EPCO - DESALINATION

Engineering Procurement Construction Operation & Maintenance

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INTRODUCTION
and Roe is a full service engineering, procurement, construction, operation, maintenance, and project management firm headquartered in Oradell, New Jersey. We have provided these services to power and desalination customers throughout the world, to both private and public clients, for more than seven decades. Our experience in the power industry has led to the completion of over 170 fossil-fueled generating units totaling over 70,000 MW. Since the early 1960s, Burns and Roe has been involved in the engineering, development, construction, operation, and maintenance of plants utilizing both the seawater distillation and membrane desalination processes.
Burns and Roe's specialists are experienced in virtually all known technologies in the desalination field. Our engineers and our staff have designed, constructed, operated, and maintained the following types of desalination plants: Reverse osmosis, nanofiltration, ultrafiltration, and microfiltration plants Multiple stage flash, multiple effect vertical and horizontal tube evaporators Dual-purpose electric power and seawater conversion plants Electrodialysis plants Mobile test units and pilot plant equipment. Through our wealth of qualified personnel, expertise in private project development, and diverse experience base, Burns and Roe has the capabilities to provide the full services of engineering, procurement, construction, operation, and maintenance for a wide range of desalination plant projects.

Burns

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PROJECT MANAGEMENT Burns and Roe capably manages complex Engineering,

Procurement, Construction, Operation, and Maintenance (EPCO), turnkey, and design-build programs. Whether the program is executed on a lump sum, reimbursable, or performance driven-fee basis, we meet our customers needs by working together as a team. Our management principles that are applied on desalting plant projects include: Compliance with Fair Labor Standards for project employees, including an active labor relations program Compliance with all applicable Environmental Limitations and Standards Compliance with all pertinent Engineering Standards and Codes Ensuring that safe and reliable equipment and systems are provided Cost and Schedule Control Property Control Performance Quality Providing a safe workplace Complete and accurate reporting to management and the client Quick reaction to abrupt changes in requirements Willingness to undertake any new scope or work additions Absolute cooperation with the Owner to achieve the Owners objectives As shown in the Project Management Organization chart below, the organizational structure has been designed to function effectively in satisfying the requirements of the project, to promote performance quality, and to enable effective interfaces within the organization and with the client. Note that organization charts for the Construction Management and the Operations and M&O are provided subsequently along with the appropriate discussions.

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ENGINEERING
General Information Project Management and Control Requirements Site Requirements Environmental Requirements Operational Requirements Quality Assurance/Quality Control Requirements Project Description Mechanical Technical Requirements Electrical Technical Requirements Instrumentation and Control Technical Requirements Civil/Structural/Architectural Technical Requirements Construction Requirements Start-up and Training Requirements Guarantees and Performance Testing Requirements Long-Term Maintenance Agreement Drawings Bid Data Forms Appendices Drawings Site Plan Plot Plan General Arrangements Process Flow Diagrams Overall Key One-Line Diagrams Site Survey Geotechnical Report Environmental Impact Assessment Report Site Conditions Seawater Analysis Material Balances Project Milestone Schedule

EPCO Contractor will normally proceed with engineering and design based on the information provided in the Request for Proposal (RFP). The Owner normally provides the RFP that includes the following data: Site Topographic Survey Geotechnical Report (including an analysis of soil bearing capacity and foundation type) Environmental Impact Assessment Report (including environmental design requirements) Site Conditions (including design meteorological information.) Feedwater Analysis (seawater or brackish water) Source of Feedwater (seawater or brackish water) Existing Intake (if any) Special Design Codes and Standards Technical Specification Bid Documents for EPCO Contractors. In the event that the EPCO Contractor will have to prepare the RFP for the Owner, Burns and Roe, as an EPCO Contractor, is prepared to undertake the whole desalination water project package from start to completion. The first Phase of the project is to develop an EPCO Technical Specification for the RFP that includes the following:

The

The Environmental Impact Assessment Report is necessary for obtaining the environmental permits and the licenses required for plant construction and operation.

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Once the project definition has been reviewed and approved by the Owner's Engineer, the bulk of the engineering activities will take place. It involves the preparation of detailed drawings and specifications, procurement of equipment, studies and analyes, and establishment of project schedules and cost estimates. Computer design will be utilized for the 2-dimensional and 3-dimensional piping and equipment general arrangements, civil/ structural, foundations, and site layout. Other

computer applications will also be utilized for piping and instrumentation diagrams, process flow diagrams, and electrical oneline diagrams. All low and high pressure piping, equipment, large storage tanks, electrical, instruments, civil/ structural, pressure vessels, and heat transfer equipment for the thermal plant will conform to the latest editions of standard codes for design such as ASME, ANSI, ASTM, TEMA, HEI, AWS, AISC, NEMA, IEEE, ISA, and/or their equivalents.

Computer programs are utilized by the Piping Engineer for piping stress analysis, pipe sizing, and weight calculations. Feedwater analyses for scaling potential and optimum plant design for pre-treatment and desalting will be investigated to provide the lowest operating costs. In addition to optimum plant design, plant reliability will also be a major factor for plant design consideration.

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PROCUREMENT The Burns and Roe Procurement Plan includes a

detailed system for procurement of equipment, materials, construction, and the services required for performance of the project. This plan describes procedures for selecting suppliers and subcontractors, processing procurement documents, evaluating proposals, establishing selection criteria for Purchase Order/Contract Award, and postaward administrative activities, including processing change orders. A schedule for the major procurement of equipment, materials, construction, and services will be developed at the start of the project and will be supported by the Centralized Procurement Team. An essential element of the Procurement Plan is the incorporation of a contracting strategy, which identifies and schedules the portions of the work that will be performed by suppliers and subcontractors and which defines the method(s) of contracting to be utilized, whether lump sum, cost plus, or unit price. The procurement process generally involves first the bidder's list, then is followed by the RFPs, evaluations, negotiations and award, contract change orders and modifications, expediting and hold points, and, finally, material control (at the construction site). Each of these procurement processes is discussed in detail in the subsections that follow. Results of technical, quality, and commercial surveys conducted either via questionnaires or audits.

2. Requests for Proposals

Requests for Proposals for equipment, construction, materials, and services are issued using Standard Bid Packages as much as practicable, soliciting proposals from multiple prequalified sources to ensure full and free competition to the maximum extent possible. Bid Packages and technical specifications contain milestone schedule requirements for delivery of equipment and performance of the work. Inspection hold points are also identified and shipping releases are indicated as required, when deemed necessary. Delivery dates are established in consideration of the Construction Critical Path requirements.

3. Evaluations, Negotiations, and Award

Technical and commercial evaluations and negotiations are conducted, leading to the final selection of Vendors and Subcontractors. Upon opening of the proposals, a complete review of the technical, management, cost, and commercial elements, including exceptions, is performed and a comparable bid abstract is completed. As a result of these reviews, negotiations may be conducted, as necessary, with all responsive bidders in the competitive range. At the completion of negotiations, best and final offers may be solicited. Upon selection of the successful bidder, a recommendation for Purchase Order/ Contract Award will be sent to the Project Manager approval, followed by issuance of the Purchase Order/Contract.

1. Bidder's List
A prequalified suppliers and subcontractors list will be prepared that identifies their special capabilities, volume limitations (if any), and the geographical areas in which they work. The following factors will be considered in developing the Bidders List: Preference factors Corporate familiarity with the bidder References received Financial and other data available from the organization

4. Contract Change Orders and Modifications

Any changes that affect technical or quality requirements, quantity, price, or required delivery/completion are processed in accordance with the Corporate Procurement Procedure for Contract Change Orders and Modifications.

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or a written authorization to proceed past the hold point without surveillance has been issued.

6. Material Control
All material receiving is performed by the Burns and Roe Construction Management Organization. Material Receiving Reports (MRRs) will be used to document the receiving activities for materials, equipment, and supplies. Upon receipt, items will be immediately inspected for shipping damage prior to unloading. Once unloaded, the items will be placed in a special receiving area for additional inspection, when applicable. While in the receiving area, containers will be opened and items inspected for correct quantity description per the procurement documents. All nonconforming items will remain in a hold area until all discrepancies noted during the receiving inspection are resolved. Once accepted, items will be properly marked, protected, and placed in a designated storage area until released for incorporation into the work. Designated storage areas will normally comprise to the following four areas: Environmentally Controlled Storage Areas Indoor Storage Areas Outdoor Storage Areas Hazardous Materials Storage Areas

Burns and Roe will act to limit the occurrence and magnitude of changes by assuring that subcontractors perform in accordance with and within the limits of the Purchase Order/ Contract. Revised contract requirements may be implemented immediately by using a change order or proposal pricing, and/or schedule impact requested in accordance with the "Changes" clause of the Purchase Order/Contract. Change Order pricing is based on the labor rates, unit prices, and mark up percentages obtained during the competitive or negotiated bid process.

5. Expediting and Hold Points

Expediting actions commence upon issuance of subcontracts and purchase orders and continue through contract completion. These actions include expediting of all contracts, deliverables, including initial installation and fabrication drawings, required documentation, and equipment. Vendor release will be used as written authorization permitting the vendor to ship equipment or to proceed past a hold point. Hold points will be determined by Engineering and/or Quality Assurance based on their analysis of the equipment's functional use. Hold points are vendor activities, such as witnessing factory testing in-process or final acceptance testing, beyond which work cannot continue until the test has been witnessed by the designated Burns and Roe representative

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CONSTRUCTION The construction effort of the project normally consists

of three distinct phases: the Pre-Construction Planning Phase, followed by the Construction Phase, and finally the Post-Construction Completion Phase. Constructional review and analysis to evaluate methods and sequence of construction intended to reduce erection and installation times Biddability reviews to evaluate contract plans and specifications Review drawings and specifications to determine actual versus intended design and to ensure constructibility Develop comprehensive material and labor estimates to establish project baseline costs Prepare a detailed work breakdown structure defining all principal areas of activities and projected costs Establish the schedule based on the: - Level at which the work is manageable - Importance of the level of work to the overall project - Visibility required for management and control Conduct preconstruction meetings with the clients representatives to familiarize them with the specific project requirements Establish project work rules and working conditions in conformance with appropriate local labor practices Develop a manual establishing the procedures to assure a safe, timely, and costeffective project Prepare organization and flow charts showing communication and reporting networks Develop a checklist of information to be prepared and disseminated Discuss the construction plan with the clients representatives, including such factors as permits/licensing, coordination of work, desired operational dates, cash flow considerations, etc. Develop a Quality Assurance/Quality Control (QA/QC) plan to set standards based on which the quality of work will be measured and controlled. The plan recognizes the impacts on schedule and costeffectiveness and balances these with the project's intent and the clients requirements Inspect and evaluate plant installation and construction equipment, materials, and supplies

1. Pre-Construction Planning Phase

During the Pre-Construction Planning Phase, the Site Construction Manager and his/her staff conduct the following reviews and perform the indicated tasks while formulating the project plan:

2. Construction Phase During the Construction Phase, the Construction Manager and Site Construction Manager organize the construction team that consists of the Chief Resident Engineer, Construction Supervisors, Finance and Administration Manager, Logistics Manager, Plant Equipment Manager, Start-up and
Commissioning Engineer, Safety Officer, Planning and Cost Control Engineer, and Quality Assurance Engineer. This staff is customized and streamlined to meet the specific needs of the client and the project.

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With the pre-construction plan having already been put into action, the construction site management staff, as shown on the Construction Management Organization chart below, performs the following functions: The Site Construction Manager, as the leader of the site construction team, manages and supervises site activities. He coordinates with the client to meet client requirements and undertakes responsiblity for all construction activities and progress reporting. The Chief Resident Engineer reviews the work in

progress to assure conformance with the drawings and design specifications, schedules any necessary technical coordination among related works, and he/she manages the field construction operation and construction engineering for field-erected equipment, as well as the planning and control of construction schedule and cost. The Chief Resident Engineer also prepares detailed schedules to set the baseline for determining progress in the field. Meetings are held throughout the Construction Phase to monitor the actual progress against these schedules. The Planning and Cost Control Engineer implements and uses the Construction Management System (CMS) to monitor and analyze construction progress. The CMS utilizes the WBS as its baseline information source. source. In the WBS, all of the work is broken down into discrete, visible, and measurable elements. The WBS is the fundamental information source upon which all planning/ scheduling and cost control activities are based. Each contract includes a standard commercial section that identifies and describes the method to be used to measure progress and to implement payment control.

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Another important feature of the CMS is to track quantities installed in such a manner that schedule problems can be identified promptly. A cost control and project accounting system is established which provides data on original costs for each contract, change orders, anticipated final costs, and a comparison to the original budget. Anticipated cash flow is forecast biweekly. All change order requests are documented and evaluated for validity and pricing. Cost accounting records are maintained in accordance with client requirements. The Quality Assurance Engineer continually performs inspections and surveillance throughout construction with the results and required actions published. All the work that is not in compliance with either the specifications or QA/QC Plan is not accepted and is not included as work of earned value. All nonconforming work is corrected at the earliest appropriate time and reinspected prior to acceptance. The Finance & Administration Manager coordinates all of the finance activities between the head office and the job site. He is also responsible for the job site accounting activities, for maintaining good public and labor relations, and for ensuring an adequate supply of laborers. The Logistics Manager is responsible for all of the plant equipment to be installed and for its storage and material control. He/she is also responsible for the storage, control, expediting, procurement, and delivery of other materials related to the plant equipment and the project construction schedule. The Plant Equipment Manager is responsible for all plant construction equipment, materials, and tools, and for its storage and material control. He/she is also responsible for expediting and delivery, return of equipment, and procurement and/or rental of other equipment and materials related to the plant construction equipment and the project construction schedule.

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Prior to the acceptance of the construction of the project as complete, a final inspection of all of the facilities and systems is conducted to assure compliance with the contract requirements. As construction is completed on systems/ segments of the project, start-up services, under the direction of the Start-up & Commissioning Engineer, bring the equipment and systems to an operational level prior to a performance test for a specified period before final acceptance. Review and process all final payments and ensure receipt of all lien release certificates. A summary of project expenditures is compiled and assistance is provided in fulfilling any client-required audits and certifications. All project files, manuals, as-built drawings, permits, warranties, and other documentation required is inventoried and provided to the client.

The Safety Officer is responsible for the safety and health of the construction management staff and all of the construction workers and the protection of all property on or near the construction site. The Start-up & Commissioning Engineer is responsible for developing the start-up and testing of Standard Operation Procedures (SOPs), for the operation criteria of all of the plant equipment and systems and for commissioning of the plant. He/she is also responsible for directing the required testing once the Site Construction Manager determines that the equipment and systems are ready to be tested.

3. Post Construction Phase

The Post-Construction Phase involves acceptance, activation, financial closeout and documentation.

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OPERATION AND MAINTENANCE Immediately after the construction is completed, the

O&M of a new plant and/or taking over a plant normally consists of phase-in and recruiting, operation, training, maintenance, and warehousing. As shown in the Operation and Maintenance Organization chart, the organizational structure, which includes administration and finance, operation, maintenance, and warehouse divisions, has been designed to function effectively while providing reliable operations that are maintained on a continuous basis, 24 hours per day, 7 days per week. The main activities in taking over a new plant include the following: Management and Administration Recruiting of personnel, office space and requirements, finance and purchasing systems, reports, plans, forms, and other documentation, standard operating procedures, licenses, and permits. Engineering (home office support) Standards of operation for plant start-up and testing, review and approve reports, water laboratory checks, laboratory protocol, asbuilt construction drawings, development and testing programs, and interface with construction contractor.

1. Phase-in activities
During phase-in a host of plans and procedures will be initiated to ensure completion during the early period of the contract effort. The phase-in team will comprise the key personnel including the Site O&M Manager supported by home office specialists who will assist in installing the project administration system, conducting inventory, and preparing preliminary plans and other documentation. The Site O&M Manager is normally the leader of the phase-in team and will have total responsibility for the phase-in process. The following are phase-in activities for each of the O&M divisions:

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capital replacement costs Equipment life is maximized The safety of all personnel and equipment is assured Full compliance is achieved for all applicable environmental regulations Operating procedures, which include start-up, normal operations, and shutdown, will be prepared for each system of the plant. These procedures will take into account system operating limits; system and equipment sequencing; individual equipment limitations; manufacturers' operating instructions; effects on other and by other connected systems; operator work load limitations; failure analysis; and safety actions. After the overall procedures are written, operator procedures for each individual operating position will be prepared, as will the log data sheets relating to that position. The general 3-step approach overview to start-up includes checkout tests, pre-start-up tests, and start-up and operating adjustments, as described below. The purpose for Step 1, Checkout Tests, is to assure that the systems will be able to operate in a safe and efficient manner, without harm to operating personnel or damage to equipment. Initial start-up will consist of a dry run, followed by a water test run of the pretreatment train individual components.

Operation Interview staff candidates, start-up procedures, standard operating procedures and reports, support equipment, technical library, supplies, furniture, and tools. Maintenance Interview staff candidates, maintenance programs, standard operating procedures and reports, support equipment, technical library supplies, furniture, and tools. Warehouse Warehouse/storage facilities, custodian duties, pre-contract inventory, interview staff candidates, support equipment, technical library, supplies, furniture, and tools.

2. Operation Activities
During the operation phase, the approach to plant operation includes the following objectives: Establish the plant process and equipment development goals Accomplish all production and performance targets and requirements, such as water quality and production goals Reliable operations are maintained on a continuous basis, 24 hours per day, 7 days per week, 365 days per year Maximum economy is achieved, including labor, materials, and energy costs, as well as

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If deficiencies are found in any pretreatment train components, modification will be made before further tasks are accomplished. (RO) plant start-up will be accomplished using pretreated feed water. During the start-up test, the hydraulics of the system will be evaluated, including pumps and valves. The sensors and applicable control loops will be evaluated and initial membrane performance (flux rate and product quality) will be measured and documented. Any membrane element defects or installation deficiencies will be replaced and/or corrected before further testing is accomplished. After the RO plant is brought on-line, flushing and cleaning systems will be evaluated. During the checkout testing, the O&M logs will be developed, individual equipment and instruments will be adjusted, and the O&M manuals will be updated.The purpose for Step-2, Pre-Start-up Tests, is to prepare the plant for start-up and operation activities and includes the following: Charging the plant with chemicals, lubricating the equipment, and providing all the other needed operating and process supplies and materials Activating all plant systems, subsystems, and equipment Testing pumps, seal systems, and flushing piping systems Performing field trials and updating of operating procedures

Shutdown is designed to safely deactivate all plant systems, including purging and cleaning where required. Detailed inspections will be performed and the results will be documented, including updating maintenance history cards, as appropriate. Steady state operation can be at full plant output, as well as at alternative production rates that may be required, without any upsets from each system, subsystem, and individual component.

3. Training Activities
The main training program will focus on the operation and maintenance of the plant, including the intake system, pretreatment system, desalination system, plant control system, and plant effluent. Employees will be required to review the relevant administrative as well as technical SOPs so that they understand site protocol in all respects. Additional training responsibilities that should be fulfilled include safety training. Safety will be an integral part of the main training program as well as a special topic covered at initial and scheduled safety lectures. The training program will be divided into three categories: initial training of the start-up crew; on-the-job training of the start-up crew; and training of new hires subsequent to plant start-up. Initial training of the start-up crew includes shift leaders, technicians, and operators.

In Step 3 Start-up and Operating Adjustments, the systems will be brought into operation and the adjustments needed to achieve design performance will be made. The start-up and adjustment period will continue until the systems reach their steady state, which is determined by observing the key process variables for a period of time. The baseline establishment test run will be made using a fixed set of conditions. These fixed conditions will be used in subsequent tests for comparison and evaluation of performance.

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Inspection guides Lubrication charts Painting schedules A work order system to schedule, track, and record work performed and to supply data inputs into specified monthly, quarterly, and annual reports A work order request form. Operator service Maintenance Adjustment Touch-up and corrosion prevention Replacement of minor items

Training is planned to be held in a classroom, with frequent visits to the plant to illustrate system and component uses and operation. On-thejob training of members of the operating crew should be started during the acceptance testing and continue through check-out. Training of new employees following plant start-up will be implemented to accommodate the transition of new employees into the work environment.

The preventive maintenance program for the plant will generate both manual and automated task documents. Specific tasks and documents include the following: Providing overall planning, scheduling,and guidance and assigning management and supervisory personnel to the site Developing and prescribing a maintenance program and procedures for the plant Scheduling, supervising, and inspecting all maintenance and repair work Coordinating plant maintenance and repair work with operations. Accomplishing continual inspection of the plant to determine its condition Performing preventive maintenance inspections and actions in accordance with schedules and procedures Collecting and analyzing

4. Maintenance Activities
A maintenance system will be established to provide an economical maintenance program through scheduled inspections to ensure reliable operation while preventing costly premature failures. This system will include the following: Comprehensive master preventive maintenance schedules that include each piece of equipment

maintenance history data. Recommending plant modifications and improvements Estimating material and labor requirements for accomplishment of work orders and repair work Calibrating measuring and test equipment, electrical instruments, protective relays, and pressure and temperature gauges Establishing and maintaining lists of parts and materials required for the economical and reliable operation and maintenance of the plant Compiling and maintaining maintenance records for all plant equipment Furnishing an adequate supply of hand tools to maintenance personnel Providing the necessary numbers, skills, and types of personnel to effectively maintain the plant and to accomplish necessary repairs Ensuring that maintenance personnel are fully qualified to perform work to which they are assigned Ensuring that sound environmental and safety practices are followed in the performance of all maintenance work Implementing work reception and control to authorize and control work Maintaining the equipment history file Maintaining applicable reference and technical documents in the technical library

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Coordinating with the Owner and giving advance notice in the case of a discontinuation of or a reduction in operations due to scheduled maintenance, inspection, or repairs Requesting and arranging assistance by home office specialists or equipment manufacturers' technical representatives when problems or repair work are beyond the capability of the on-site work force

5. Warehouse Activities
The warehouse system will include receiving, inspecting, marking, preserving (when appropriate), stocking, and shipping. The warehouse operation will conform to the Owner's requirements. All acquisition and disposal actions will require three signatures to prevent fraud or abuse. The warehouse functional tasks include the following: Receiving, inspecting, marking, preserving (when appropriate), and stocking of incoming parts, materials, and supplies Preparing receiving reports and disposal and transfer documents Performing scheduled inventories Issuing stock items, including monitoring personnel accountability Maintaining the proper stocks levels established Maintaining the proper stocks levels established for parts and materials by preparing requisitions, when necessary Posting all transactions to stock records. Purchasing parts and materials that are locally available Maintaining suppliers' catalog files Preparing for shipment and return those items that were received incorrectly and shipping items out for repair Ordering tools; marking up, issuing, and accounting for toolboxes Stocking, issuing, repairing, and accounting for special and large tools and maintenance equipment that is not normally found in the trade toolboxes

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Preparing of property forms and reports Ordering, stocking, billing and accounting for bin stock, as necessary Maintaining the catalog Marking stock and equipment using the bar code and/or capitalized property label system. Picking up, delivering and moving parts, materials, supplies and furniture Conducting sales and disposing of surplus property as approved by the Owner

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ENCOMPASS

CLARITY
Engineering Procurement Construction Operation & Maintenance

D E S A L I N A T I O N

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800 Kinderkamack Road Oradell, New Jersey 07649 Telephone (201) 265-2000 Fax (201) 986-4459 www.roe.com

Reflections I - 2809 S. Lynnhaven Road, Suite 100 Virginia Beach, Virginia 23452 Telephone: (757) 340-1107

SB-OM-003