Gents, 

We are about to finalize forecast to completion in Riyadh Metro project. 

However, capital spares list is still unknown.
Contract is not clear in this part.

I would like to have your opinion on this issue and guide me to a basis to calculate an allowance for this scope. 

Currently, I assumed 5% over the total cost of materials and equipment. Any better approach?

Thank you

------------------------------
Fadi Mughrabi CCP
Project Cost lead
Consolidated Contractor Company - BACS Consortium
Riyadh
00966549958842
------------------------------

Dear Fadi, 

You need to do a detailed cost estimate for spare parts, first get the list of spares which supposed to be given with each OEM, it should be part of the technical submittal, then add them all in excel file and with help of Procurement deprt you can get the cost estimate. Sometimes, it is part of the vendor agreement with specific cost, if so then you will lucky and u can calculate it all.
If you find any difficulties in the above or absence of information, then you may go for ROM estimate based on 3 to 5% of Elect & Mech material cost.

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Amr Atef, PMP EVP PSP
Projects Control Manager
00201283113777
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My background is on industrial facilities. Capital spares account is for major equipment, like pumps and compressors. Capital spares are for spare rotors for compressors, etc. I would not apply a percentage to all materials. Would make more sense to apply to major equipment only.

Rich Stack
Retired PCM

Sent from my iPad

------Original Message------

Gents, 

We are about to finalize forecast to completion in Riyadh Metro project. 

However, capital spares list is still unknown.
Contract is not clear in this part.

I would like to have your opinion on this issue and guide me to a basis to calculate an allowance for this scope. 

Currently, I assumed 5% over the total cost of materials and equipment. Any better approach?

Thank you

------------------------------
Fadi Mughrabi CCP
Project Cost lead
Consolidated Contractor Company - BACS Consortium
Riyadh
00966549958842
------------------------------

Fadi,

I would try not to use a % for estimating cost of spares at the first instance.
Here is what I would do:

1. Identify which major equipment require capital spares with consultation of the project and client team. Not all spares need to be purchased by the project. Some can be bought post-project under operations/maintenance budgets.
2. Once all major equipment requiring capital spares has been identified, work with your procurement team to obtain the costs from the OEMs/authorized agents. Some May have already quoted capital spares in their original proposals as an option. If not try, and obtain this via direct inquiry.
3. Compile all cost data into your preliminary capital spares list and reconfirm with the project and client team if the list of spares and their associated costs are ok. I assume that the baseline cost estimate has not been finalized, otherwise this would need to be raised as a change.
4. After the above steps, you may start to incorporate the costs into your forecast to completion.

In the absence of quotes from the OEM, and if you absolutely need to make a guess, do make it a detailed one. Understand the different types of spares and difference associated costs. Mechanical rotating are different from electrical spares. Motors are usually cheaper than the rotating parts that they move hence allow a higher % than normal. I hope this helps.

regards,
Shahril

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Shahril Othman
Kuala Belait
(673) 717-1101
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