Heat Exchanger and Cooling Tower Manual 3100 Specifying and Purchasing Procedure

3100 SPECIFYING AND PURCHASING PROCEDURE

Abstract
This section outlines a suggested procedure for ordering heat exchanger equipment. This is a general procedure that
does not address local practices or administrative and approval requirements. It may be modified for local preferences
or used as is.

Contents Page Page

3110 Steps for Purchasing Heat 3100-2 3140 Purchasing the Exchanger 3100-3
Exchangers
3150 Model Quotation Request and 3100-4
3120 Quotation Request 3100-2 Requisition

3130 Bid Evaluation 3100-2

3131 Technical Analysis

3132 Cost and Delivery Analysis

3133 Commercial Terms

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 3100 Specifying and Purchasing Procedure
3110 STEPS FOR PURCHASING HEAT
EXCHANGERS
Listed below are the major steps involved in purchasing
heat exchanger equipment.
1. Obtain process requirements and physical and
chemical properties of the fluids.
2. Determine operation and maintenance and construc-
tion requirements or concerns.
3. Investigate site and utility conditions and restraints
(e.g., space, power, cooling water, underground in-
terferences—pipe, old foundations, etc.).
4. Select the type of heat transfer equipment (shell and
tube, air cooler, double pipe, plate exchanger, etc.).
5. Prepare quotation request—see Model Quotation
Request or Purchase Order, Section 3150.
6. Complete the exchanger data sheet(s)—see Data
Sheet Guide for details. (The Data Sheet Guides are
located after the appropriate specification.)
7. Prepare special drawings (not normally required).
8. Attach applicable standard drawings.
9. Forward bid package (items 5 through 8) to Purchas-
ing.
10. Obtain quotations (by Purchasing).
11. Evaluate quotations, recommend vendor, discuss
with client, and obtain appropriate expenditure ap-
provals.
12. Prepare materials requisition—see Model Quotation
Request or Purchase Order.
13. Forward the approved bid analysis and revised (if
needed) list sheets, specifications(s), data sheet(s)
and drawings, through channels to Purchasing for
placement of the order.
3120 QUOTATION REQUEST
Work with your local purchasing organization to obtain
written quotations. Usually 4 to 6 weeks are needed.
Purchasing is responsible for the selection of bidders.
However, you should recommend bidders for inclusion
(or exclusion) when project, technical, quality, or other
considerations make it advisable.
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Heat Exchanger and Cooling Tower Manual
Specify that the vendors complete the Company data
sheet(s). Vendors often use their own data sheets which
can be confusing when making bid comparisons, or they
omit valuable information.
On equipment with which you are unfamiliar, you should
go over the technical aspects of your bid request with
local technical specialists, or with technical specialists of
the Engineering Technology Department.
3130 BID EVALUATION
Four key criteria must be satisfied to select a vendor:
technical features, cost, delivery, and commercial terms.
For “Engineered” equipment, such as complex shell and
tube and air cooled heat exchangers, the engineer per-
forms the technical, cost, and delivery analysis. The re-
sult of his work will be to recommend the vendor whose
bid: (1) meets all the requirements of the bid request, and
(2) results in the lowest evaluated overall cost to the
Company. The major considerations in reaching these
results are covered in the following section.
3131 Technical Analysis
Standard forms are available to facilitate the technical
analysis of the bids. Use EXH-EF-20 for shell and tube
exchangers and EXH-EF-20-A for air coolers. These
forms are located in the Standard Drawings and Forms
section of this manual.
Use the appropriate sections of this manual for guidance
in making the technical analysis. The technical items
which should be considered in the bid analysis along
with the appropriate section to refer to for advice are
listed below.
• Exchanged Duty
• Heat Transfer Rate—Service, Clean—Section 210,
Section 300 (for specific services)
• Mean Temperature Difference (MTD)—Sections 210
• Surface Area (bare and finned)—Sections 210, 480
• Fouling Resistance—Sections 240, 300
• Pressure Drop—Section 220
• Design Pressure and Temperature—Section 510
• Corrosion Allowance—Section 800
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 Heat Exchanger and Cooling Tower Manual
• Materials of Construction (shell, tubes, fans, etc.)—
Section 800 and specifications
• Codes—Section 120
• TEMA Size and Type (for shell and tube ex-
changer)—Section 410
• Extended Surface Specifications (if applicable)—
Section 270
• Tube and Shell Side Velocities (where applicable)—
Section 220
• •
Number of Shell and Tube Side Passes (where appli-
cable)—Section 440
• Number of Bays (for air cooled exchangers)—Sec-
tion 600
• Platforms and Ladders (for air cooled exchangers)—
EXH-MS-1826
• Motor and Fan Specifications (for air cooled ex-
changers)—EXH-MS-1826
•
Noise requirement (for air cooled exchangers)—
EXH-MS-1826
If any exceptions are stated or alternatives proposed, they
must be clearly understood and they must meet the tech-
nical, maintenance, and performance requirements of the
quotation request.
3132 Cost and Delivery Analysis
Once the bidder’s proposal(s) is understood, you can
proceed with the cost and delivery analysis. To save
effort, first run a rough screening of the bids to determine
if some may be eliminated because of unacceptable tech-
nical, commercial, and/or cost differences. Then evaluate
(cost) the acceptable differences (if any) among the re-
maining bids that are within the scope of the specifica-
tions and that are of value to the Company (lower energy
consumption, higher efficiency, mechanical features,
etc.). Finally, to make the bids comparable, apply these
estimates to the appropriate bid(s) to determine which
offering provides the lowest overall evaluated cost to the
Company.
The cost and delivery analysis can be made using locally
available forms, such as PD 137/PD 135, Summary of
Bids, available from Purchasing.
December 1989
3100 Specifying and Purchasing Procedure
When evaluating vendors’ quotations, the following cost
and delivery items should be considered:
• Equipment Cost
• Freight
• Spare Parts (requirements and costs) Tools, Test
Rings, etc.
• Export Preparation
• Penalty for Progress Payment
Escalation (clause)
• Differential Piping Cost
• Erection Cost
• Operating Cost—This is especially important for
water cooled exchangers.
• Estimated Cost to Meet Specifications
Once you have evaluated the quotations, decided on the
lowest evaluated cost offering, and recommended a ven-
dor, talk again with operating or project representatives.
Make sure they understand and agree with the reasons for
your selections, especially if your decision conflicts with
their preferences.
3133 Commercial Terms
Commercial terms are Purchasing’s responsibility. They
often add special requirements to the bid package besides
the standard preprinted terms and conditions that are
always included. After negotiations with the lowest bid-
der(s) (during the course of the bid analysis) these may
be modified and/or others added.
The “low bidder” is then that bidder whose proposal: (1)
meets the minimum requirement of the specification(s)
(including quality and reliability); (2) results in lowest
evaluated overall cost to Company; and (3) contains ac-
ceptable commercial terms and delivery.
3140 PURCHASING THE EXCHANGER
Prepare the proper requisition form and forward it
(through local channels) to Purchasing complete with an
approved bid analysis and all the documents in the origi-
nal bid package modified and/or updated with informa-
tion received from the recommended vendor.
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 3100 Specifying and Purchasing Procedure
The engineer’s job is not done when the exchanger is
placed on order. Vendor followup is important. You must
make sure the exchanger is being built to specifica-
tions—through review of vendor’s drawings. The engi-
neer must follow the fabrication progress closely so that
any schedule slippage is noted and acted upon early.
Inplant expediting through Purchasing is another way to
follow the progress of an order, but it is costly. If inspec-
tion is required, read your inspector’s reports and keep in
touch to make sure he is doing his job correctly and that
you are getting the required tests and inspection. Section
900 discusses inplant inspection in more detail.
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Heat Exchanger and Cooling Tower Manual
3150 MODEL QUOTATION REQUEST
AND REQUISITION
This model has been developed to aid in the preparation
of quotation requests and requisitions for shell and tube
heat exchangers, and for air cooled heat exchangers. The
entire text will not necessarily apply to every quotation
request or requisition, and all requirements are not in-
cluded in this model. The user must select the applicable
portions for each request or requisition. Where blanks
appear, the user must choose wording applicable to the
particular equipment involved. In many cases additional
items will need to be added to some or all of the sections.
December 1989