Quoting Pressure vessels

[picasa]

As an engineer, I will like to hear from fabricator community about the process, methodology, techniques used by fabricators when they quote pressure vessels. What are some of the things that EPC firms can do to expedite the process of getting quotes from fabricators. Do fabricators have any suggestions to EPC firms?

It is my understanding that steel is in great demand all over the world. How does this affect them when they gaurantee a certain price for one month. Where do they get the steel prices from and how do they know that the price wont change for certain period. I bet there is some financial risk involved.

 

[JStephen]

On the steel issue, it doesn't matter so much if prices are high or low, but what matters is if they are stable. Then you can predict your cost.

Where do you get steel prices from...from the people that you buy steel from. Steel warehouses and service centers, or mills for larger orders. A vessel fabricator doing small vessels may already have the material in inventory, and can quote based on that.

How you know the price won't change- you don't. But you usually have a general idea of how stable prices are. And if you need to, you can include whatever margins you need to include to cover estimated future increases. This is a problem in ALL contracting, not just pressure vessels.

 

[SnTMan]

Most fabricators are little guys, most E&C's are big guys. So:

1) Review your narrative specs and sent only what is absolutely required. Don't just dump paper on the fabricator and let them figure it out.

2) Firm up vessel specifications as early as possible, as certain kinds of changes require a complete re-quote.

In our industry, quotes are pretty detailed, quite a bit of effort goes into them especially with material prices like they are now. I don't prepare quotes but I know that the estimators run the design, go out for material pricing from our suppliers, and estimate labor hours from internal standards and etc. We stock very little material because we don't know what's selling next.

Sometimes the paperwork overhead required by E&C's for the quote is nearly overwhelming for a small company. "We've completely changed the process on Items 1&2 and added two new specs. Please furnish new pricing for all six Items by noon Wednesday."

 

[waskillywabbit]

Picasa wrote:

"As an engineer, I will like to hear from fabricator community about the process, methodology, techniques used by fabricators when they quote pressure vessels. What are some of the things that EPC firms can do to expedite the process of getting quotes from fabricators. Do fabricators have any suggestions to EPC firms?"

I work as an engineer for a fabricator and I am part of the process of most pressure vessels that we fabricate, many times from quote to shipment, and a "firm price" quote can't just be generally thrown together in a day or two. General "budget" quotes are usually given at +/- 30% and just provide a ballpark figure. There are many variables to consider such as material availability, size of the pressure vessel, delivery time, the complexity of internals, etc. you get the idea. It helps when we get the "RFQ-request for quote" in adequate time to prepare a thoroughly researched pressure vessel quote.

"It is my understanding that steel is in great demand all over the world. How does this affect them when they gaurantee a certain price for one month. Where do they get the steel prices from and how do they know that the price wont change for certain period. I bet there is some financial risk involved."

Yes, steel prices have gone crazy over the past year, almost doubling from Feb 2004 to March 2004, and have continued on a steady incline. Generally, the quote is good for a 30 day period, BUT subject to material availability and price at the time the customer decides to place the order. In business, there is always some financial risk involved, but you try to minimize it by thoroughly researching each pressure vessel quote.

I hope this helps some and gives you some insight.


Brian

http://www.mcabeeconstruction.com

Opinions expressed are my own and are not those of the company.

 

[SnTMan]

Material prices are such that we price just about every job with escalation clauses. Never used to see that.

 

[adrianviorel]

Dear picasa,
Usually, EPC companies are giving a lot of specs and engineering standards to be reviewed by the company that is offering. This takes a lot of time and involves a lot of risks, the imense amount of information being difficult to process. And you know that a single technical demand can throw you out, from the position of being able to , to the position "sorry, we cannot". Therefore, a preliminary design, containing dimensions, materials, etc. , would be helpful. We call it " informative consumption of materials". Anyhow, I wouldn't advise issueing datasheets only, such behaviour involving risks for both parties (fabricator/EPC company). You have to take into consideration that design should be assumed by EPC's, that are usually engineering companies. Even in the opposite case, design should be approved by EPC's. Therefore, it is preferrable to assume it's own design(as an option, they can subcontract to smaller engineering companies).
Try to avoid solutions based on "exotic" standards, and to find common solutions, based on the idea that wheel was already invented. that way, you will avoid, also, the risks of being refused or getting a very high price.
One more idea: try, as much as possible, to use the same materials, for the whole plant, small quantities being difficult to purchase, thus, prices and delivery time increasing.
Regarding prices, it seems that steel price's increasing cooled down a bit. The only problem remains their level.