PETRONAS TECHNICAL STANDARDS

DESIGN AND ENGINEERING PRACTICE

(CORE)

MANUAL

CONTENT AND DRAFTING OF A FUNCTIONAL SPECIFICATION,

AND A TECHNICAL SPECIFICATION, AND THE
CLASSIFICATION OF PRODUCTS, PROCESSES AND SERVICES
(ENDORSEMENT OF ISO 13879, ISO 13880 AND ISO/TR 13881)

PTS 00.00.07.30
DECEMBER 2000
 PREFACE

PETRONAS Technical Standards (PTS) publications reflect the views, at the time of publication,
of PETRONAS OPUs/Divisions.

They are based on the experience acquired during the involvement with the design, construction,
operation and maintenance of processing units and facilities. Where appropriate they are based
on, or reference is made to, national and international standards and codes of practice.

The objective is to set the recommended standard for good technical practice to be applied by
PETRONAS' OPUs in oil and gas production facilities, refineries, gas processing plants, chemical
plants, marketing facilities or any other such facility, and thereby to achieve maximum technical
and economic benefit from standardisation.

The information set forth in these publications is provided to users for their consideration and
decision to implement. This is of particular importance where PTS may not cover every
requirement or diversity of condition at each locality. The system of PTS is expected to be
sufficiently flexible to allow individual operating units to adapt the information set forth in PTS to
their own environment and requirements.

When Contractors or Manufacturers/Suppliers use PTS they shall be solely responsible for the
quality of work and the attainment of the required design and engineering standards. In
particular, for those requirements not specifically covered, the Principal will expect them to follow
those design and engineering practices which will achieve the same level of integrity as reflected
in the PTS. If in doubt, the Contractor or Manufacturer/Supplier shall, without detracting from his
own responsibility, consult the Principal or its technical advisor.

The right to use PTS rests with three categories of users :

1) PETRONAS and its affiliates.

2) Other parties who are authorised to use PTS subject to appropriate contractual
arrangements.
3) Contractors/subcontractors and Manufacturers/Suppliers under a contract with
users referred to under 1) and 2) which requires that tenders for projects,
materials supplied or - generally - work performed on behalf of the said users
comply with the relevant standards.

Subject to any particular terms and conditions as may be set forth in specific agreements with
users, PETRONAS disclaims any liability of whatsoever nature for any damage (including injury
or death) suffered by any company or person whomsoever as a result of or in connection with the
use, application or implementation of any PTS, combination of PTS or any part thereof. The
benefit of this disclaimer shall inure in all respects to PETRONAS and/or any company affiliated
to PETRONAS that may issue PTS or require the use of PTS.

Without prejudice to any specific terms in respect of confidentiality under relevant contractual
arrangements, PTS shall not, without the prior written consent of PETRONAS, be disclosed by
users to any company or person whomsoever and the PTS shall be used exclusively for the
purpose they have been provided to the user. They shall be returned after use, including any
copies which shall only be made by users with the express prior written consent of PETRONAS.
The copyright of PTS vests in PETRONAS. Users shall arrange for PTS to be held in safe
custody and PETRONAS may at any time require information satisfactory to PETRONAS in order
to ascertain how users implement this requirement.
 TABLE OF CONTENTS
1. INTRODUCTION
1.1 SCOPE
1.2 DISTRIBUTION, INTENDED USE AND REGULATORY CONSIDERATIONS
1.3 DEFINITIONS
2. FUNCTIONAL SPECIFICATION PHILOSOPHY
2.1 WHY WRITE A FUNCTIONAL SPECIFICATION?
2.2 FUNCTIONAL SPECIFICATION METHODOLOGY
2.3 GENERAL GUIDANCE
3. INTERNATIONAL STANDARDS APPROVED FOR USE
4. REFERENCES
1. INTRODUCTION

1.1 SCOPE
This new PTS gives recommendations on the content and drafting of a Functional
Specification. It also gives recommendations for the content and drafting of a Technical
Specification in order to ensure that all technical requirements of a product, process or
service are included and can be verified as complying with specified performance
requirements, such as may be specified in a Functional Specification. In addition this PTS
describes two classification methods (one being based on calculated risk, the other on
judgement of risk) which may be used to determine the appropriate conformity assessment
system for products, processes and services; and a set of five conformity assessment
systems from which the most suitable is chosen when conformity assessment of products,
processes and services is required.
A Functional Specification may not be necessary if a Principal wishes to obtain a known
standard product, process or service manufactured/supplied to a recognized standard.
A Technical Specification may not be necessary for a known standard product, process or
service manufactured/supplied to a recognized standard.
This PTS is based on International Standards ISO 13879, ISO 13880 and ISO/TR 13881,
which are adopted without amendment.

1.2 DISTRIBUTION, INTENDED USE AND REGULATORY CONSIDERATIONS

Unless otherwise authorized by PETRONAS, the distribution of this document is confined to
companies forming part of PETRONAS group and to Contractors nominated by them.
This PTS is intended for use in oil refineries, chemical plants, gas plants, supply/marketing
installation and in exploration and production facilities.
If national and/or local regulations exist in which some of the requirements may be more
stringent than in this PTS, the Contractor shall determine by careful scrutiny which of the
requirements are more stringent and which combination of requirements will be acceptable
as regards safety, environmental, economic, and legal aspects. In all cases, the Contractor
shall inform the Principal of any deviation from the requirements of this PTS which is
considered to be necessary in order to comply with national and/or local regulations. The
Principal may then negotiate with the Authorities concerned with the objective of obtaining
agreement to follow this PTS as closely as possible.

1.3 DEFINITIONS
The Contractor is the party which carries out all or part of the design, engineering,
procurement, construction, commissioning or management of a project, or operation or
maintenance of a facility. The Principal may undertake all or part of the duties of the
Contractor.
The Manufacturer/Supplier is the party which manufactures or supplies equipment and
services to perform the duties specified by the Contractor.
The Principal is the party which initiates the project and ultimately pays for its design and
construction. The Principal will generally specify the technical requirements. The Principal
may also include an agent or consultant authorised to act for, and on behalf of, the
Principal.
The word shall indicates a requirement.
The word should indicates a recommendation.
2. FUNCTIONAL SPECIFICATION PHILOSOPHY

2.1 WHY WRITE A FUNCTIONAL SPECIFICATION?

The use of “Functional Specifications” has led to valuable benefits in terms of reduced cost
and improved performance through increased Manufacturer/Supplier accountability, a focus
on life cycle costs, the ability to offer standard, off-the-shelf products where possible, and
rationalised documentation requirements.
The seeming ease with which these benefits can be realised is leading to use of Functional
Specifications throughout the petroleum and natural gas industries. It is however vital to
consider Functional Specifications as a catalyst for and the start of a totally new
procurement process. The rewards of this process can only be realised if the risks in using
it are identified and managed.
The ability of the product, process or service as described in the Technical Specification,
offered by the Manufacturer/Supplier to meet the needs of the Principal, as described in the
Functional Specification, must be established. This can only be done if the Principal’s
needs are clearly defined with the Functional Specification. It is essential that the scope of
the Functional Specification covers all the aspects relative to the desired performance and
that the depth of specification is such as to avoid technical prescription whilst describing a
functionality which can be subsequently measured.
This PTS guides the Principal in producing a comprehensive Functional Specification which
will fully cover the required range of functionality and in the depth necessary to provide for
verifiable performance whilst allowing the Manufacturer/Supplier an opportunity to develop
a Technical Specification offering less costly products, processes, or services.

2.2 FUNCTIONAL SPECIFICATION METHODOLOGY

2.2.1 General
In order to realize the full potential of Functional Specifications it is necessary that all
parties recognize that the procurement process will differ from that previously employed.
Under the traditional process, the Principal stipulated the terms and conditions, and
prepared the scope of supply and detailed specifications, and the Manufacturer/Supplier
prepared his response, with particular reference to price, delivery and exceptions to terms,
conditions and specifications. The Principal’s evaluation of tenders generally comprised
independent commercial and technical evaluations with the aim of ensuring compliance
with specification at the lowest initial cost.
In contrast, the new approach will require a fundamentally different procurement process
where greater emphasis is placed on the Principal to define the functional, i.e.,
performance, requirements prior to tendering. The evaluation of tenders is a joint exercise
between the Principal’s commercial and technical personnel. Relevant tender details,
including price, are made available to each to ensure that the most suitable and economic
selection giving minimum life cycle cost is made from a number of potentially different
solutions.

2.2.2 The Role of the Principal

If using the Functional Specification approach, the Principal should recognize that the
procurement process will differ radically from that previously employed.
From the Principal’s perspective, the key differences will be:
• the need to ensure adequately skilled and experienced staff to participate in and have
influence on the preparation of the Functional Specification;
• the need for greater emphasis on the pre-qualification of tenderers. Specifically,
confidence in their ability to design a technically acceptable solution, rather than simply
manufacture to a prescriptive Principal specification;
 • the need for facilitative terms and conditions which will promote, rather than discourage,
diversity in response to an Invitation to Tender;
• the need to provide a “life cycle” approach to specification of requirements. The
Principal must clearly define operational performance expectations, identifying key
considerations, e.g., Human Interfaces, Durability, Noise, etc., that the Principal believes
to be essential;
• while the issue of Invitations to Tender may be accelerated, the evaluation of tenders
may take longer. Although the preparation of voluminous specifications will not be
required, the evaluation of differing Technical Specifications will require time and effort.
Consequently this should be taken into account in the development of procurement
plans, and that the overall time allowed for the procurement process (up to the
placement of order) may not be significantly different from that needed in a conventional
approach;
• the technical and commercial evaluation of tenders can no longer be conducted as
separate exercises, and with the new methodology, the evaluation must be carried out
jointly by commercial and technical personnel with all details of the tenders, including
price, available to both parties;

• the need for experienced, skilled, technical staff with the maturity and open-mindedness
needed to consider a diversity of responses from potential Manufacturers/Suppliers. The
“Tick Box – Lowest Cost” approach formerly applied to tender evaluation will not work.

If using the Functional Specification approach to procurement, the Principal’s technical

personnel should:

• concentrate on defining all relevant functional or performance requirements of the

equipment or material in question that must be concisely and accurately conveyed
within the framework of the Functional Specification to provide an unambiguous
statement to the Manufacturer/Supplier;

• specify the acceptance criteria which will be applied to the equipment or material during
manufacture and prior to delivery;
• consider evaluation criteria to be applied to enable objective assessment of a diversity
of Technical Specifications. They must have an open mind as to the means by which the
Manufacturer/Supplier proposes to meet the stated requirements and not seek to
impose prescription or preference that would represent a reversion to the traditional
approach.

2.2.3 The Role of the Manufacturer/Supplier

The Functional Specification approach to procurement will enable Manufacturers/Suppliers
to exercise their expertise, judgement and innovative capacity to ensure that the Principal’s
needs, as conveyed by the Functional Specification, are met in the most effective way.
The Manufacturer/Supplier will be required to provide to the Principal as part of his tender a
detailed Technical Specification which states in all essential respects the way in which the
performance requirements conveyed in the Functional Specification will be met. The
provision of a quality plan with the tender is normally an essential requirement.
The Manufacturer/Supplier should accept that the responsibility conveyed by this approach
provides an opportunity which can only be sustained if the design, quality, performance and
safety of the equipment or material meet the Principal’s needs, applicable standards and
legislative requirements.

2.3 GENERAL GUIDANCE

• When should the Functional Specification approach be used?
 Annex A of ISO 13879 is principally aimed at answering this question. Some additional
considerations are:
- It is the Principal who decides when to employ a Functional Specification approach.
Functional Specifications could be used to procure all products, processes, and
services. However, the Principal should consider whether the potential reduced cost
benefits outweigh the inherent risks in using the methodology. Generally for
“commodity” type products the use of Functional Specifications is not worthwhile as
the end result will not vary from that of traditional procurement processes;
- A competent Manufacturer/Supplier is critical. Functional Specification works well in
established oil and gas producing areas with a well-developed Manufacturer/Supplier
base. It should only be used with caution in emerging areas with no developed
Manufacturer/Supplier base.
• Should Industry/International Specifications/Standards be referenced in a Functional
Specification?
In a purely Functional Specification, no. It is the Manufacturer/Supplier who proposes (in
the Technical Specification) what industry/international specifications/standards should
be used. However, where the Principal knows of a standard/specification, the use of
which will result in a product, process, or service meeting the required functionality, then
it should be referenced. This approach is frequently employed when functionally
specifying packaged equipment.
• Who is responsible for the design?
The Manufacturer/Supplier performs the design and is hence responsible for the
correctness of it. However, should the design prove defective in some way and the
resultant product, process, or service not meet the Principal’s needs then there could be
considerable consequential cost impact. It is unlikely that the Manufacturer/Supplier will
be prepared to bear this liability and the risk will, as is usual, reside with the Principal.
The Principal should mitigate this risk by staffing the project with an appropriate level of
technical competence and experience to properly evaluate all proposals.
• What is the biggest risk in using Functional Specifications?
The biggest risk is that the product, process, or service will not meet the Principal’s
needs, i.e., it will not work, either initially or throughout its intended operational life. It is
unlikely that any Manufacturer/Supplier will guarantee performance beyond a standard
warranty period. With Functional Specifications, the Principal’s requirements take the
form of performance parameters. Traditional conformity assessment techniques do not
adequately review the ability of the design to meet these requirements. It is essential
that Principals recognise this and put in place conformity assessment systems that
place a much greater emphasis on product, process, or service design.
3. INTERNATIONAL STANDARDS APPROVED FOR USE

The following standards are approved for use without any Group amendments:
ISO 13879
ISO 13880
ISO 13881
4. REFERENCES

In this PTS, reference is made to the following publications:

NOTE: Unless specifically designated by date, the latest edition of each publication shall be used, together
with any amendments/supplements/revisions thereto.

PETRONAS STANDARDS
Index to PTS publications and standard PTS 00.00.05.05.
specifications
INTERNATIONAL STANDARDS
Petroleum and natural gas industries – Content and ISO 13879
drafting of a functional specification
Petroleum and natural gas industries – Content and ISO 13880
drafting of a technical specification
Petroleum and natural gas industries – Classification ISO 13881
and conformity assessment of products, processes
and services
Issued by:
International Organization for Standardization
1, Rue de Varembé
CH-1211 Geneva 20
Switzerland

NOTE: Copies can also be obtained from national standards organizations