The CII Model Plant

This report is an introduction to the Construction Industry Institute (CII) Model Plant Project. The Model Plant is a typical facility physical baseline against which to measure construction productivity.

A need for an industry-wide construction productivity measurement baseline has been recognized for a number of years. Construction productivity data for nationwide use is either not available or considered unreliable. The Business Roundtable Construction Industry Cost Effectiveness (CICE) Project Report A-1, “Measuring Productivity in Construction,” included a recommendation to measure site-level productivity in selected private construction segments. The report suggested a logical segment scheme based on construction volume.

The CII Productivity Measurements Task Force also proposed the establishment of industry standard baseline construction labor estimates for logical segments of the industry. With consideration of the demographics of the CII membership, a large percentage of which is heavily involved in the petrochemical industry, a petrochemical facility has been chosen as the initial physical base against which to measure productivity. Data from collection of direct labor estimates for a “typical” petrochemical processing facility have been chosen as the foundation of the baseline; hence, the name “Model Plant.”

Future plans include developing similar model projects for other segments of the industry.

The Model Plant represents a petrochemical process plant that costs in the range of $75–85 million to construct. It consists of nine areas, including a fractionation unit, tank farm, compressor unit, two turbine generators, underground piping, pipe bridge, and others. Material takeoffs defining the labor scope of work have been performed from design documents that were supplied by several CII member companies. A code of accounts has been established for the various scopes of work at a detail and summary level. Contractors and owners, based on actual experience, have estimated the amount of construction labor that would be required to build selected parts of the Model Plant. These estimates form a “Baseline One.” Estimates in the future for the identical scopes of work will be performed at one to two-year intervals and compared to “Baseline One.”

A tremendous amount of effort has been exerted over the years toward identifying construction “standards” or common measurements. The variables are vast in number and have seemed elusive and nearly insurmountable. The code of accounts established for the Model Plant could serve as a standard index to existing codes of accounts, simplifying comparison of project performance within the petrochemical industry.

In addition to its use as a standard for productivity measurement, the CII Model Plant is intended to provide a point of reference for other construction research activities. As examples, it can be used as a base for impacts of constructability or technology innovation, or used as a demonstration example for new concepts or ideas.

Two sets of estimates have actually been made. The first set of estimates was essentially a “de-bugging” exercise. As a result of the study of the second set of estimates prepared by five of the original ten participants, the following conclusions can be drawn:

• Excessive variation that existed in the first bids has been eliminated in the second estimates.
• Bidders have carefully prepared the second estimates using the material takeoff. Variations in work-hour rates between areas are a result of other factors included in the material takeoff that affect direct labor estimates, such as embeds and backfill for concrete, or fittings and valves for piping.
• No bidder is consistently high or low in a single cost code or major activity between areas.
• An owner could save 11 percent in direct labor hours by employing multiple contracts to construct a plant. These savings would be offset by additional management costs and the payment of mobilization costs for several contractors. The possibility of claims increases as well with multiple contracts.