Utilizing the Total Cost Equation When Selecting Pipeline Material
July 22, 2016
When Request for Proposals go out to construct a pipeline project, usually there are several if not many line items that eventually determine the project cost. However, when bid documents are received by the owner or engineer, many times the per foot bid for the pipeline material is all that is considered. The scope of this paper will focus upon “The Total Cost Equation” which looks at other factors which should be taken into account before the bid analysis is finalized. When utilizing the “Total Cost Equation” to analyze bid proposals for differing pipeline materials, it has been found from actual field data the cost differential between those materials can be much different than the initial per foot bid of the material when taking into account respective factors that are directly related to installation. Using the “Total Cost Equation”, one can determine final project costs related to differing materials. This approach has shown the initial per foot cost of the respective materials is often deceiving, but unfortunately used by many owners and engineers to select pipeline material. In order to best serve a utility owner in the selection of pipeline material for a specific project, several if not many factors relating to the successful installation of that pipeline should be taken into account. Beyond the initial per foot cost of the pipeline material, some other immediate costs exist such as bedding, tapping saddles, line locator wire, corrosion protection and materials to prevent leakage. Additionally, longer term present worth costs such as energy and life cycle should be considered. Prior to a final decision on the selection of pipeline material for a particular project, the “Total Cost Equation” should be applied and the components of the equation incorporated into the final material selection process.
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