Conformity Assessment as a Tool for Organizational Learning in Large Engineering and Construction Projects

Luciano Assalim,Maria Fatima Ludovico Almeida

doi:10.4067/s0718-27242013000300059

Abstract

For the successful realization of large engineering and construction projects (LECPs), a systemic organizational learning framework for institutional cooperation is critical. Due to the long project life-cycle of LECPs, this is particularly important for this kind of project. The objective of this paper is to analyze to what extent the conformity assessment of LECPs, carried out under Engineering, Procurement and Construction management (EPCm) services, can be used as a tool for organizational learning and cooperation between typical stakeholders (project owners, engineering contractors, EPC contractors; subcontractors and certification bodies). The research, from which this paper emanates, was based on a case study concerning LECPs in an oil and gas company in Brazil. Based on its results, we suggest that the proposed organizational learning framework, supported by the conformity assessment rationale, constitutes an important management tool that can be disseminated in other organizational contexts where conformity assessments of LECPs take place.

Highlights

IntroductionBy 2030 non-OECD energy consumption will be 69% above the 2010 level, with growth averaging 2.7% p.a. (or 1.6% p.a. per capita), and it accounts for 65% of world consumption (BP, 2012)
By 2030 non-OECD energy consumption will be 69% above the 2010 level, with growth averaging 2.7% p.a., and it accounts for 65% of world consumption (BP, 2012)
Their lifecycle from beginning to the end of execution is typically longer than six years and large sum is spending on a single megaproject.The industry statistics report that more than 65% of these large engineering and construction projects (LECPs) are failing to meet their contract goals which can bring all sorts of problems to an organization

Summary

Introduction

By 2030 non-OECD energy consumption will be 69% above the 2010 level, with growth averaging 2.7% p.a. (or 1.6% p.a. per capita), and it accounts for 65% of world consumption (BP, 2012). Large engineering and construction projects (LECPs) for new processing facilities in the oil and gas industry are technically complex, encompassing the integration of many different technical disciplines on the basis of a large codified body of knowledge.The technical complexity can be better illustrated by the high level of technical availability (typically over 95%) during the lifetime of the facility (typically 20–25 years).This places high demands on the quality of the technical development and implementation process to achieve the required functionality Their lifecycle from beginning to the end of execution is typically longer than six years and large sum is spending on a single megaproject.The industry statistics report that more than 65% of these LECPs are failing to meet their contract goals which can bring all sorts of problems to an organization. The risks on LECPs are high mainly due to: (i) the large investment yields no revenue until after implementation; (ii) the facility is indivisible with limited possibilities to reduce exposure through breaking up the scope of work; (iii) transferring the facility to another location is generally not feasible with limited options for redeployment of equipment; and (iv) development and implementation times are long, typically 2–3 years and 3–5 years, respectively (Berends, 2007)

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