IPA PES WORKSHEET - COST ACCOUNT DICTIONARY

(Cost and Quantity Definitions)

(Revised J une, 2012)
Summary Cost
versus Detail Cost
Accounts
Capital and
Expense

Special

Exclusions

Treatment of
Aggregated Cost
Items
reinstallation of removed items at other sites or on other projects
infrastructure costs such as labor camps in remote locations
plant maintenance equipment; shop tools, vehicles, etc.
license fees and royalties that are not a defacto payment for project definition and/or engineering and design work
(i.e. payment for a right, but provides no real benefit in terms of savings in project definition and/or design effort).
expatriate costs over and above labor rate/salary adjustments and typical travel and expense reimbursement
(e.g., purchase of a house, one-time incentive bonuses, etc)
plant mobile equipment and vehicles; railcars, trucks, cranes, mobile lifts, emergency vehicles, etc.
bulk purchases of spares for warehouse inventory
initial catalyst or filter charges or fill material
uninstalled spare parts; includes spare parts for the process other than bulk spares for warehouse inventory
which are excluded
demolition, disposal, removals and relocation; includes items demolished, moved for disposal or relocated within
the process area (excluding the reinstallation of items at process areas not included in the project)
working capital for initial inventory and work-in-process materials
unusual taxes, i.e. duty and VAT
unusual shipping; i.e. air freight or unusual ocean freight, shipping, forwarding or expediting, special packing or
crating, (normal overseas and domestic freight is included with Bulk Material or Equipment)
project definition costs incurred prior to initial project funding or opening of project accounts; these expenditures
should be estimated if not otherwise available from project or accounting records.
operations or plant personnel participation on the project; plant costs should be captured in the appropriate
category such as project definition, engineering, construction, startup or other applicable account.
software development, configuration, and programming for distributed control systems, PLC, etc. should be
captured in Detail Engineering or Startup (for debugging)
unimproved land purchases
process simulators
owners interest, finance, and tax costs (other than sales tax that are included in material billings)
environmental costs; includes incidental asbestos, lead paint removal, soil removal, clean-up, remediation,
monitoring, penalties, and permits (however, extraordinary environmental costs are excluded or treated as
separate projects)
post start-up (after plant is operable) commissioning and product accreditation
extraordinary site environmental clean-up and remediation efforts: includes items that go beyond normal
asbestos, soil removal and other site preparation task.
extraordinary site preparation; includes items such as mountain moving, island or harbor building, etc.
extraordinary support facilities; offices, labs, distribution, maintenance or other commercial type facilities intended
to serve other plants or a regional area rather than the project or local facility being evaluated (facilities in support
of the project are a normal part of OSBL).
There is one particular instance when costs can be aggregated. This is when equipment is field fabricated and/or assembled, but prevailing
industry practice is clearly to shop fabricate the item and ship the item to the site as an assembled package, or to have it installed on a turnkey
basis by the vendor or specialty subcontractor. Labor and material costs for field fabrication, assembly, and erection of such items should be
summed and included in the Equipment material category. However, when in doubt as to prevailing practice for an item, it is suggested that the
costs not be aggregated.
Often a project includes items whose costs are an aggregation of various cost accounts. Lump sum contracts are a common example.
Whenever possible, it is IPAs methodology to disaggregate the cost into their appropriate categories. It is understood that breaking the cost
down may involve uncertain assumptions and estimates. It generally prudent and beneficial (and at no cost) to request cost breakdowns from
contractors and vendors at the time of the original procurement.
IPAs PES methodology includes the collection of semi-detailed resourceinformation (cost, hours, and material quantities) for (1) prospective
project evaluations based on authorization/control estimates, and (2) project closeout evaluations based on actual results. Cost data at a
summary level alone is viable for most general benchmarking purposes, but summary data alone is not preferred except for early prospective
evaluations for which detailed cost estimates have not been prepared
IPA evaluates all costs that are directly associated with a project (with the exception of a few exclusions that are listed in the next section).
Project costs should be recorded whether they are treated as capital or expense. The following list highlights some costs that are commonly
expensed, but which should be captured:
There are other costs that are often expensed that should be captured in the Special category as described in the next section.
The following costs should be recorded in the Special category. The intent of segregating these costs is that they have less commonality in
occurrence and accounting practice, but are not extraordinary. Their effects on project resources and results are marginal.
On major multi-national projects there may be additional costs that should be captured in the Special category including:
The intent of exclusions is to remove from project evaluations the cost of unusual or extraordinary occurrences that if included in the project
costs would unduly or unfairly distort project analyses and benchmarks. For IPA evaluation purposes, all costs associated with the following
items should not be recorded as a part of the project:
Some costs should be excluded because they have their own unique characteristics as types of non-process projects (i.e., environmental work
or commercial construction). Consideration should be given to evaluating such work as separate projects.
ALLOWANCES VERSUS CONTINGENCY
Design Allowances
Material Takeoff
Allowances
Contingency

SUMMARY WORKSHEET COST CATEGORIES

Project Definition
Detailed
Engineering
Project
Management

A material takeoff allowance is an adjustment to quantity (rather than cost) that provides for: (a) the difference between takeoff quantities of
bulk commodities and final in-place quantities; and (b) fabrication waste. Material takeoff allowances are typically in the range of 5 to 15
percent. The material quantity entered in the worksheet should include any allowance added to derive final in-place quantities. However,
allowances for waste should not be included in the worksheet material quantities (worksheet only includes installed or in-place quantities).
Also, labor cost estimates should not be influenced by waste allowances. Takeoff allowances are not contingency and they should be included
in the labor and material costs as appropriate.
Contingency is the amount of money that experience has demonstrated must be added to an estimate to provide for uncertainties in: (a) the
level of project definition; and (b) the uncertainty associated with commercially unproven technology. It is normally (but not always) selected
such that the estimate including contingency has a 50 percent probability of overrun or underrun. Contingency is not intended to provide for
changes in the defined scope of a project (e.g., change in capacity or product slate) or for extraordinary circumstances beyond management's
control (e.g., 100-year storms, strikes against equipment vendors).
A design allowance is an adjustment to the estimated or quoted equipment cost that is necessitated by expected engineering revisions for
stability, stiffness, additional nozzles, nozzle rotation, placement of lifting lugs, etc. They are changes that are too insignificant to be listed
individually. Design allowances apply only to engineered equipment. Typical design allowances are in the range of 5 to 10 percent. Design
allowances are not contingency and they should be included in the material costs.
Project Management captures costs of the owner and/or contractor for overall home office supervision, administration, and control of the project
incurred after authorization and continuing up to, but not including startup. All project management costs incurred prior to authorization are
captured in Project Definition. Management costs for startup and commissioning planning and startup supervision incurred after authorization
and through startup are captured in Startup costs. Examples of functions and costs normally reported as Project Management:
engineering manager
included in the base estimate along with all other identified costs
not associated with any specific item of work
Contingency
This category collects costs for a project phase rather than a function. It covers all owner and contractor costs incurred during FEL 2 and FEL
3. These phases encompass the effort to establish the right project scope (selecting a project strategy that best addresses the identified
business opportunity), and to define a discrete project within that scope. Project Definition normally begins after a management gatereview,
when the business unit transitions the work to a small technically led team that works closely with the business unit to begin developing the
definition. While it is not uncommon for FEL 2 costs to be expensed at the earliest stages, they must be reported as Project Definition costs.
These initial team members usually become core team members responsible for the project. If competing business opportunities are still being
evaluated (normally an FEL 1 activity) after the gate review and technical transition, those business evaluation costs are captured as a part of
(an extra cost to) project
expected to be spent during the project
added to the base estimate
Early orders of material and equipment are reported as either Bulk Materials or Equipment (see definitions below). Also, construction pre-work
(i.e. preliminary site preparation or demolition) are reported to its appropriate construction accounts. However, costs for site surveys, soil
borings, and tests performed in support of project definition are captured in Project Definition.
If a license fee or royalty is paid in exchange for information or deliverables that materially support the project definition effort, that portion of the
fees should be charged to Project Definition. If that portion cannot be otherwise determined, the general rule is to charge one-half of the fee to
Project Definition, and exclude the remainder (unless it is for detailed engineering per the following).
Detailed Engineering captures costs of the owner and/or contractor for engineering, design, specification, and engineering support functions
incurred after project authorization and continuing up to, but not including start-up (including detail production design, field follow-up, software
development, and as-builts/close-out). Detailed Engineering normally begins after diagrammatic and general layout drawings are approved and
when detailed construction drawings begin. Detailed Engineering costs include (usually built into the charge rate) associated overhead and
profit including rents, phone bills, office supplies, CADD and computer charges, and engineering contractors fees/incentives that are not tied to
construction.
If a license fee or royalty is paid in exchange for information or deliverables that support the detailed engineering effort, that portion of the fees
should be charged to Detailed Engineering.
Allowances
associated with specific items of work
expected to be spent on that specific item of work
operations and maintenance representatives
project manager/leader
legal and administrative personnel and expenses
team building, reward, and reinforcement costs
contractor project manager
project engineers
business unit representative and investment analyst
home office project controls
project cost accounting
procurement/buyers/contracts administration
Allowances vs.
Contingency
travel and living expenses for PM functions
IPA project evaluations
Construction
Management

Equipment

construction management and supervisory personnel

Construction Management captures overall owner and/or contractor field construction management and supervision labor costs and
fees/incentives. This may include supervision performed by a CM, a general contractor, or the owner if they act in or oversee this role. The
construction management category is primarily staff labor costs and fees. CM excludes the cost for temporary facilities, construction equipment
rental, and other field indirect costs that are incurred by the CM, but are captured in the Other Construction-Related category. CM also excludes
lower tier subcontractor supervision and administration and direct craft labor supervision costs that are captured in the Construction Labor
account. Examples of functions normally reported as Construction Management:
field planning and field project control
tanks and bins (including field-erected tanks)
travel and living expenses for CM functions
general contractor supervisory personnel (not directly supervising craft labor)
construction management or general contractor fees and incentives
quality control and field inspection
Equipment costs are the uninstalled purchase or shop fabrication costs of engineered chemical, mechanical, electrical, and control equipment
and machinery items such as:
field safety program management
reactors, columns, pressure vessels, and drums
field office including clerical, timekeeping, payroll accounting, purchasing, & drafting
fire watch and security services
conveyors, vibrating screens, etc.
flares, incinerators
truck scales (mechanical and electrical items excluding deck and scale house construction)
drivers (motors, steam/gas turbines, diesel engines)
scrubbers and cyclones
crushers and ball mills
high voltage electrical transformers, switchgears for the main and secondary power distribution system including
motor control centers and variable frequency drives (but excluding local starters and switches)
unique, highly-engineered specialty valves (e.g., rotary valves, process splitters)
major instrumentation items associated with the central control system including DCS hardware, PLCs, and I/O
marshalling panel
primary emergency electrical generators (but not equipment-specific auxiliary generators).
heat exchangers and cooling towers
furnaces, boilers, combustors
casters
discrete process machinery (assembly pick and place, robotics, palletizers, etc.)
pumps
compressors
blowers and fans
mixers and agitators
Not included in Equipment costs are such items as:
The cost is the delivered price including normal overseas and domestic freight and sales tax (unusual crating and shipping, or VAT and related
charges are captured in Special costs). Note that the cost of installed spare items is included in Equipment cost. Uninstalled spares or spare
parts are captured in the Special category.
field instrumentation (Bulk Materials)
When equipment such as columns, furnaces, and tanks are field fabricated and/or assembled, but are predominately turn-key subcontracted or
shop fabricated in the industry, capture the total equivalent subcontract or shop fab price in the Equipment category. For example, labor and
material costs for a small 10,000 gallon storage tank fabricated or assembled in the field on a direct hire basis could be totaled and included as
an OSBL Equipment cost.
For packaged equipment that includes two or more equipment items mounted on a skid with interconnections already made, use the package
price. However, if the assemblage is an extensive engineered system with substantial piping and other bulk materials (i.e. an entire process
unit or production line), allocate the costs to the appropriate Detailed Engineering, Equipment, Construction Labor, and Bulk Material accounts.
Modular design is an example of a complete engineered system.
An equipment-related item to be accounted for in the "bulk material" category is long runs of heavy duct for intra-unit conveying of fumes and
gases significant distances to and from fired units such as furnaces, incinerators and boilers. This duct is typically fabricated from metal plate
by an equipment vendor (may be refractory lined). However, short runs of duct or duct manifolds at inlets and outlets or inter-unit connecting
pieces are accounted for as equipment. Note that sheet metal ductwork also goes in the bulk material account.
plant mobile equipment, vehicles, and maintenance items such as railcars, trucks, cranes, mobile lifts, emergency
vehicles, shop tools, etc. (Excluded)
non-process mechanical equipment such as elevators for people, bridge cranes for maintenance or catalyst
loading, hoists for lowering people into reactors, auxiliary emergency electric generators, and oil mist generators
(Bulk Material)
items that are essentially piping items, even though handled as engineered equipment, such as flame arresters,
small venturi scrubbers, finned pipe coolers, in line static mixers, etc. (Bulk Materials)
items not permanently installed such as catalyst loading hoppers, carts and dollies, portable platform scales, and
other process-related mobile items (Bulk Materials)
initial catalyst or filter charges (Special)
process simulators (Special)
DCS software programming and configuration (Detailed Engineering)
uninstalled spares or spare parts (Special)
valves other than engineered specialty valves (Bulk Materials)
steel loading and storage racks (Bulk Materials)
enclosures and hoods unless provided with and integral to the equipment function (Bulk Materials)
Intra-unit heavy duct for fumes and gases (Bulk Materials)
Bulk Materials

Construction
Labor
Lump-Sum
Contracts
Other Construction-
Related

Escalation and
Contingency
For new equipment, or equipment that was sent offsite for refurbishment, the equipment cost includes the cost of all internal elements (e.g.,
trays, tubing, refactory linings, etc) except initial fills (e.g., catalyst or filter charges that are charged to "Special"). Typically. internals are
bought on the same purchase order as the rest of the piece of equipment.
*Notes on Equipment Internals
painting, insulation, and fire-proofing
concrete
However, for onsite equipment refurbishment where the internal element being replaced is just one or a few major assemblies or parts (e.g., an
entire compressor roter, an entire transformer core, an entire heat exchanger core, etc.), the material cost of the internal element should still be
charged to "Equipment". These types of internals replacements tend to retain the cost characteristics of installing new equipment (i.e., lower
labor/material ratios).
Costs for all materials and components that do not qualify as Equipment. Examples of these items are:
piling and fill
However, for onsite refurbishment or replacement of the internals of existing installed equipment, the purchase of the internal elements or parts
should be accounted to "Bulk Materials" when those internals consist of many individual pieces. Examples include furnace retubing where
many tubes and parts are delivered for field installation, furnace and incinerator relinings that require the installation of refactory brick, or
retraying work where many trays, supports, and fittings are replaced. This reflects the fact that these types of refurbishments have costs with
characteristics similar to that of installing other bulk materials. For example, retubing work is somewhat similar to piping, refactory relining is
similar to unit masonry, and so on. This work has higher labor/material ratios than installation of new equipment.
piping
piperacks
non-specialty valves
structural steel
sheetmetal ductwork and intra-unit heavy duct
platforms, handrails, and ladders
The Lump-Sum Contract cost category should be used sparingly if at all. It is used as a last resort when there is no reasonable basis upon
which lump sum costs can be allocated to the component categories such as Detailed Engineering, Construction Labor, or Bulk Material. The
content of lump sum contracts may vary from a minor fencing subcontract to an entire lump sum EPC (engineer, procure, construct) contract.
site surveys, soil boring, and testing done after project authorization
electric wire
electrical conduit and cable trays
field instrumentation
material for marine facilities such as docks and jettys
Costs are the delivered price including normal overseas and domestic freight and sales tax (unusual crating and shipping, or VAT and related
charges are captured in Special costs).
Cost of field labor required to erect or install major equipment and bulk materials for both owner and contractor. Includes field indirects (other
than those provided by the CM which are captured in Other Construction-Related), payroll taxes, wage benefits, subcontractor overhead and
profit, bonds, insurance, incentive craft pay differentials and bonuses including overtime premium. Includes the cost for direct craft supervison.
The average hourly rate for construction labor including indirect costs is often referred to as an "all-in" or subcontract labor rate.
Other construction-related costs include field indirect items incurred by the owner, construction manager, and/or general contractor. It is not
intended to capture field indirects such as craft labor benefits, burdens, equipment rentals, minor scaffold, small tools and consumables, and
subcontractor overhead and profit that are normally included in the subcontractors all-in rates as captured in the Construction Labor account.
Typical items are:
CM, general contractor, and/or owner paid service and utility charges (for trash pickup, power, water, etc)
CM, general contractor, and/or owner field office expenses
CM, general contractor, and/or owner supplied site temporary facilities
These costs are only collected on prospective evaluations from estimates. There will be no escalation or contingency cost on completed
projects.
site material handling and warehouse
welder qualification
field reward and recognition events
major scaffolding
misc. permits
These two categories of costs are well defined throughout the industry. Escalation is meant to cover normal wage and price inflation from the
date of the estimate to the planned completion of the project. Escalation or contingency that has been rolled into individual line items should be
reported separately. For example, escalation included in major equipment costs should be removed and applied to the escalation category.
rentals and leases of shared major construction equipment such as cranes
general site cleanup
Contingency is the amount of money that experience has demonstrated must be added to an estimate to provide for uncertainties in: (a) the
level of project definition; and (b) the uncertainty associated with commercially-unproven technology and (c) other unforeseen developments
that are within the control of the project team. Examples of situations that are beyond the control of the project team include unusually severe
weather, labor strikes, acute material shortages, and catastrophes.
Startup
Special
DETAIL WORKSHEET COST CATEGORIES

IPAs PES methodology includes the collection of semi-detailed resourceinformation (cost, hours, and material quantities) for (1) prospective
project evaluations based on authorization/control estimates, and (2) project closeout evaluations based on actual results. Cost data at a
summary level alone is viable for most general benchmarking purposes, but summary data alone is not preferred except for early prospective
evaluations for which detailed cost estimates have not been prepared.
Some key points to remember when accounting for detail cost data:
field labor costs are assumed to include associated indirects, such as benefits and burdens, small tools, and
subcontractor overhead and profit (basically it captures all costs that are not material or construction management
related).
Startup costs include owner and/or contractor costs incurred between the end of construction and the start of normal operation, less estimated
standard costs (i.e., costs such as normal raw materials feedstock and operator labor that would have occurred during an equal period of
normal operation). Examples include costs for process testing, debugging, and operator training. Like Project Definition, this is a phasecost
account including costs incurred by all functions during that phase. For example, project management costs for supervision of the start-up
phase, as well as engineering support of the effort are included in Startup. In addition, post-authorization, but pre-startup, costs such as startup
planning and development of operating manuals are included in Startup. All startup costs should be included whether capitalized or expensed.
Some owners have an extended product accreditation period that is intended to assure that the product achieves a particular standard or
obtains regulatory approval. These post-startup costs, less standard costs, should be captured in the Special category.
If problems encountered during startup are due to improper design and/or installation, the repair or retrofit should be allocated to the
appropriate cost category above.
Refer to the text in the Introduction section.
material costs are assumed to include associated normal overseas and domestic sales tax and freight (however,
unusual shipping as well as VAT and duty, etc. are captured in Special).
contract costs, including lump sum, should be allocated to the appropriate discipline labor and material accounts.
cooling water or brine
steam
hours should include all labor hours spent on and charged to the job. Subcontract field craft supervision hours
should be allocated to the various construction discipline accounts on a prorated basis. If necessary, the hours
may be estimated based on typical all-inhourly labor rates.
Note that at the detail level, owner/contractor, and field ISBL/OSBL costs are captured separately.
inert gas
instrument air
material piles
general use tankage
2) Utility generation plant and distribution including environmental and waste disposal facilities
electrical power
flares and stacks
incinerators
3) Inter-plant process piping and conveyance
fuel
process water
fire protection systems
sanitary sewage and industrial drainage systems
site drainage collection systems
neutralizing ponds
lagoons and settling ponds
ground water monitoring
piping of process materials between batteries or to and from storage
docks
roads, parking lots, fencing, planting
maintenance shops
control building (non-dedicated)
guard stations
offices and laboratories
other conveyance of process material between batteries or to and from storage
warehouses
general site development
4) General Plant Services and Buildings
INSIDE BATTERY
LIMITS (ISBL) AND
OUTSIDE
BATTERY LIMITS
(OSBL)
ISBL is a term used in segregating direct from supporting investment. It can generally be defined as an imaginary line about any process that
encloses all the equipment and associated items dedicated to that processs sole use.
Generally, OSBL items are the facilities that serve, or are planned to serve, more than one process unit or area. Items that are normally
considered to be OSBL are as follows (a table in the data collection form asks that percentages of total OSBL costs be provided for each of
these categories):
1) Storage and Handling facilities
load out facilities
oil skimmers
PROJECT
DEFINITION
PROJECT
MANAGEMENT

Procurement and
Contract
Administration

ENGINEERING
AND DESIGN
Civil/Site
Structural
Architectural
Mechanical
Piping
includes costs for overall project manager and assistants as well as representation on the management team by functional or client
management:
ISBL and OSBL costs are collected separately only for construction because home office costs are generally not managed or segregated in this
manner.
The Project Management is broken down into the following discipline subaccounts:
What percent of Project Management and Engineering costs were expended through the Project Definition Phase?
This percentage is used by IPA to calculate the Project Definition costs from the Project Management and Engineering costs that are entered in
the detail worksheet as total costs for those functions. This approach recognizes that many owners allocate or estimate the costs incurred
during the definition phase and the percentage reduces the amount of detail data that needs to be collected and entered.
The detail cost form does not collect project definition phase cost the same way that the summary form does. There is no separate list of
discipline accounts for Project Definition at a detail level. Instead, a single question is asked:
In the detail cost form, Project Management costs include all the PM function costs from the start of project definition and continuing up to, but
not including startup. As mentioned in the previous section, the PM costs expended during Project Definition are calculated by IPA using the
percentage that is provided.
project engineers
client or owner representatives on project management team
administrative travel expenses
general administrative hardware or software purchases
general project clerical support
planning
scheduling
project cost accounting
includes all costs for engineering and design of piping systems including layouts, plans, equipment locations, isometrics, material specification
and control, and pipe stress engineering.
In the detail cost form, Engineering and Design costs include all engineering and design functional costs from the start of project definition and
continuing up to, but not including startup. As mentioned in the previous section, the engineering and design costs expended during project
definition are calculated by using the percentage provided.
general management consultants and specialists (not assigned to a listed discipline) including IPA
includes costs for materials and equipment buying, expediting, shop inspection and administration of supplier quality assurance, contract
negotiation, and administration. Excludes the specification of materials and equipment (Engineering and Design) and material control in the
field (Construction Management):
Engineering and Design is broken down into the following discipline subaccounts:
team reward and reinforcement expenses
includes costs that are not normally charged to the discipline accounts or included in labor overhead. These administrative indirect costs
include:
includes all costs for civil, geotechnical, marine or environmental engineering and design for grading, drainage, roads, rails, underground
utilities, site preparation, and fencing.
includes all costs for structural static and dynamic analysis and design of foundations, structures, and other related costs
includes all costs for architectural rendering, engineering and design such as building floor plans, exteriors, and interiors. It also includes
landscape architecture and interior design.
includes all costs for engineering and design of equipment and processes for HVAC, plumbing, fire protection, utilities, and non-process
material handling and conveyance (such as hoists, lifts, and elevators).
Project and
Engineering
Management
Misc. Project
Management
Services /
Expenses
Cost / Schedule /
Estimating /
Accounting /
Clerical
includes costs for project services such as cost engineering, project controls, estimating, and cost accounting. Services includes activities such
as:
There are two tests that often can be applied to distinguish between ISBL and OSBL facilities. They are: (1) dedication and (2) size. For
example, if a common utility such as a process air compressor is dedicated to a process unit, then it is an ISBL item. If, however, it is
purchased for the project but supplies compressed air into a common plant-wide distribution header, then it is an OSBL item. The sizing test
relates primarily to storage facilities. If a tank is sized to accommodate up to a day of production (or usage) for a unit, then it is considered an
ISBL item. Examples of ISBL tanks include accumulators and rundown tanks. If the storage facility can hold more than a day of production,
even if dedicated to the one unit, then it is generally an OSBL item unless there are other overriding considerations. Buildings may also be
either an ISBL or OSBL item depending on whether it is dedicated to the process.
construction, commissioning, fabrication, or other functional representative/manager on team
engineering manager
cost estimating
cost engineering
project manager
cost control
risk analysis
cost/schedule administrative support
Machine (or
Manufacturing)
Process
Chemical Process
Electrical
Instrumentation

CONSTRUCTION
INDIRECTS
Construction
Management
Construction
Equipment (by CM)
Temporary
Facilities, Services,
Utilities (by CM) -

CONSTRUCTION
Construction Equipment (by CM) - includes rental and servicing of construction equipment not normally obtained by individual subcontractors.
This typically includes major cranes. Rental and service charges and billings should be included in the materialcategory. This account rolls
into the Other Construction-Related cost category in the summary form.
includes costs of mobilizing, erecting, maintaining, and demobilizing overall, common site facilities and misc. services and utilities to support
the field subcontractors effort. If no record of labor for services (i.e., clean-up crews) is available, costs and billings can be charged to the
materialcategory. This account rolls into the Other Construction-Related cost category in the summary form. Includes items such as:
includes all costs for engineering and design of machine equipment and processes for non-chemical (dry) manufacturing type processes such
as discrete manufacturing and assembly, packaging, conveyance, and unit material handling. Process design includes flow diagrams and
P&IDs or equivalent.
includes all costs for engineering and design of chemical equipment and processes for chemical, hydrocarbon, metallurgical, specialty or other
type of (wet) processes (emphasis on reaction, heat transfer, and piping). Process design includes flow diagrams and P&IDs or equivalent.
document control and vault service
includes all costs for engineering and design of electrical power systems. Includes electrical power, lighting, MCCs, drive systems, substations,
heat trace, communications, fire alarms, and grounding. Design includes schematic one-lines, three lines, conduit, cable, and nameplate
schedules as well as physical plans and details.
includes all costs for engineering, design, and programming of process control, and plant information systems. Includes items such as control
hardware specification, field instrumentation, and control panels. Design includes schematic one-lines, loop, logic diagrams, indexes,
instrument lists, schedules, and instrument tubing, It also includes control panel layouts, plans and details.
includes all costs not chargeable to the disciplines above or allocated to office labor overhead such as:
The Construction heading encompasses costs that are part of Construction Labor, Bulk Material, and Equipment costs in the summary form.
Construction costs are collected separately for ISBL and OSBL work.
All-in or subcontract labor costs include indirects and associated overhead and profit including payroll taxes & benefits, overtime premiums,
small tools and misc. consumables allowance, bonds, insurance, and contractor fees. Equipment rental costs incurred by subcontractors is
included in labor cost. Labor includes field or on-site field fabrication labor (off-site fabrication labor is included in material costs).
temporary facilities (excludes labor camps charged to account below)
site clean-up and waste removal
temporary power and water
construction permits
special consultants such as safety, HAZOPS, CADD support, metals, corrosion, welding, coatings, or other value
adding specialists and consultants
general engineering computer software or hardware purchases
model shop
engineering/design travel to vendors and site
The Construction Indirect heading covers four discipline level accounts that are part of either Construction Management, Other Construction-
Related, or Special accounts at a summary level. Construction Indirect costs are broken down into the following subaccounts:
see the Summary Level Descriptions
field office rental and expenses
major scaffolding
site survey, soil boring and testing (after project authorization)
material warehousing
Construction costs are further broken down into the following discipline subaccounts:
Misc. Engineering
Services /
Expenses
Material costs include purchased, off-site fabricated bulk materials and equipment (including field fabricated tanks if predominately shop fabbed
in industry). Costs are the delivered price including normal overseas and domestic freight and sales tax. See the Summary Level for a more
detailed description of specific Equipment items.
Civil/Site

Concrete

Steel

Buildings

misc. improvements such as athletic courts, shelters, gazebos, guard shacks, and benches
drainage, sewerage, culverts, manholes, ponds, sumps (includes gravity drain piping not generally requiring pipe
fitters -- underground pressure piping is in piping)
rail sidings
includes preparing and improving the inside and outside battery limit plant areas and overall site for the process facility. Civil/Site includes:
structural beams, columns, joists, etc.
earthwork (general area or major structural excavation, backfill, and grading)
roadways, walks, parking, and guardrail
cast-in-place concrete excavation, forms, rebar, placing, and finishing
includes cast-in-place and precast concrete foundations and structural items. Concrete includes:
fencing and gates
landscaping
signage
piles, shoring, retaining walls
Buildings include:
includes costs for building construction. For the inside battery limits of large chemical and hydrocarbon plants, this will typically include smaller,
pre-engineered/fabricated buildings and sheds to house electrical, control, or other weather sensitive items. For batch chemical,
pharmaceutical, manufacturing, and similar plants, the entire process may be installed in a building that is integrated with and makes up a large
percentage of the ISBL project costs.
mechanical (including building equipment)
limited or incidental excavation for foundations, underground pipe, or underground conduit (often charged to
foundation, pipe, or electrical account)
sheet metal for duct and ventilation/exhaust enclosures and hoods (in process air)
Steel excludes:
pre-cast concrete structural items such as columns, beams, pipe supports, vault boxes, stairs, etc
penetrations, cutouts, and coring of concrete items
grouting of equipment or structural steel base plates
Concrete generally excludes incidental concrete items such as:
platforms, ladders, walkways, stairs, etc (including frame, grating, handrail.)
equipment, piping, conduit, and other major supports (excludes hangers and saddle supports)
pipe and conduit hangers (in piping or electrical accounts)
coatings (other than shop applied primers)
concrete encasement of underground conduit by electrical contractor (tunnels are in concrete)
thrust/kick blocks for underground piping
Civil/Site generally excludes:
extraordinary environmental restoration, decontamination, decommissioning, hazardous waste disposal, and
similar costs (generally excluded from project).
significant demolition and removals (see Specialaccount, including asbestos, lead paint, and contaminated soil
removal)
roofing
interior
conveyance (including bridge cranes, hoists, carts, etc.)
electrical
specialty items (dock lifts, bumpers, etc)
architect/design fees included in price of pre-engineered building packages
foundations
substructure
superstructure
exterior closure
includes steel structural items (and other structural materials such as FRP). Steel includes:
Equipment

Piping

Process Air

testing
shimming
ladders, stairs, platforms, enclosures, etc. attached directly to the equipment
handling and rigging
grouting
Piping generally excludes:
includes costs for aboveground and underground, shop and field fabricated piping. Labor for off-site shop fabrication is included with the
material price. Piping includes:
Another equipment-related item to be accounted for in the "bulks" category is long runs of heavy duct for intra-unit conveying of fumes and
gases signficant distances to and from fired units such as furnaces, incinerators and boilers. This duct is typically fabricated from metal plate by
an equipment vendor (may be refractory lined). However, short runs of duct such as duct manifolds at inlets and outlets or inter-unit connecting
pieces are accounted for as equipment. Note that sheet metal ductwork goes in the "process air" account.
Process Equipment excludes:
piping specialties and engineered items such as flame arrestors and drain hubs
valves (charge to piping, except specialty valves such as a solid handling gate valve, etc.)
DCS software programming and configuration (charge to process control engineering)
mobile equipment and items such as carts, dollies, boxes, luggers (charge to indirect/other or building accounts)
electrical and control equipment such as switchgear, MCCs, computers, PLCs, etc. (charged as material in the
electrical or instrumentation accounts as appropriate, except electrical motors are charged to Equipment)
process fans, blowers, exhausters, vacuum pumps, humidifiers, dehumidifiers (in equipment)
underground drainage and other non-pressure pipe (site)
erection and installation (including fittings and hangers)
testing
pipe support structures or sleepers (in steel or concrete account)
purchase and check-out of actuated control valves
insulation or coatings
fabrication of process related duct, plenums, enclosures and hoods
includes cost for sheetmetal work for process related duct and ventilation or sound enclosures and hoods. Process Air includes:
Process air generally excludes:
passivation
installation of in-line devices (louvers, dampers, coils, filters)
equipment purchase or fabrication including critical spares
includes costs to purchase, fabricate, and install chemical and machine process equipment (see the Electrical and Instrumentation
subaccounts for their respective equipmentitems). See the Summary Level descriptions for specific items. Equipment includes the following
material and labor components:
field installed insulation or coatings
setting
However, for onsite equipment refurbishment where the internal element is just one or a few major assemblies or parts (e.g., an entire
compressor roter, an entire transformer core, an entire heat exchanger core, etc.), the material cost of the internal element should still be
charged to "Equipment". These types of internals replacements tend to retain the cost characteristics of installing new equipment (i.e., lower
labor/material ratios).
non-process mechanical equipment such as bridge cranes, hoists, storage racks, scales, building AHUs, etc.
(charged to the building account).
Equipment - This includes the cost of all equipment purchases with the limited exception of the elements
catagorized as bulk materials as defined below.
Equipment material costs are further subdivided (i.e. sum will equal the total Equipment material dollars) into the
following categories:
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part of package)
fabricated; tanks, vessels, reactors, columns, silos, heaters, furnaces, boilers, heat exchangers, etc.
(include internals and attached ladders, etc.)
check-out (rotation etc.)
aligning
fabrication
Equipment material costs are further subdivided into two sub-categories:
Bulks - For onsite refurbishment or replacement of the internals of existing installed equipment, the purchase of
the internal elements or parts should be accounted here when those internals consist of many individual pieces.
Examples include furnace tubes when many tubes and parts are delivered for field installation, furnace and
incinerator refractory brick for relinings, or trays, supports, and fittings for column retraying. These items will be
mapped to "Bulk Materials" in the summary accounts because the cost characteristics (i.e., higher labor/material
ratios) of these types of refurbishments are similar to that of installing other bulk materials (e.g., retubing is similar
to piping, refractory relining is similar to unit masonry, etc).
excavation and thrust blocks for underground piping
instruments and control valves (charge to instrumentation)
enclosures and hoods unless provided with or integral with equipment (charge to buildings or process air)
erection and installation including hangers and saddle supports
piping valves and fittings
labor to install control valves (purchase and check-out in instrumentation account)
passivation and heat treating

purchase of process air coils, filters, louvers, dampers (in equipment)

HVAC for buildings (in buildings)
schedule pipe used for vacuum or pneumatic systems (spiral and round duct is in process air)
insulation, jacket, and coatings
Electrical

Instrumentation

Paint / Insulation /
Fireproofing

START-UP
SPECIAL
insulation and jacketing
building HVAC controls (in building)
DCS software programming and configuration (in process control engineering)
includes field surface preparation and coating or painting of concrete, steel, pipe, duct, conduit, and equipment. Also includes insulation and
jacketing of equipment, pipe, and duct. Includes:
surface preparation such as scraping, sand blasting, etching
raceway including conduit, tray, and wireway including hangers
pneumatic control tubing, fittings, valves, tube tray, and tubing supports downstream of main air header
(compressor is in equipment, instrument air headers are in piping)
instrumentation equipment - computers, DCS hardware, PCs, PLCs, MMI (interface) modules, etc. (this rolls into
the summary level Equipment category).
instrument air header piping
electrical equipment - switchgear, transformers, MCCs, etc. (this rolls into the summary level Equipment
category).
instrumentation and controls
Electrical excludes:
includes costs for purchase, fabrication and installation of instruments and process controls, both electrical and pneumatic. Instrumentation
includes:
bulk materials - all other material
motors (with equipment)
underground conduit encasement
major structural supports for equipment or raceway
building electrical such as lighting (in buildings)
structural fireproofing (cast-in-place concrete encasement may be charged to concrete)
painting
sealants, treatments, and coatings application
bus ducting
includes cost for all above and below ground, high and low voltage electrical work. Includes electrical equipment. Labor for off-site electrical
panel fabrications is included in material price. It should be noted that all conduit and wiring for instruments is included in the electrical
account. Electrical includes:
bulk materials - all other material
installation labor for control valves is in piping
grounding
instrument stands
refactory linings (in equipment)
communication and alarm devices and equipment
process lighting (general area building lighting in building account)
electrical motor drive control such as MCCs
The cost of electrical material is further segregated into:
local wiring devices such as switches and receptacles
motor drive control including motor control centers, starters, and disconnnects
lighting and power panels, boxes, and enclosures
electrical equipment such as switchgear and transformers
conductor installation and termination including wire, cable, and optical fiber (includes pulling and terminating
conductors for instruments)
electrical heat tracing
wiring and cable (in electrical)
purchase and fabrication of instrument and control panels including panel devices
control equipment such as computers and PLCs
instrument check-out and precalibration (final calibration is generally a commissioning item)
purchase and check-out of control valves
Instrumentation material is further segregated into:
Instrument excludes:
purchase and installation of instruments including field and panel mounted
wiring and devices in fabricated instrument and control panels and modules (usually included in material price for
the instrument panel)
Paint/Insulation/Fireproofing excludes:
poured or placed concrete slab toppings
see the Summary Level Descriptions
The following costs (that are often expensed) should be recorded in the Special category. The intent of segregating these costs is that they
have less commonality in occurrence and accounting practice, but are not extraordinary. Their effects on project resources and results are
marginal. Note: IPA costs are included in Project Management.
Special costs are further broken down into the following subaccounts:
painting and insulation of buildings and building mechanical items (in all-in building account)
paint and insulation integral to item as delivered to site (primer on steel, equipment insulation, etc)
electrical or steam tracing (in electrical or piping)

Catalyst and Other

Initial Fills
Uninstalled Spare
Parts
Demolition and
Removals

MATERIAL QUANTITIES
Concrete
Steel
Buildings
Equipment

electrical transformers, switchgears, MCC, etc. (panels or units sharing a common bus or shipped as a unit would
be one item)
major instrumentation items (e.g., control consoles, computers, major panels)
specialty valves (e.g., solids handling valves)
process simulators
owners interest, finance, and special tax costs (other than sales tax that are included in material billings)
total tonnage of structural steel; also include the weight of any FRP or other structural materials if used.
post start-up (after plant is operable) commissioning and product accreditation
total cubic yards of cast-in-place concrete; the volume of precast items and grouting are not included.
total square footage of buildings; measure the square footage of all usable floor space (include the area of each useable floor in multi-story
buildings, including subgrade floors). Measure the area from the outside of the exterior wall. Include the area of substantial mezzanines as well
as stair wells and service and elevator shafts. Excludes roof area and roof equipment supports except for enclosed penthouse area. Excludes
open awnings and covers.
each compressor and each installed spare
each blower and fan
each mixer and agitator
each tank and bin
each "package"
each heat exchanger and cooling tower
each reactor, column, pressure vessel, and drum
each conveyor, vibrating screen, etc.
each scrubber and cyclone
number of new pieces of equipment; the following are counted as one item each:
Other Special
Costs:
Duty, Unusual
Shipping,
Infrastructure
IPAs PES methodology includes the collection of all project resources including material quantities. The installed quantities should correspond to
the costs that were incurred (i.e., do not enter quantities for items that are not included in the corresponding cost account). If metric units are
entered, please make sure that you flag that fact as indicated on the form. All measures exclude material waste allowances and uninstalled
spares.
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monitoring, penalties, and permits (however, extraordinary environmental costs are excluded or treated as
separate projects)
However, if the demolition/removals work significantly effects or drives project schedule or turnaround duration (e.g., demolition/removal work is
on the critical path or it is "selective removals" that are intermingled with new installation and construction activities), and/or it significantly
effects office resource requirements (i.e., project definition, project management and engineering), then the cost of the work should be included
as part of construction (civil/site costs).
includes other items such as;
freight forwarder and special expeditingcosts and fees
labor camps and infrastructure support such as labor transport facilities
includes items demolished, moved for disposal or relocated within the process area (excluding the reinstallation of items at process areas not
included in the project). This assumes that the demolition/removals work is an adjunct part of the project scope that does not significantly effect
schedule (e.g., pre-turnaround work or site preparation done concurrently with planning or engineering to "clear the way") and does not
significantly effect office resource requirements.
unusual ocean or air freight/shipping (normal overseas and domestic freight is included with the cost of equipment
and bulk materials)
includes costs for items that are typically incurred on multi-national projects. Includes costs such as:
each crusher and ball mill
expatriate costs over and above labor rate/salary adjustments and typical travel and expense reimbursement
(e.g., purchase of a house, one-time incentive bonuses, etc)
duty and importation taxes
Value Added Tax (VAT)
includes catalysts, filter charges, and other initial equipment fills
includes uninstalled spare parts for the process other than bulk spares for general warehouse inventory which should be excluded from the
form
each furnace, boiler, and combustor
each pump and each installed spare

Piping
Process Air
Electrical
Instrumentation

CONSTRUCTION LABOR WAGES

Base Rates
Straight-time All-in
Rate
Premium All-in
Rate
linear feet of raceway installed; measured at the center line through fittings. Include conduit, tray, and wireway. Excludes bus duct and conduit
tunnels.
linear feet of pipe installed; measured at the center line through fittings and valves. Include pipe of all sizes as covered in the piping cost
account. Excludes gravity drain or non-pressure piping such as plastic, ductile iron, etc.
truck scales, loading racks
field instrumentation
drivers (motors, steam/gas turbines, diesel engines)
individual items furnished as part of a "package"
items not permanently installed such as catalyst loading hoppers, carts and dollies, portable platform scales,
spares, and other mobile equipment
non-process mechanical equipment such as elevators for people, bridge cranes for maintenance or catalyst
loading, hoists for lowering people into reactors, emergency electric generators, and oil mist generators
connected KVA; include the total KVA fed by the process power system. Includes loads from motors, heaters, and other process and electrical
equipment as shown on the one line diagrams.
total weight of pipe installed in pounds; weight for the pipe footage measured above.
instrument count; the total number of digital or analog measurement elements (pressure transmitters, analyzers, etc.) and final control elements
(solenoids, control valves, actuators, etc.) installed as part of a control system. Count package systems connected via a softlink as a single
instrument. Includes local, direct connected devices (i.e. gauges, etc.) as well as hardwired or tubed devices. Includes both electronic or
pneumatic devices. Excludes control or indicating devices and hardware (i.e., panels, PLC, panel switches and lights, etc.).
percentage of pipe of alloy composition; the approximate percentage of pipe that is of alloy composition (i.e., not carbon steel). Calculate on a
linear foot basis.
average inches diameter; calculate by multiplying the linear footage by the inches diameter for each pipe size, and then dividing the sum total
of all foot-inches by the total linear footage of pipe.
percentage shop fabricated; the approximate percentage of piping that is fabricated in an outside shop and delivered as spool pieces. Calculate
on a linear foot basis.
total weight of duct installed in pounds; include process air duct and similar sheet metal items. Include the weight of duct of alternate materials
such as PVC or FRP. Excludes flexible duct and general building HVAC ductwork.
do not double count devices that are hardwired to a PLC or field panel and then softlinked to another upstream
device.
local, direct connected devices like pressure gauges, dial thermometers, level glasses, etc.
I/O count excludes:
I/O count; the total number of electronic or pneumatic points installed as part of the control system. An I/O point is a directly connected input or
output device (i.e., analog, digital, or smart) that is actually wired to any control or indictating device (i.e., panel, PLC, etc.). Count points from a
package system that are connected via a softlink to a control device as a single I/O point.
spare points, even if they are wired to cabinets
Base rates are the total hourly earnings before payroll deductions, excluding premium pay for overtime and for work on weekends and
holidays, shift differentials, and non-production bonuses such as lump-sum payments provided in lieu of wage increases. Cost-of-living/
inflation adjustments are included in base wage rates.
Straight-time all-in rate is the base rate plus indirect labor, indirect material and other indirects (including small tools and miscellaneous
consumables allowance, bonds insurance, and contractor fees). Generally, all-in-labor costs and rates also include subcontractors equipment
rentals (e.g., welders) and scaffold rental. However, major equipment rentals, such as large cranes and major scaffold contracts, should not be
included.
This rate can be thought of as the base buying cost of labor; in other words, what would it cost per labor hour to get 1000 hours of straight time
work done.
Straight-time all-in rate plus overtime premiums, incentives and travel allowances.
process simulators
percentage of equipment of alloy composition; (i.e., that is not primarily carbon steel). When internals are normally alloy, but the casing or shell
is carbon steel, do not count this as alloy (e.g., a carbon steel pump with alloy seals). Use the cost of the equipment as the basis for this
percentage calculation.
Do not count the following items:
items that are essentially piping items, even though handled as engineered equipment, such as flame arresters,
small venturi scrubbers, finned pipe coolers, in line static mixers, etc.
valves (other than specialty valves)