3 Foundational Pillars of PMC Role
Amongst the varied functional resposibilities of the project management consultant role, within the scope of Oil & Gas sector, here are what I would call 3 foundational pillars of PMC Role, and it is applicable to Technical core, to Project management roleslike planning, contract management, procurement and project control too.
They are:
Management, Administration and Control of all the above 3 core aspects form the basis of PMC decision making and executive actions with Company.
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The Flow diagram above, shows the functional flows of these principles between Parent Oil Company, Contract and Contractor and how they interact with the PMC in regard to the 3 core responsibilities. The base contract document itself is the agreement upon which all transactions between Company & Contractor takes place- and PMC stands as a guidepost for control and guidance to Company, on every aspect of this Contract. As is evident, Contractor (in this diagram-EPC) is wholly responsible for Engineering, Procurement & Construction of the Project, and its battery limits as per Contract. However, when it comes to Compliance, Cost and Schedule of the project, the PMC role is crucial in contract administration and as an advisor to Company, in every discipline-Technical and every management aspect as well.
Compliance that PMC is to ensure- is towards the Core Technical FEED documentation, as well as Codes and Standards, Company Policies & Procedures, International Standards & practices outlined within the Contract documents. This could be a broad application to ensure technical correctness or a detailed zoom in view into project specific application also- Compliance therefore, requires PMC to be project specific, rather than being pedantic in insistence of compliance or insistence of minor semantics of interpretation of codes and standards. And why does PMC need to exercise such a discernment of what is applied- to what and when and where? Here is there the next two points of PMC role come in.
Cost & Schedule are also core responsibilities of PMC role. Bare or blind insistence on compliance, could lead to unnecessary stretch of schedule or uncontrolled increase of costs associated with an insisted compliance. This is where an experience of PMC really shows up in practical terms. Controlling technical compliance, without compromise on cost and schedule of the project and only where necessary for safety, technical integrity and within the operational parameters of the plant- as required by the Contract. If additional Cost and Schedule are mandated in order to accomplish this via compliance, Company must step in and have closed door interactions with PMC, to brainstorm the whys and how-tos of this- before proceeding for implementation with Contractor.
A Contract is formed within the bounds of a fixed Cost Estimate and Project Schedule for implementation- and when awarded to Contractor for implementation and PMC to stand as a guardian of that Contract- makes it vital for the PMC to stay focused on core responsibilities at all time- Variance of any part of Contract or Compliance thereof in strictest of measures, is a call that has to be taken on a case to case basis and is not a blank cheque to exercise authority without a reasonable measure of control- knowing that all executive decision by PMC has direct bearing on the outcome of contract execution in terms of Cost and Schedule, not to mention associated Risks.
Risk management within an EPC Contract, for example, is very much part of Contractor's responsibility, however administration and exercise of risk control is part of PMC responsibility also. In Risk management, PMC and EPC Contractor - both become advisors to Company on Cost and Schedule impacts associated- especially when it comes to the current global situation of Supply Chain Disruption with regard to COVID situations which are always unpredictable around the globe- which affect Procurement and Delivery of Materials. If the Goods supplied as part of Contract are a Complex Package like a Gas Compressor Package- which has multiple sub items associated, therefore, more aspects of supply chain and sub-vendor orders etc associated in procurement, the Risks involved in delays become even more amplified. Within Risk Managament, Contractor should involve the PMC more closely, as a second opinion in all doubtful matters, since PMC already has a role in maintaining the same in the interests of the project- although this is seen less in practical terms, probably because there is lack of understanding in industry of what the core roles of PMC are to begin with.