of proposed
subcontractors, and applicable drawings. Costs from quotations will be
included in the final costing using the applicable Project Code of
Accounts, PCD Procedure No. OCD-3-005. Contracts Department shall
provide Engineering with the updated list of approved subcontractors.
When all quantities have been establish, they are entered into thecomputer using Lotus/Excel Spreadsheet. Form No. END-4-009B. This
gives the direct cost for consumables, equipment rental cost and other
determined subcontract item costs.
Once all data, such as direct man-hours, materials & consumables
quantities and equipment line-up has been summarized, the estimate isanalyzed making use of the standard unit man-hours in the Estimating
manual in Procedure END-3-011, by extracting the overall average
productivity rate in various terms such as mhr/lm, mhr/ton, mhr/dia-inch,
mhr/dia-m,. This data is then compared with previously awarded project
estimates and adjusted as necessary.
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(continuation)
The Discipline estimating Supervising Engineer checks the progress
of the estimate, correcting any discrepancies, and highlights any
items which may have been overlooked.
The Discipline Estimating Supervising Engineer shall review and
check the status of the cost request, any queries on grey areas, or
other items relevant to the bid estimate.
Addenda to the bid, received from the Customer are brought to theattention of the Discipline Estimating Engineer for consideration.
Once the estimate is completed, the Discipline Estimating
Supervising Engineer review the final quantities, direct man-hours,
material and equipment costs, including outside rentals.
Corresponding adjustments to man-hours and cost are made after
further analysis of other cost considerations and assumptions.
The Estimating Manager conducts the final review of the estimate,
checks the breakdowns and commercial conformity of the proposal.
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(continuation)
The Discipline Estimating Supervising Engineer supplies the
Technical / Commercial / Documentation Proposal Manager the
direct man-hour breakdowns per activity using Form No. END-4-
009B, to provide a reference for extracting indirect man-hours,
indirect equipment-hours, and the formulation of bid construction
schedules by the Proposal Engineer assigned from bid Planning and
Scheduling programs. Indirect man-hours and equipment-hours are
then forwarded to the Bid Development Proposal Manager forcosting.
The Discipline Estimating Supervising Engineer forward all direct
cost breakdown to the Bid Development Proposal Manager, The Bid
Development Proposal Manager carry out the indirect costing an
prepare the comprehensive Commercial Proposal. A costing
Summary Sheet (Form No. END-4-009D) is used for summarizing thecosting breakdown.
The completed Commercial Proposal is forwarded by the Bid
Development Proposal Manager to the Estimating Manager for
review.
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(continuation)
Reviewed Commercial Proposal is forwarded to the Technical
/ Commercial / Documentation Proposal Manager for finalcompilation in the bid form, and finally forwarded to the Chief
Engineer for approval.
Upon approval of the Chief Engineer, the Commercial
Proposal is then presented by the Bid Development Proposal
Manager to the Management for review and any directionadjustment to the final bid selling price, if no adjustment is
directed, the Management makes the final approval.
Any directed adjustments are made by the Bid Development
Proposal Manager, and the adjusted commercial proposal is
returned to the Management for approval or with theabsence of an Executive Officer, a designated authorized by
the Management.
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(continuation)
PROJECT BUDGET
Upon award of a project, the Estimating Manager prepares a
Project Budget. The Estimating Manager prepares the
project budget using Form No. END-4-009E.
The Project Budget estimate covers all direct and indirect
cost, for the complete performance of the project. Thecompleted Project Budget is forwarded by the Estimating
Manager to the Chief Engineers approval.
The Project Budget is then discussed by the Chief Engineer
with the assigned Project Manager. Any adjustment is made
before the budget is approved by the Project Manager andfinally forwarded for final approval of Management.
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(continuation)
HANDOVER TO PROJECT TEAM
Upon approval of the Project Budget by the Management, the Chief Engineer willinstruct the Bid Development Proposal Manager to call a Project Briefing /
Handover Meeting, attended by the following department:
1. Executive Management
2. Engineering
3. Marketing
4. Projects
5. Projects Control6. Central Purchasing
7. Contracts
8. Quality Assurance / Quality Control
9. Loss Prevention
10. Finance & Accounting
11. Equipment Supply Division
12. Central Warehouse13. Human Resources
(Personnel & General Services)
Attendance is required by each participant in the Meeting Attendance register,
Form No. QAD-4-213 used by the chairing personnel. Subject and agenda of the
Project Handover Meeting is summarized using Form No. END-4-009G.
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(continuation)
Engineering will provide the Project Overview for the Project
Management Team and other parties involved.The Engineering Department will organize the Project Task Force,
whose function is define in Procedure END-3-003, headed by the
Project Task Force Supervising Engineer, to provide assistance to
the assigned Project Manager prior to mobilization to the project
site.
The necessity for an organized Project Task Force is dependent and
flexible to the size of the project, and upon recommendation by the
Project Manager for its formation.
The Engineering Department will then turnover the supervision of
the Engineering Project task Force to the assigned Project Manager
together with all project contracts and Engineering Documents.
Distribution controlled copy of the approved Project Budget (Form
No. END-4-009E) is issued by the Engineering Chief Engineer to the
assigned Project Manager only, using the Transmittal Form No. QAD
4-202
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START
EXECUTIVEMANAGEMENT
FINAL APPROVAL
ESTIMATING MANAGER
PREPARE PROJECTBUDGET
END-4-009E
AWARDEDPROJECTS
BID
ESTIMATING
ESTIMATING MANAGER
FORWARD PROJECTBUDGET TO CHIEF
ENGINEER
END-4-009E
CHIEF ENGINEER
DISSCUSS THE BUDGETWITH THE ASSIGNEDPROJECT MANAGER
END-4-009E
CHIEF ENGINEER /PROPOSAL MANAGER
CALL PROJECT BRIEFINGHANDOVER MEETING /
PROVIDE PROJECTOVERVIEW TO PROJECT
MANAGEMENT TEAM
CHIEF ENGINEER
FORWARD PROJECTBUDGET FOR APPROVAL
BY MANAGEMENT
END-4-009E
CHIEF ENGINEER/PROJECT MANAGER
ORGANIZE PROJECT TASKFORCE, TURNOVER
SUPERVISION AND PROJECTDOC. TO PROJECT MANAGER,PROJECT DOCUMENTATION &
BID DRAWINGS
ENGINEERING DOCUMENTCONTROLLER
FORWARD ALL BIDDOCUMENTS FROM CENTRALDOCUMENTATION SECTION
TO THE ESTIMATINGMANAGER
BID DOCUMENT
ESTIMATING ENGINEER
ENTER ESTABLISHIEDQUANTITIES INTO COMPUTERPROGRAM FOR DIRECT MAN-
HOURS AND COST
END-4-009B / END-4-009B1
ESTIMATINGSUPERVISING ENGINEER
REVIEW FINALQUANTITIES DIRECT
MAN-HOURS,MATERIALS AND
EQUIPMENT COST
PROPOSAL MANANGER
PRESENT TO THE EXECUTIVEMANAGEMENT FOR REVIEWAND DIRECTION OF ANY
ADJUSTMENT TO FINAL BID
BID COMMERCIAL PROPOSAL
ESTIMATING MANAGER
REVIEW AND FORWARD TOESTIMATING SUPERVISING
ENGINEER
END-4-009F
ESTIMATING ENGINEER
IDENTIFY MATERIALSSUPPLIED BY MMG &PREPARE COST REQUEST FORMATERIAL & SUBCONTRACT
ITEMS
END-4-007A / END-4-007D
ESTIMATING MANAGER
CONDUCT FINAL REVIEWOF ESTIMATE CHECKBREAKDOIWN AND
PROPOSAL COMMERCIALCONFORMITY
TECHNICAL / COMMERCIAL /DOC PROPOSAL MANAGER
FORWARD COMMERCIALBID PROPOSAL TO THECHIEF ENGINEER FOR
APPROVAL
ESTIMATINGSUPERVISING ENGINEER
FURTHER REVIEW ANDDISTRIBUTE TO ESTIMATING
ENGINEER
END-4-009F
ESTIMATING MANAGER
ATTEND JOBEXPLANATION MEETINGAND PARTICIPATE IN
SITE VISIT
ESTIMATINGSUPERVISING ENGINEER
SUPPLY THE TECHNICALCOMMERCIAL/DOC PROPOSALMANAGER THE DIRECT MAN-
HOURS BREAKDOWN PERACTIVITY
END-4-009B
ESTIMATING MANAGER & TECH/ COMM / DOCUMENTATION
PROPOSAL MANAGER
REVIEW COMPLETEDCOMMERCIAL PROPOSAL /
COMPILATION TO BID FORMAND FORWARD TO CHIEFENGINEER FOR APPROVAL
END-4-009F
ESTIMATING ENGINEER
HIGHLIGHTS / CHECK BIDITMES ACCOMPLISH THEESTIMATING CHECKLIST
END-4-009F/END-4-009C
ESTIMATING ENGINEER
PRODUCE MATERIALQUANTITY TAKE-OFF FOREACH SPECIFIC SCOPE
END-4-009B1
PROPOSAL ENGINEER(Planning & Scheduling)
EXTRACT INDIRECT MHRS &EQPT HOURS ANDFORMULATED BID
SCHEDULES,FORWARDINDIRECT HOURS TO BIDDEVELOPMENT MANAGER
BID DEVELOPMENTPROPOSAL MANAGER
CARRY OUT INDIRECTCOSTING & PREPARE
COMPREHENSIVECOMMERCIAL PROPOSAL
END-4-009D
END
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