Estimating Costs and Preparing the Bid for a New Build
I spent some time in the estimating departments of several Offshore Construction Companies, and although my remit was estimating piping fabrication and mechanical equipment installation and commissioning, I also did a little hull fabrication using welded plates.
Repairs are estimated on their description as supplied by the ship owners that will include the timescale relevant specifications and a set of drawings.
The following examination will include basic estimating techniques of the main components;
- The hull
- The engine room
- Piping and HVAC
- Electrical equipment
The costs associated with producing structural and piping drawings from the client’s design drawings along with the cost to produce the final bid and dry-dock use/launching are an overall cost added to the construction costs.
This requires a Material Take Off (MTO) for all the materials used in the hull construction. The estimators are each allocated their own section of the hull, usually by frame numbers, to produce this MTO and include everything from the main plates, longitudinal main girders, and bulkheads right down to the smallest stiffener.
Blasting, painting, and any insulation or fireproofing is added, and the cost of the total steel plate and steel section is then estimated.
- Welding and NDT (Non Destructive Testing)
There are two basic welds used in welding plates and structural members, fillet and full penetrating welding, and also numerous other methods of welding depending on the client's preference and specifications. These have their own costs for consumables such as the stick rods, rolls of wire, and shielding gas.
The length of these welds are estimated along with the man-hours for manual/automatic welding and the associated stress relieving heat treatment and NDT, including radiography where the full penetrating welds are subjected to x-ray are costed.
Assembly of all the fabricated sections will normally be carried out in the dry-dock or on slipways; and there will be standard costs worked out by tonnage of materials for these operations, i.e. use of cranes and opening and closing the dock gates. To flood and empty a dry-dock can cost up to $600,000 by the time you remove the silt then replace the water seals before closing again.
The Engine Room
The manufacturers of a modern ship’s main diesel engines such as Wartsila and MAN-B&W have licensed various shipyards around the world to build these engines and install them in their ships hulls. The costs will be pretty well standardized for the building and installation of the engines along with the auxiliary engines and associated pumps and coolers.
The installation costs will depend on whether the engines can be lifted into the engine room after testing is complete, or as in my day, in sections.
The cylinder heads of modern MAN B&W 2 stroke from Wiki Commons by xtremmachineuk is shown here.
Piping Fabrication and Installation
The piping fabrication isometrics are taken from the design drawing and fabricated to these. The estimate is taken from the drawings in order to ascertain the lengths of pipe, number gaskets and bolts along with the number of fittings and welds. Materials for ships piping are normally cuni-copper/nickel, stainless, and carbon steel, so different NDT is required, including radiography if pipes are high pressure oil or gas.
Magnetic Particle Inspection (MPI) for carbon steel fillet welds is the cheapest method, and usually only a percentage of welds are examined, unless there is a problem found.
Costing is based on the total length and type of materials, number of welds, and number of fittings. Also estimated is the pipe supports fabrication, shot blast, painting and installation, along with the associated hydro-testing required on the completed runs.
HVAC Fabrication, Installation and Testing
Fabrication drawings are made from the clients design drawings, and from these the material required to fabricate the HVAC ducting spools is estimated.
Components such as fans, dampers, and filters are shown on the drawings and costed.
Some HVAC ducting is fabricated from stainless steel, particularly for use in the accommodation and galley, but the majority is from carbon steel sheet.
Once fabricated the carbon steel spools are hot-dipped galvanized before being installed along with the different components and pressure tested for leaks.
The motors for pumps and fans are included with the driven components and normally bought as sets, i.e. "pumpsets."
The installation of all the other electrical equipment such as switchboards, transformers, control panels, including the electrical cable used to connect them, also need to be estimated.
Labor – Man-hours
There are several methods of working out the man-hours (MHR) required for all the above operations. One method is to use the weight of materials, but most shipyard estimating departments have what is known as “norms” to achieve this very important component of estimating the fabrication of ships.
This includes the following main components: HVAC, piping and pumps, electrical and mechanical equipment, along with main and auxiliary engines.
This can be carried out by the shipyard personnel, but it is quite specialized. At the offshore construction yard, we normally brought the equipment and systems up to a pre-commissioning stage. This included pressure and leak testing, electrical circuit testing and certification, supplying the various mechanical pumps and engines with lubricating oil. These were then handed over, usually by systems, to a subcontracting commissioning engineering company who would prepare their own estimating for these components, and this is then added it to the main bid.
1. I have included procurement of the various components and pieces of equipment to add to the estimate, however it is quite normal for the client to procure the equipment and transport it to the shipyard that they have chosen to build their ship.
2. There is often a long lead-in time between receiving equipment before it is required to be installed, so most yards used to have a Preservation of Equipment Procedure. By the amount of queries I have had to several articles I have written on the subject, especially from Engineers looking after stored equipment in high humidity conditions of the Far East Shipyards, this is still the case. This should also form part of the estimation including man-hours, materials used, and warehouse costs in heating and de-humidification.
3. The estimation of ships repair follows along the lines of the construction operations given above. The ship owner normally gives a scope of work with a set of drawings, and from this information it will be decided if any hull repairs will require a dry-docking. Engine repairs are normally carried out at the quayside where cranes and services such as water and power are available.