Headline:

£300 million worth of contracts completed on time
Delay costs averaging £1.5 million avoided

Background:

A prominent petro – chemical producer employed a construction company to undertake refinery, storage and product transfer construction work across a number of sites.
The construction company upon completion and set-up of each discrete installation was charged with handing over the project to client operations using a ‘walk down’ process, designed to facilitate efficient sign off.
This involved representatives from both sides agreeing completion to contracted standards.
The contractor frequently allocated resource to other projects when they considered the work complete and before ‘walk down’ was concluded to the satisfaction of client operations.
This led to major contractual disputes and delays in problem rectification.
Substantial delays in payment to the contractor resulting from incomplete or unsatisfactory work were also commonplace.
The situation was soon escalated to very senior levels in both operations with valuable time and resource on both sides diverted to non productive activity.

Action:

A consultant was appointed to diagnose the root cause of the problem and what was required in order to bring about timely project completion to the agreed standard.
It soon became apparent that there was no clear understanding on either side at ‘walk down’ level as to what exactly was required according to the contract delivery specification. Individuals and groups formed their own opinions based upon poorly communicated and incomplete information.
Deliverables had not been translated into an accurate working checklist with time frames and there was no objective scoring system for work evaluation.
In short, no one at delivery level had a clear vision of what was required or how they were to be judged against the contractual agreement.
To address the situation, the following summary actions (involving both contractor and client operations) were taken:

Result:

Over £300 million of construction contracts were subsequently completed on time and to precise specification.
Delay costs averaging £1.5 million per contract (evidenced by earlier contract performance) were avoided through the adoption of the above measures.