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)

DEP 00.00.07.30-Gen.

December 2000

DESIGN AND ENGINEERING PRACTICE

This document is restricted. Neither the whole nor anypart of this document maybe disclosed to anythird party without the prior written consent of Shell Global Solutions
International B.V. and Shell International Exploration and Production B.V., The Netherlands. The copyright of this document is vested in these companies. All rights reserved.
Neither the whole nor anypart of this document maybe reproduced, stored in anyretrieval system or transmitted in anyform or byanymeans (electronic, mechanical, reprographic,
recording or otherwise) without the prior written consent of the copyright owners.

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PREFACE
DEPs (Design and Engineering Practice) publications reflect the views, at the time of publication, of:

Shell Global Solutions International B.V. (Shell GSI)

and

Shell International Exploration and Production B.V. (SIEP)

and

Shell International Chemicals B.V. (SIC)

and

other Service Companies.

They are based on the experience acquired during their involvement with the design, construction, operation and
maintenance of processing units and facilities, and they are supplemented with the experience of Group Operating
companies. Where appropriate they are based on, or reference is made to, international, regional, national and
industry standards.

The objective is to set the recommended standard for good design and engineering practice applied by Group
companies operating an oil refinery, gas handling installation, chemical plant, oil and gas production facility, or any
other such facility, and thereby to achieve maximum technical and economic benefit from standardization.

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

When Contractors or Manufacturers/Suppliers use DEPs 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 DEPs. If in doubt, the Contractor or Manufacturer/Supplier shall, without detracting
from his o w n responsibility, consult the Principal or its technical advisor.

The right to use DEPs is granted by Shell GSI, SIEP or SIC, in most cases under Service Agreements primarily with
companies of the Royal Dutch/Shell Group and other companies receiving technical advice and services from
Shell GSI, SIEP, SIC or another Group Service Company. Consequently, three categories of users of DEPs can be
distinguished:

1) Operating companies having a Service Agreement with Shell GSI, SIEP, SIC or other Service Company. The
use of DEPs by these operating companies is subject in all respects to the terms and conditions of the
relevant Service Agreement.

2) Other parties who are authorized to use DEPs subject to appropriate contractual arrangements (whether as
part of a Service Agreement or otherwise).

3) Contractors/subcontractors and Manufacturers/Suppliers under a contract with users referred to under 1) or

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, Shell GSI, SIEP
and SIC disclaim 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
DEP, combination of DEPs or any part thereof, even if it is wholly or partly caused by negligence on the part of Shell
GSI, SIEP or other Service Company. The benefit of this disclaimer shall inure in all respects to Shell GSI, SIEP, SIC
and/or any company affiliated to these companies that may issue DEPs or require the use of DEPs.

Without prejudice to any specific terms in respect of confidentiality under relevant contractual arrangements, DEPs
shall not, without the prior written consent of Shell GSI and SIEP, be disclosed by users to any company or person
whomsoever and the DEPs shall be used exclusively for the purpose for which 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 Shell GSI, SIEP or SIC. The copyright of DEPs vests in Shell GSI and SIEP. Users shall arrange for
DEPs to be held in safe custody and Shell GSI, SIEP or SIC may at any time require information satisfactory to them in
order to ascertain how users implement this requirement.

All administrative queries should be directed to the DEP Administrator in Shell GSI.

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TABLE OF CONTENTS
1. INTRODUCTION .................................................................................................4
1.1 SCOPE ..............................................................................................................4
1.2 DISTRIBUTION, INTENDED USE AND REGULATORY CONSIDERATIONS ..............4
1.3 DEFINITIONS ......................................................................................................4
2. FUNCTIONAL SPECIFICATION PHILOSOPHY.....................................................5
2.1 WHY WRITE A FUNCTIONAL SPECIFICATION?....................................................5
2.2 FUNCTIONAL SPECIFICATION METHODOLOGY ..................................................5
2.3 GENERAL GUIDANCE.........................................................................................6
3. INTERNATIONAL STANDARDS APPROVED FOR USE.........................................8
4. REFERENCES.....................................................................................................9

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1. INTRODUCTION

1.1 SCOPE
This new DEP 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 DEP
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 DEP 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 authorised by Shell GSI and SIEP, the distribution of this DEP is confined
to companies forming part of the Royal Dutch/Shell Group or managed by a Group company,
and to Contractors and Manufacturers/Suppliers nominated by them (i.e. the distribution code
is "F" as described in DEP 00.00.05.05-Gen.).
This DEP 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 DEP, 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 DEP 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 DEP 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.

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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 DEP 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;

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• 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:

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- 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.

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3. INTERNATIONAL STANDARDS APPROVED FOR USE

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

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4. REFERENCES

In this DEP, 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.

SHELL STANDARDS
Index to DEP publications and standard DEP 00.00.05.05-Gen.
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

NOTE: Most referenced external standards are available for Shell users on the SWW (Shell Wide Web) at
address http://sww.shell.com/standards/

Last page of this DEP

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