Managing a pipe spool fabrication project from start to finish Page 1 of 5

Managing a pipe spool fabrication project from start to finish

thefabricator.com/article/tubepipefabrication/managing-a-pipe-spool-fabrication-project-from-start-to-finish

Anjlee Gupta Senior Specialist for Pipe Spool Fabrication Packages, Commercial Strategies Fluor Daniel India Private
Ltd. Infinity Tower B (6th Floor), Cyber City, DLF City Phase II, Gurgaon, Haryana, 122 002 India Phone: 91-124-457-
0700 http://www.fluor.com Contact via email More Content by Anjlee Gupta

Fulfilling a contract to fabricate and deliver pipe spools is never a small undertaking. Whether it’s
for the oil-and-gas industry, a power plant, a chemical processing plant, or some other capital
project, a pipe spool project generally comprises hundreds of components and thousands of
process steps. Every step is an opportunity for something to go wrong, so careful planning before
sending the request for quote (RFQ) to fabricators and careful monitoring and expediting of the
processes during fabrication help to contribute to a successful, timely, and profitable outcome.
Thorough planning, preparation, and scheduling early in the process are beneficial to the project
owner, the builder, and the pipe spool fabricator.

RFQ—PO—CO
The first question that arises is basic, but critical, and concerns the benchmark for bidding on the
RFQ. Should the job be measured in diameter-inch (DI) or tonnage? The answer depends on the
application.

For oil-and-gas refinery piping, DI is more practical because fabrication subcontractors are paid
by the DI they produce. Tonnage is a more appropriate measurement for power piping. Tonnage
doesn’t indicate the complexity of the job, such as the total number of welds or the number of
complex, time-consuming welds, so it’s not as accurate as DI. In a nutshell, the fabrication
capacity of a facility is best quantified in DI, whereas manufacturing, invoicing, and shipping are
suitably measured in tonnage.

An example of estimating DI for an actual project based on calculating the number of fitting welds
in the preliminary bill of materials supplied with the RFQ reveals that the DI calculation is
187,067.1 In this example, some welds are assumed to be field welds, but only shop welds are
counted for DI calculation.

• 2 in. and smaller DI: 42,473

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• 3 in. and larger DI: 144,594

• Total DI: 187,067

A DI estimation for the same project based on the fabricator using various random pipe lengths,
which requires additional shop welds to compensate for using odd lengths, produces a DI of
187,089.2

The actual DI after the fabricator processed the drawings came out to be 187,934, which
validated the calculation methodology.

Preparing a purchase order can be arduous, but thorough and comprehensive planning is
necessary for generating a complete and accurate RFQ. More work at the RFQ stage means less
work later in the form of change orders (COs). It also allows the fabricators to bid as accurately as
possible.

The RFQ should include a preliminary material take-off (MTO) and the approximate minimum DI
calculation, which give the fabricator a sense of the scope of the project. Also, the initial MTO
should indicate the percentage of the total MTO quantity. For example, if the initial MTO is
approximately 70 percent of the project, the MTO should state this.

The RFQ should instruct the fabricator to:

•Submit the fabrication quote in a dollar-per-unit weight rate and list any ancillary services
included in the rate. This should be separate per the materials of construction. This rate can be
benchmarked later by the engineering, procurement, and construction (EPC) contractor on the
basis of the DI-to-ton ratio.

Note that for refinery piping, the DI-per-metric-ton benchmark is 60. Fixed rates apply as long as
the ratio is less than 60. If the ratio is higher or lower than 60, the rate is rationalized in the same
percentage. If the client prefers to specify dollars per DI, a dollar per unit weight rate should be
added in a footnote to facilitate comparing bids among several fabricators.

• Include the stress relieving rate due to service requirements in the fabrication rate. The
fabrication rate may include stress relieving per ASME B 31.3, but most don’t include this
because of the service requirements—which can lead to a CO.
• State the radiography testing (RT) cost per weld, even if RT is already included in the
fabrication rate. This prevents negotiation of the RT cost if any additional RT becomes
necessary.
• Include spools without a welding requirement (loose spools) in the fabrication rate because
loose spools generally lead to COs, depending on the handling needed and the labor
involved.
• List the cost for pipe supports per unit weight, instead of per support, to capture economies
of scale. In other words, this method captures the lower cost per support associated with
large quantities of supports.
• Include painting rates, preferably by area, with a clear calculation of the surface area
methodology determined during the negotiation stage. This is best done with a software
package developed for this purpose.
• Include the stuffing and packing rate for frames or boxes per unit.
• State the costs associated with any possible air freight shipments. These rates are to be
per frame or box with the weight limit.
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• State the MTO (purchased by fabricator) unit rate and the free issued material (FIM) in the
cost per unit of weight, based on material. Even if the FIM is not present in the initial phase
of the project, any additional cost associated should be requested in the RFQ only.

The RFQ also should indicate the surplus disposal mechanism as part of the blanket purchase
order, with clear identification of options available to the fabricator and the EPC contractor.

If the EPC contractor is in the final stages of engineering the project, a lump-sum contract with
fabricator could be a better way to prevent any COs.

Engineering, Documentation, and Execution

Fabricated spools usually are needed at the site as scheduled by the construction work package
(CWP) or the engineering work package (EWP). However, the if the drawings are not issued all at
once for a single CWP or EWP, this incomplete package can become a fabrication constraint.
This is because the fabrication schedule is based on other schedules, such as material delivery
dates and drawing completion by the EPC contractor.

If the isometric drawings and material are given the right priority, the fabrication schedule can be
accelerated, which can turn into a win-win for the client and the fabricator. Note that, because the
fabrication shop’s capacity is usually analyzed in DI, the drawings must be material-matched for
the shop per DI capacity. The DI calculation is done only on shop drawings and not in the EPC
contractor drawings because it is based on shop welds.

To strike a good balance between materials and drawings, the EPC contractor must provide
accurate and timely MTOs with sufficient contingency plans. Also, because the material quantity
is vast, procurement timing is critical in the fabrication schedule.

To match the drawings that have been approved and released to the fabricator to the material
available in the fabricator’s inventory, Fluor uses proprietary software in which material is
allocated to the drawings per the required at-site date for the spools. This helps to ensure a
continuous workflow in the fabrication shop and prevents using valuable shop time to fabricate
low-priority components ahead of high-priority components. Using a picking-ticket process is a
good method for this: The ticket gives the fabricator permission to pick only the material for
drawings that have been issued, ensuring that each item issued to the shop floor is a priority item
and each spool that comes out of shop is a priority spool.

Another aspect is drawing revision. Fabrication usually starts shortly after the issue for
construction of isometric drawings, which ideally should be issued after a 60 percent model
review. However, in many projects, the drawings are issued after just a 30 percent model review,
leading to substantial revision rates, which affects the fabrication cycle. It’s a matter of speed
versus cost. Issuing the drawings sooner, after reviewing 30 percent, accelerates the fabrication
schedule but entails the risk of greater cost in the form of change orders and rework. An analysis
by the EPC contractor, one that compares the schedule to the cost, is a big help in cost reduction.

Finally, after a drawing is released to the shop floor, revisions should be made after the affected
spool has left the fabrication shop (at site). This is to prevent interrupting the fabrication shop’s
workflow and any subsequent back-charges by the fabricator.

Mitigating Quality Concerns

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Flange parallelism remains a big challenge for many fabricators and a substantial cause for
rework. Automated welding by submerged arc welding is effective for maintaining flange
parallelism, but it usually isn’t applicable on spools less than 6 inches in diameter or 9.5
millimeters thick. To maintain parallelism on diameters less than 6 in., fixtures can help prevent
distortion from the welding heat. When socket welding, performing welds from both sides can help
to prevent distortion.

Flange serration damage is another major quality concern during fabrication, often caused by
mishandling. Such damage can be repaired by machining by the fabricator in accordance with
ASME B 16.5, but this is an expensive and time-consuming option. Using flange protectors to
prevent damage is generally more cost-effective.

Whenever material is issued to the shop floor, requirements for postweld heat treatment,
hydrotesting, welds to be left unpainted, nondestructive testing, and other particulars must be
clearly stated. Also, it is better to have all requirements shown on EPC contractor isometric
drawing labels so that the details are captured directly in shop drawings.

Another quality concern is the weld repair rate and the measurement indicator for weld repair. It
can be measured by spot or joint, although measuring by joint tends to give a more accurate
picture, although both are used by fabricators. A weld repair rate of less than 3 percent (by joint)
is considered good enough, but uniform preheat for every joint, especially when cold or humid
weather can affect the welding process, is necessary to achieve that. Preheating prevents
cracking caused by differential thermal expansion and drives off any moisture. Also, it slows the
cooling rate of the deposited weld metal.

Manufacturer’s record books (MRBs) are the final client deliverable. As many critical documents
as possible should accompany the spools when they leave the fabricator’s facility to reduce any
paperwork confusion later.

Mitigating Packing and Logistics Concerns

Shortages and overages generally occur because of last-minute exclusions or inclusion of spools
in containers that are not captured on the packing lists. This creates a discrepancy between the
material receiving report at the site and the packing lists. Last-minute changes must be included
in the packing lists, and the lists must be double-checked for accuracy.

• Careful planning is necessary when packing and shipping CWP items, which go to the work
site for installation, and EWP items, which go to a modular yard for assembly before
delivery to the work site. Planning the grouping and packaging of these items when the
material is issued to the shop floor helps to keep the work site organized. In one recent
Fluor project, proper planning and component segregation accelerated the schedule by two
months, resulting in a huge cost reduction.
• Using rollers beneath the container frame helps to ensure that the container floor doesn’t
get damaged during shipment.
• Transport by air requires more handling than transport by ship; thicker blockings with tighter
packing can help to prevent handling damage.
• For sequential packing, the packing supervisor should refer to the spool list so that the
largest, heaviest spools are loaded first and smaller, lighter spools go on top of them.

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Projects that require over-dimension consignment packing, rather than standard 40-foot
containers, warrant additional precautions. Close attention to packing, lashing, crane handling,
and placement can help to prevent damage.

Also, invoicing on weights provided by the fabricator can be a concern. Instead, the EPC
contractor should provide previously approved weights for MTO items after the PO is issued to
the fabricator.

A Review of the Overview

While it’s impossible to account for every pound of material, hour of work, and dollar expended on
a construction project, it’s necessary to estimate as closely as possible and to keep the waste to

a minimum. Attention to detail from everyone involved—project owner, construction company,

and fabricator—helps to minimize mistakes, rework, and waste. Using standard measures, clear
and complete documentation, and a work process that assigns priorities appropriately will
contribute to a well-planned, smooth-running, and successful project.

References:

1. Available upon request

2. Available upon request

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