Project Management Institute

Power to the people

PMI 2011 PROJECT OF THE YEAR AWARD FINALIST

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from left, Charles Lyda, Ram Seshadri, PMP, James Brown, PMP, Clinton W. Smith, PMP

BY KEVIN ALLEN // PHOTO BY JEFF AMBERG

After being shut down for more than three decades, the prospects for actually building a new power plant in Central Texas, USA looked bleak.

In the mid-1970s, Luminant (then called TXU Corp.) approved projects to build power plants at two sites, Twin Oaks and Forest Grove, with each to deliver more than 800 megawatts of power.

Not long after the company approved construction of the two plants, the projects were deferred because of a reduction in the demand for new power.

In 2005, though, Luminant decided it was time to resurrect the efforts. The company tapped consulting giant Fluor in April 2006 to handle engineering, procurement, construction and commissioning.

The team decided to combine the two projects onto the Twin Oaks site, because site preparation, including construction of the power plant's foundation, had already been started there. The equipment at the Forest Grove site was moved over to be used for a two-unit site at Twin Oaks, renamed Oak Grove Steam Electric Station.

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A FRESH LOOK AT AN OLD PROJECT

Fluor rebaselined the project, holding several meetings with Luminant to ensure expectations were aligned.

“We worked on detailing the scope of work and the items that the client wanted within that scope of work,” says Ram Seshadri, PMP, project coordinator at Fluor in Greenville, South Carolina, USA. “Then we determined the cost estimate openly with the client, so they had a lot of confidence that we had put together an estimate in tune with the scope of work that they signed up for.”

To ensure team members had a common understanding of project objectives, roles and responsibilities, key activities, performance goals and potential risks, the companies conducted a final alignment session in April 2007.

The project scope included the construction of:

  • Two supercritical boilers
  • Two steam turbine generators
  • An air-quality control system
  • Two 420-foot (128-meter) chimneys
  • An ash landfill, removal and disposal system
  • A lignite coal receiving and handling system
  • A substation
  • A lake cooling facility
  • A distributive control system

Softening the Blow

“Oftentimes during projects, you hear people say that it's very hard to communicate bad news up to management and to the client,” says Ram Seshadri, PMP, Fluor, Greenville, South Carolina, USA. “On this project, we took a very open, collaborative approach. We decided that if there are going to be issues, then we're going to inform our client and all of our senior management on a very timely basis.”

In one instance, absorbers in the gas desulphurization system cracked and failed, bringing commissioning activities to a complete stop.

The Fluor team explained the issue to the project owner, Luminant, and sought a timely solution.

“The client dug into its organization and was able to bring in technical experts who had a lot of knowledge within this particular area,” Mr. Seshadri says.

The project team worked with the supplier to come up with an interim design fix. The commissioning team kept the schedule moving forward with a guarantee of performance and delivery of the final product within six months.

“The impact on the project from that issue was minimal,” he says. “Inform the stakeholders, client and senior management in a timely fashion, no matter how bad the news is going to be. It really serves your project better.”

“When we started off with Oak Grove, it was the proverbial question, ‘How do you eat an elephant?’ And the answer was, ‘One small piece at a time,’” Mr. Seshadri says. “We used that philosophy to develop our work breakdown structure for the project. We divided it into two main areas of expertise: engineering and construction.”

Fluor subdivided the work among its offices in Greenville, China and India. The company split the construction portion of the project into procurement, construction and commissioning.

“By subdividing the work breakdown structure into these areas, it helped us realize what the scope of the project was, who was going to execute the work and where it was going to be executed,” Mr. Seshadri says.

NOT JUST ANY OLD THING

One obstacle was obvious right from the start: The team was dealing with old equipment.

“We had to go in and do a current assessment of that 30-year-old equipment,” explains James Brown, PMP, director of engineering at Fluor, Greenville, South Carolina, USA. “What kind of shape is it in? How can we ensure that it's going to be ready for performance when we put it into operation?”

He and his team compared the codes and standards in place at the time the equipment was built to current ones to determine which modifications and restorations were needed to make the equipment usable.

A shifting regulatory landscape added complexity.

“There was a significant increase in the environmental controls requirements and restrictions placed on the facility throughout the project life cycle,” Mr. Brown says. “It had to incorporate the most technologically sound state-of-the-art equipment.”

Rather than investing in new equipment, the team refurbished the stored materials from the original projects.

“We took the necessary controls for pollution-distributed control systems and incorporated those into that 30-year-old equipment,” he adds.

3,000+
The number of people who worked on the project

850,000
The average number of Central Texas, USA homes the Oak Grove plant can power

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Fluor conducted
17
risk-management sessions

during the project, identifying 114 major risks.

THE MIDDLE OF NOWHERE

The project site's remote location made it tough to recruit qualified team members. Oak Grove sits 150 miles (241 kilometers) northwest of Houston and 135 miles (217 kilometers) south of Dallas, Texas.

“We're out in the middle of land that has a lot of cattle and so forth, so you're quite far from any kind of workforce,” says Clinton W. Smith, PMP, Greenville, South Carolina, USA-based vice president of solid-fueled projects in Fluor's power group.

Further complicating the search, much of the local talent pool was diverted to cleanup efforts along the Gulf Coast in the wake of Hurricane Katrina, causing the human resources group to aggressively pursue staff outside of the region.

Fluor used the results of a labor survey conducted in the area in May 2006 to determine the level of salary, benefits and incentives it would take to attract workers while staying within budget.

Community outreach efforts helped address the question of whether there would be enough accommodations for the more than 3,000 employees who worked on the project throughout its life cycle. Per-diem incentives were provided to workers willing to commute from College Station (a 45-minute drive away) and Waco (over an hour and a half away).

Fluor used its risk-management framework to identify risks to labor and equipment throughout the project, from the proposal stage to the end of the project warranty phase. The team updated the framework on a quarterly basis and shared the results with senior management.

All told, Fluor conducted 17 risk-management sessions during the project, identifying 114 major risks. Each was ranked on a scale of 1 (low) to 5 (very high), and was assigned to an individual whose responsibility was to ensure a mitigation strategy was employed.

The chimney contractor's availability was one of the more severe risks. The company was in high demand and found it difficult to commit to a deadline. Fluor was working with the contractor on several projects at the time and leveraged its relationship to convince the contractor to send its best resources to the Oak Grove project. The Fluor team also worked with the client to obtain approval for a different chimney liner than specified, which sped up the process.

“Soliciting that particular subcontractor early gave rise to firming up its quotes and the needs of the project in order to meet the aggressive schedule,” Mr. Smith says.

STANDARD OPERATING PROCEDURE

Fluor takes a two-pronged approach to ensuring that project management standards are followed.

“One is through people,” Mr. Seshadri says. “Our power group consistently provides project management training and communication to all our members.”

The second is using the organization's project management manual, which is regularly updated. “We look at how consistent our tools and our processes are with the standard, which is A Guide to the Project Management Body of Knowledge (PMBOK® Guide)” he says.

Fluor encourages its employees to earn the PMI Project Management Professional (PMP)® credential. During the Oak Grove project, 16 team members did so.

12
million

The number of hours completed safely and without environmental incident

“Having a PMP® credential helped individuals see the broader view of the project and understand what kinds of deliverables they needed to provide to the other groups to be successful,” Mr. Brown says.

The commissioning team, led by Charles Lyda, made sure that the appropriate resources from all vendors were available to start up the power plant. Mr. Lyda and his team members engaged the client early in the project to ease the turnover process.

The project was completed within its budget of US$1.92 billion and two weeks ahead of schedule.

During the execution phase, management aggressively challenged all milestone dates and motivated team members to do the same. To accomplish this, three-week look-ahead meetings were established that reviewed key construction, engineering and management personnel.

The team constantly reworked its one-page schedule overview with red and green milestone tracking to communicate schedule statuses, and material or technical problems. In one case, team members met daily with stakeholders to update progress on a troublesome steam turbine generator.

“We did a very good job of analyzing the schedule and communicating all of the statuses to the major stakeholders,” Mr. Seshadri says. “This helped them make timely decisions on the project, which eventually helped us deliver it two weeks ahead of schedule.” PM

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Watch videos of the Project of the Year winner and finalists on PMI's YouTube channel.

Learn more about PMI's Professional Awards (and nominate a Project of the Year candidate) at pmi.org/awards.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK JANUARY 2012 WWW.PMI.ORG
JANUARY 2012 PM NETWORK

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