Turnaround cost control:
from the first estimate to the final forecast

01Why the number is always late

A turnaround spends in days what a plant spends in months, and it spends it through contractors. A 21-day event with 50 or more contractors produces more than 1,000 contractor-day cost reports. When those reports arrive in 50 formats, someone rebuilds them by hand before a cost engineer can add them up. By the time the total exists, the decisions it should have informed have been made.

The same problem starts earlier. Contractor quotes arrive in each contractor's format, so comparing them means re-keying them into one sheet. Costs from the last event were captured the same way, so they cannot be benchmarked against this one. Nothing is comparable because nothing was captured the same way.

02The six stages

03Stage 1 and 2: one format for estimates and bids

The control that fixes most of what follows is the simplest: contractors estimate and bid inside the owner's system, in one format, with the owner's rates built in. Two things happen. Quotes become comparable line by line, which makes bidding more competitive. And the estimate becomes the first version of the budget rather than a document that is re-typed into one.

On a $25 million turnaround, a 1% improvement in pricing is $250,000. That is the value of comparability alone, before anything is tracked.

04Stage 3: build the budget from approved estimates

A budget assembled separately from the estimates drifts from them before the event starts. Build the cost and manpower budget directly from the approved estimates, by package, so every budget line traces to an estimate and a contractor. Then the daily comparison in stage 4 has something to compare against.

05Stage 4: daily cost and manpower

Three numbers per package per day: the estimated cost, the incurred cost from the contractor's daily report, and the ERP actuals once they post. Beside them, the daily headcount: planned against actual, by contractor, by day. Headcount is the earliest warning on a turnaround. A contractor running 20% over plan on headcount for three days is a cost overrun that has not been invoiced yet.

The control is where the numbers are captured. When contractors enter their daily cost report inside the owner's system, the format problem disappears and the total exists at the end of the shift.

06Stage 5: a forecast that moves by shift

A forecast at completion is only useful while there is still time to act on it. Compare incurred cost against the original budget every day, carry the trend forward, and show the variance by package and by contractor. Leadership should be able to answer "what is this going to cost" at the start of any shift, not at the monthly review.

07Stage 6: scope changes approved before the work

Discovery work is normal on a turnaround. Uncontrolled discovery work is not. Every scope item added after the freeze should be visible the day it is added, with its hours and cost, and approved before a crew is assigned. The forecast then moves the same day. Scope that shows up for the first time on an invoice is the single largest source of overrun on most events.

08What comparability buys you next time

When every event is captured the same way, the second event can be benchmarked against the first: cost per package type, contractor performance against estimate, headcount curves by phase. That is the turnaround cost comparability most sites say they want and few have the data for.

09A $25 million event in numbers

10Common mistakes

1. Building the budget in a spreadsheet beside the estimates, so the two drift apart before the event starts.

2. Accepting contractor daily reports in the contractor's format and rebuilding them by hand, which turns a daily number into a weekly one.

3. Reporting cost by calendar month on an event that lasts three weeks. The forecast has to move by shift.

4. Treating discovery work as inevitable and therefore uncontrolled. It is inevitable; its approval is not.

5. Capturing this event's cost in a way that cannot be compared with the last one, so there is still no benchmark next time.

11What to do before the next event

Three changes, in order. First, write the standard estimate format into the next bid package, so every contractor who bids has already used it. Second, build the budget from the approved estimates by package, not beside them, so stage 4 has a line to compare against. Third, decide the day the event starts that cost will be reported by shift, and give contractors the place to report it. None of the three needs the turnaround to be large; a $5 million event with eight contractors has the same six stages and the same reasons the number is late. The difference at the end is a forecast that was true at the start of every shift, and a cost history the next event can be measured against.