The start-up plan developed during this phase includes supplier and operations staffing requirements, materials planning,
final definition of success criteria, and a schedule for the commissioning, qualification, and verification (CQV) phases of the
start-up. These activities require lots of planning and coordination among the stakeholders to be successful.
Often, the FEL III phase will provide fewer opportunities
for cost savings since the basic project scope has already been
established, and a relatively well-developed design is only being
further refined. Any savings in this phase is more likely to be
related to risk reduction that comes with increased definition.
Major design alternatives should have been vetted during FEL
II. Nevertheless, FEL III can still wring significant costs from the
One area of opportunity for cost savings at this stage is in
the development of the construction strategy. An example of
this came up recently in a food plant project which required
the complete demolition and replacement of an upper level
concrete floor—with minimal impact on operations. The engineering team, in conjunction with the contractor, developed
a strategy to implement suspended truss forms which did not
require support posts from below. The forms could be relocated to install the new floor one bay at a time, with little to no
interference to the existing plant operations on the lower levels. This solution avoided the removal of process equipment
that would provide the shoring support required by a more typical forming approach. By figuring out the construction strategy during the FEL III phase of the project and including all the
appropriate stakeholders, the owner avoided approximately
one month of production down time.
Implementing the FEL process throughout capital appropriation and into a project control budget (+/- 10%) may require
35%–50% of the overall engineering budget. While hardly an
insignificant commitment, this figure ensures that the owner,
contractors, vendors, and suppliers all have the information
necessary for good planning, estimating, and project execution.
In the processing industries, engineering design typically
accounts for 7%–15% of the total project value, depending on
a wide variety of factors. For example, assuming a project forecast at $8 million with approximately 10% for professional services, the total fee would be around $800k. If the FEL process
required an investment of 40% of that amount, that would be
$320k, or just 4% of the overall project value. In fact, the FEL
process is typically identified as 2%–5% of the typical project’s
total installed costs.
On the other hand, poorly defined engineering, scope
omissions, incomplete estimating, unplanned downtime, and
extended start-ups can quickly and easily account for 3% of the
total installed cost. For this reason, following the FEL process
becomes a low risk and cost effective approach.
In fact, using the FEL process can benefit a project by lowering the overall cost—often by as much as the costs of executing the FEL process itself.
According to a 2009 survey whose results were published
in the CII Best Practices Guide: Improving Project Performance
[ 2], owners using front-end planning spend on average 8% less
than owners who never or infrequently use this method. This
result is quite significant when expressed in terms of a large
company’s annual capital plan.
A separate study of front-end planning benefits conducted
by Research Team 213 of the Construction Industry Institute
reviewed a sample of 609 projects with a projected total value
of $37 billion. The analysis indicated that proper use of front-end planning resulted in 10% less total cost, 7% shorter delivery
periods, and 5% fewer changes.
Jens Ebert is a senior project manager and senior associate at
SSOE Group. Jens has over 26 years of experience in the field
of consulting engineering for clients in the food/beverage,
industrial, nutraceutical, and defense sectors. Many projects
have included developing new and unique technologies and
products for the market. Jens can be reached in SSOE’s St. Paul,
Minnesota (USA) office at + 1. 651.726.7672 or by email at