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ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 27 September - PowerPoint PPT Presentation

ECRI Sponsors Meeting Hilton Kensington Hotel London Day 2 Thursday 7 th June 2018 WELCOME ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 27 September 2006 1 Session 1 Welcome, Safety Moment, New Introductions, Moment


  1. ECRI Sponsors Meeting Hilton Kensington Hotel – London Day 2 – Thursday 7 th June 2018 WELCOME ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 27 September 2006 1

  2. Session – 1 Welcome, Safety Moment, New Introductions, Moment & Review of Agenda Rod Kyle, ECRI ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 2

  3. Session 1 – Safety Moment John Ruckert, Vice President, Operations ECRI ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 3

  4. Session 1 – Safety Moment HEARING LOSS PREVENTION ➢ Noise is the most common cause of hearing loss ➢ One Third of hearing loss is preventable ➢ Examples of sound levels: ➢ City traffic noise – 80 db ➢ Lawn mowers and motorcycles – 90 db ➢ Wood shop and stereo headphones – 100 db ➢ Loud bass in cars (when other cars feel / hear it) – 120 db ➢ Rock concert and firecrackers – 140 db ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 4

  5. Session 1 – Safety Moment ➢ How loud is too loud: ➢ You can’t hear someone 3 feet away ➢ You have pain in your ears after leaving a noisy area ➢ You hear ringing or buzzing immediately after leaving a noisy area ➢ You hear people talking but can’t understand them ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 5

  6. Session 1 – Safety Moment ➢ Prevention ➢ Eliminate or reduce the noise level ➢ When noise cannot be reduced – use protection ➢ Limit the amount of time around the noise ➢ Increase your distance from the source of noise ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 6

  7. Programme – Thursday 7 th June 2018 Session Time Description Discussion Leader 08.00 - 08.30 Registration / Refreshments 1. 08.30 - 08.40 Welcome, Safety Moment, New Introductions and Rod Kyle / John Review of Agenda Ruckert Keynote Address: “ Procurement Drives Value ” -- 2. 08.40 - 09.40 Paul Gibbs, Managing Director - UK, Bechtel 09.40 - 10.00 Tea / Coffee Break “ Cost Reimbursable? Not so Fast… ” -- Andrew 3. 10.00 - 11.00 Rhodes, President, The Rhodes Group “ Contracting Trends ” -- Mark Job, Partner, 4. 11.00 -12.00 Pinsent Masons LLP “ SIG Meeting – Key Takeaways” -- John Ruckert 5. 12.00 -12.50 , Vice President Operations, ECRI “ Any Other Business / Wrap - Up and Close ” 6. 12.50 -13.00 Rod Kyle 13.00 -14.00 Lunch 14.00 End of Day 2 Session / Departure ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 7

  8. Session – 2 Procurement Drives Value Paul Gibbs, Managing Director, UK Bechtel ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 8

  9. ECRI Sponsors Meeting 09.40 – 10.00 Coming Up – Sessions 3, 4, 5 & 6 ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 9

  10. Session – 3 Cost Reimbursable? Not so Fast….. Andrew Rhodes President The Rhodes Group ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 10

  11. Session – 4 Contracting Trends Mark Job Partner, Transactional Construction & Energy Pinsent Masons LLP ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 11

  12. Session – 5 SIG Meeting – Key Takeaways John Ruckert Vice President, Operations ECRI ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 12

  13. SIG Meeting – Key Takeaways Seven (7) Core Work Fronts and Strategic Initiatives as Focus Areas: Secondary Stakeholder Engagement Client / Industry Outreach Website & Data Bank Risk Based Review / Audit Special Secondary Interest Data Bank Groups Education & Training Programme Best Practices ECRI ECRI ENGINEE RING & CONST CO CONSTRUCTION STRU RUCTI CTION RISK INSTITUT E

  14. SIG Meeting – Key Takeaways Seven (7) Core Work Fronts and Strategic Initiatives as Focus Areas: Secondary Stakeholder Engagement Client / Industry Outreach Website & Data Bank Risk Based Review / Audit Secondary Special Data Bank Interest Groups Education & Training Programme Best Practices ECRI ECRI ENGINEE RING & CONST CO CONSTRUCTION STRU RUCTI CTION RISK INSTITUT E

  15. SIG Meeting – Key Takeaways SPECIAL INTEREST GROUPS (“SIG”) – OVERVIEW ➢ Established In 2010 to facilitate more informal discussions of common and emerging risk issues among ECRI Sponsors in a similar sector of the E&C industry ➢ Existing SIGs are: Mega Projects; Development, Civil Building, Power & Infrastructure Projects and Offshore Oil & Gas ➢ Members with a common interest can address their specific issues rather than trying to deal with all matters within one meeting involving all of the Sponsors of ECRI ➢ Important issues identified in SIG meetings are often slated for presentations at Sponsors Meetings and development of ECRI Best Practices ➢ Excellent Feedback from Sponsors regarding usefulness and value-added by SIG concept ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 15

  16. SIG Meeting – Key Takeaways THE BACKDROP New geographies More difficult clients New type clients Larger projects Trends in T&Cs Skill / expertise leaving ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 16

  17. SIG Meeting – Key Takeaways THE BACKDROP New geographies More difficult clients New type clients Larger projects Trends in T&Cs Skill / expertise leaving >>>converging risks? ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 17

  18. SIG Meeting – Key Takeaways Knowledge Transfer and Resource Retention ➢ Step Change in Experience Loss ➢ Not a transitional process ➢ Losing to clients, retirement and consultants ➢ Lasting impact of market downturn ➢ Industry image – not green ➢ Less traditional focus on “career” ➢ Resources needed for Mega Projects ➢ Mitigation ➢ Employee engagement ➢ Improve E&C marketing ➢ “Invest” for the future ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 18

  19. SIG Meeting – Key Takeaways Trends in Contract Terms ➢ Elevated Risk Profile ➢ Proposals – “no exceptions” to terms ➢ Reimbursable Work with LS Contract T & C’s ➢ Consequential damages – Waivers // Carve-outs ➢ LD caps increasing ➢ Overall limits of liability increasing ➢ Extended payment terms (use of contractor’s cash) ➢ Change Order terms – “must execute” ➢ Penalties for removing key people - excessive #s ( e.g. 70 ) ➢ ….. ➢ Far East Contractors more willing to accept ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 19

  20. SIG Meeting – Key Takeaways Operational Risks ➢ Owner Movement of Risk to Contractors ➢ Accept results of FEED performed by others ➢ Subsurface risks contractor’s responsibility ➢ Procurement mindset by owner – no value placed on quality, safety, schedule certainty ➢ Ownership of schedule float ➢ Accept risk of inflation ➢ Accept responsibility for evolving technology ➢ No longer true that party best able to bear the risk de facto does ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 20

  21. SIG Meeting – Key Takeaways Risk Trends in PPP Projects ➢ Owner Movement of Risk to Contractors ➢ $$ penalties in addition to LDs ➢ Counterparty indemnifications, e.g. revenue loss from related party to contractor ➢ SPV pushing terms to EPC contractor not at the table ➢ Administrative penalty framework during the design-build phase on P3s ➢ Selection of JV partner critical ➢ Unique skill sets are needed for successful JV operations ➢ Partner selection based upon commercial and scope considerations often skimps on due diligence resulting in project execution problems ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 21

  22. SIG Meeting – Key Takeaways SIG Meetings – London 2018 ➢ Development, Civil, Buildings, Power and Infrastructure ➢ 7 th June (14.30hrs – 17.30hrs) ➢ Gunnell Room ➢ Offshore Oil and Gas ➢ 8 th June (08.00hrs – 12.45hrs) ➢ Chelsea Room ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 22

  23. Session – 6 Day 2 Any Other Business / Wrap – Up and Close Rod Kyle, ECRI ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 23

  24. Session 6 – Day 2 Meeting Wrap-Up and Close ➢ After written Approvals, today’s Material will be posted on the ECRI private website ➢ Next Sponsors Meeting will be in Houston, TX, USA -- Venue : Hilton Houston Post Oak -- Welcome Reception: Tuesday 4 th December ‘18 -- Sponsors Meeting: Wed. / Thurs. – 5 th . Dec and 6 th . Dec ’18 -- Dinner: Wednesday 5 th December ‘18 – Masraffs Restaurant ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 24

  25. Session 6 – Day 2 Meeting Wrap-Up and Close ➢ Other Meeting Dates : -- Next ECRI Board Mtg., Houston, Tuesday 4 th Dec ‘18 -- Next SIG Mega Projects Mtg., Houston in October ‘18 with Date / Venue TBC -- Next Development, Civil, Power, and Infrastructure SIG Mtg., Thursday 6 th December‘18 -- Next Oil & Gas SIG Mtg., Friday 7 th December ‘18 -- Regional E & C Risk Courses / Master Classes will be given for Sponsor Groups in the Americas, Europe. Possibly India and Far East /APAC. ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E 25

  26. Thank You for Attending At ECRI – We are raising the Bar in Risk Management THANK YOU ECRI ENGINEE RING & CONSTRUCTION RISK INSTITUT E

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