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Seminar on Logistics Cooperation for Stabilization and Reconstruction:

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 Bob Prieto, Senior Vice President
July 28, 2011

Seminar on Logistics Cooperation

for Stabilization and Reconstruction:
Engineering and Reconstruction
Institute for Defense and Business, University of North Carolina at Chapel Hill

Industry Leader
global experience
proven expertise

Fluor Confidential. No Release Except to Institute of Defense and Business.

©2011 Fluor. All Rights Reserved. GV20110547009.indd
Table of Contents

SECTION 1 – PRESENTATION ................................................................................................ 1-1

SECTION 2 – LOGISTICS-AFFECTING ACTIVITIES ................................................................... 2-1

SECTION 3 – EXAMPLE OF FLUOR’S RESPONSE CAPABILITIES .............................................. 3-1

SECTION 4 – CONTACT INFORMATION ................................................................................... 4-1

i GV20110547012.DOCX
Seminar on Logistics Cooperation for Stabilization
and Reconstruction: Engineering and Reconstruction
Institute for Defense and Business, University of North Carolina at Chapel Hill

Bob Prieto
Senior Vice President
July 28, 2011
Fluor Confidential. No Release Except to Institute of Defense and Business.
©2011 Fluor. All Rights Reserved. GV20110547003.pptx 1-1
Overview

 Perspective of presentation
 Phases of a disaster and
broad lessons learned
 Engineering, procurement,
and construction (EPC)
process and how it changes
post disaster
 Logistics-affecting activities
 Recommendations and
things to consider

1-2 GV20110547003.pptx
Perspective of Presentation

 Perspective of a private-sector EPC firm providing

stabilization and post-disaster reconstruction
 Drawn from personal experience and Fluor’s contingency
operations experience
 Takes advantage of accumulated knowledge
Gujarat, India Earthquake Iraq New Water Generation LOGCAP IV

1-3 GV20110547003.pptx
 Personal Perspective

Event Perspective
Gujarat, India earthquake World Economic Forum Engineering Governor

9/11 Chairman of $1 billion, NYC-headquartered engineering firm

Co-chair NYC Partnership and Chamber of Commerce Infrastructure Task Force
SARs APEC Business Advisory Council (U.S. representative appointed by President)

Tsunami Co-founder of Disaster Resource Network

APEC Business Advisory Council (U.S. representative appointed by President)
Bird flu APEC Business Advisory Council (U.S. representative appointed by President)

Supermarket fire, Paraguay Co-founder of Disaster Resource Network

South Asia earthquake Co-founder of Disaster Resource Network

Hurricane Relief, Grenada Co-founder of Disaster Resource Network

Hurricane Katrina Co-founder of Disaster Resource Network

Fluor – FEMA response contractor for temporary housing and public assistance

1-4 GV20110547003.pptx
Fluor’s Perspective

 Post-9/11 Infrastructure Task

Force
 World Economic Forum
Disaster Resource Network
LOGCAP IV

 National Infrastructure GCC

Advisory Council Critical HERC
Infrastructure Resilience FEMA Individual
Assistance
Study Workgroup
Iraq Reconstruction
 Fluor’s Contingency CETAC I & II
Operations AFCAP

LOGCAP II

FEMA Public Assistance

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

GV20110547003.pptx
Contingency Operations Knowledge Packs

1-6 GV20110547003.pptx
Contingency Operations Knowledge Packs:
Project Initiation

1-7 GV20110547003.pptx
Types of Disasters

 Human
– War, civil strife, terrorism
 Natural
– Regional – wind, water, earthquake, geological
 Discrete
– Specific facility
– Human – terrorism, explosion, fire
– Natural – tornado, fire

1-8 GV20110547003.pptx
Phases of a Disaster

 Resist (pre-disaster)
 Response
 Recover and reconstruct
– Enhance resiliency for each phase

Lesson #5 – Today’s highly engineered environment requires

a first responder team that goes beyond the traditional triad
of fire, police and emergency services
– 9/11 Lesson Learned

Risk-taking lesson learned – Litigation constrains

risk-taking in the Response and Recover phases
– 9/11 Lesson Learned

1-9 GV20110547003.pptx
Example of Fluor’s Response Capabilities

Area of Need Specific Need Amount

Contingency-response-experienced labor 24 hours 325
Contingency-response-experienced labor 48 to 72 hours 200
Local labor recently employed 3,000
Temporary power equipment Air transportable 150 MW
Heavy construction equipment available for
U.S. and Canada 737 pieces
mobilization
Regional dump trucks, water trucks, and fuel
Country A 140
trucks

Regional construction equipment and vehicles Country B 88

Regional construction equipment and vehicles Country C 200

Regional service trucks, infrastructure,

Country D 25
construction equipment, and vehicles

1-10 GV20110547003.pptx
Example of Fluor’s Response Capabilities

Area of Need Specific Need Amount

Small tools U.S. depots (2) 10,000
Fuel U.S. depots (2) > 1 million gallons
Consolidation warehouse U.S. 250,000 ft2
Relevant basic ordering agreements CONUS-based vendors 82
Debris grinders for deployment 6
Medical facilities 50-bed facility 9
Includes 500, 2,500 fy2-minimum
Temporary shelters 4,500
tents
Shelters or trailers with self-contained 70 shelters
HVAC and power 55 trailers
Relocatable buildings U.S. 430,000 ft2
Feeding shelters with HVAC 30 x 50 ft 19
5 VSAT
Communication 24 hours 18 satellite phones
8 BGAN terminals

1-11 GV20110547003.pptx
EPC and How it Changes Post Disaster

 Simplified project model

– Inputs, outputs, and project framework
 Disaster-driven changes

1-12 GV20110547003.pptx
Simplified Project Model

Project Environment/Setting

Social/Stakeholder Framework
Business Framework

Project Project
Project
Inputs Construction/Activity
Outputs

Economic/Political
Framework

1-13 GV20110547003.pptx
Traditional Construction Site Considerations

 Project and construction inputs

 Project framework(s)
 Output requirements
 Site-based factors

1-14 GV20110547003.pptx
Global-Scale Project Supply Chain

1-15 GV20110547003.pptx
Simplified Inputs and Outputs

Project

Social/Stakeholder Framework
Environment/Setting
Business Framework

Project Project
Project
Inputs Construction/Activity
Outputs

Labor Completed
Materials Project
Equipment Construction
Economic/Political Waste
Framework

1-16 GV20110547003.pptx
 Major Framework Components

• Project Site
• Geography
• Organized
• Climate
Stakeholders
• Regional
Project • Demographics
Infrastructure
• Cultural/Religious
Environment/Setting

Social/Stakeholder Framework
• Records and
• Ownership Rights
Documentation
• Codes and Standards

Project Business Framework Project

Project
Inputs Construction/Activity
Outputs

Labor Completed
Materials Project
Equipment Construction
Economic/Political Waste
Framework

• Contract • Rule of Law

• Risk Framework • Regulations
• Owners • Financial
• Labor Organizations • Institutions
and Agreements • Project Funding

1-17 GV20110547003.pptx
Site-Based Factors

Project
Construction/Activity

• Site-based factors
• Construction site services
• Esprit de corps/site
culture/sense of purpose
• Know how

1-18 GV20110547003.pptx
Construction Site Services

1-19 GV20110547003.pptx
Construction Site Services

Site
Equipment Services Tools
Equipment and
Repair

Safety
Fuel and and
Lube Consumable
Supplies

\
Parts,
Maintenance,
and Scaffolding
Warehousing

Operator Planning
Training and
Forecasting

1-20 GV20110547003.pptx
Disaster Changes Project Inputs
Labor
• New management skills
• Skilled labor requirements
changed/expanded
• Large unskilled labor pool
mobilization
• Labor sourcing
(Global or select nationals)
Materials
• Material requirements and
sequencing changed
• Quantities disrupted
supply chains
• Challenging logistics
Equipment
• Sourcing
• Maintenance during
construction
• Trained operators
Project Inputs
Knowledge of Post-Disaster Stronger Management
Construction Systems Role
Subcontractor Finance • Commercial transactions
• Labor documentation and
Non-Process Infrastructure
payroll
• Traditional housing, provision,
• Augmented work face
and utility services disrupted or
planning and management
inadequate
• Logistic facilities disrupted or
inadequate
Modified Safety Practices for
Post-Disaster Environment
• Unknown conditions
• Specialized craft training
• Changed work sequences
1-21 GV20110547003.pptx
Disaster Changes Business Framework

Contract
• Scope includes more unknowns and potentially evolving requirements
• Schedule based on potential continuing risk events, degraded labor
Business Framework

productivity, uncertain supply chains, and evolving approval frameworks

• Budgets based on uncertain labor, equipment, and material costs accounting
for competition for constrained resources
• Quality standards must consider risks and intended usage and duration

Risk Framework
• Significantly changed risk profile must be reflected in terms and conditions
Owners
• External funding agencies may assume de facto owner’s role
Labor Organizations and Agreements
• Existing agreements may create barriers to recovery
• Potential for labor strife as external workforce mobilized

1-22 GV20110547003.pptx
 Disaster Changes Project and Environmental
Setting Framework

Project Environment/Setting
Project Site Climate Regional Infrastructure Social Records and
• Constrained access • Adverse climactic • Widespread Infrastructures Documentation
• Denied access conditions impact destruction of regional Disrupted or • Lost records
response activities infrastructures Destroyed • As-builts no longer
• Uncertain
ownership or other (continuing important to response • Housing, medical, meaningful
property rights hurricane season, and reconstruction police, fire, • Property rights not
seasonal extremes (roads and rails sanitation well documented or
Geography of temperature or • Banking and other
washed away, bridges inconsistent with
• Modified precipitation) severely damaged or financial institutions social realities
topography (floods, • Event of scale destroyed, airports (squatter
landslides, or necessitates rendered unusable, populations)
mudslides; construction in destroyed power
earthquake non-traditional time Codes and
generation and
displacement; lava periods (monsoon, Standards
transmission capability,
fields; aftermath of depth of winter, destroyed or degraded • Evolving as a result
military action) peak of summer) potable water of event of scale
• Terrain limits rate of treatment and • Variable – affected
response or distribution capability, by donor/funder
reconstruction degraded wastewater requirements
• Accessibility capability, constrained
constrains available telecom services from
options facility damage)
• Regional infrastructure
inadequate for level
and nature of response
and rebuilding
activities

1-23 GV20110547003.pptx
Disaster Changes Social and
Stakeholder Framework

Organized Stakeholders
• Traditional stakeholder groups dysfunctional

Social/Stakeholder Framework
• Stakeholder objectives evolving
• New stakeholder groups emerging
• National or international stakeholders gain roles to enable or Intervene
Demographics
• Loss and displacement of populations
• Impact of relief, response, and reconstruction populations
• Constraints on construction labor

Cultural/Religious
• Transitional roles often played by cultural or religious groups
• Cultural and religious sensitivities often elevated
• Tribal issues and prerogatives may resurface
Ownership Rights
• Lack of documentation and records
• Conflicting claims
• Formal versus informal rights
• Confiscation in the absence of the rule of law
• Corruption

1-24 GV20110547003.pptx
Disaster Changes Economic and
Political Framework

Rule of Law Financial Institutions Politics

• Confiscation and security • Absent or disrupted • Politics in traditionally
risks elevated due to lack • Emergence of a cash non-political activities
of rule of law economy • Every activity potentially
• Emergency decrees • Difficulty paying suppliers someone’s political
inconsistently interpreted and labor platform
and applied • Long-range planning
Project Funding
• Local laws of efforts begun anew
• Color of money issues
convenience affecting critical
associated with multiple
• Corruption decisions
funding sources and tied
Regulations requirements • Economic development a
core consideration
• Regulations not relevant • Documentation
to situation on ground or requirements evolve • Capacity building may be
act to impede progress an imperative
• Lack of on-the-ground
• Traditional regulations payment capability by Sustainability and
extended to situation for donors Resilience
which they were not • Lack of timeliness of • Life-cycle focus may
designed payments emerge

Economic/Political Framework

1-25 GV20110547003.pptx
Post-Disaster Project and Construction Activity

Changed Project
Framework

Project Variable Output

Changed Project Inputs
Construction/Activity Requirements

Special Challenges

• Debris and reuse

• Psychology
• Liability
• Corruption
• Governmental leadership
and enablement
• Human and construction
safety

1-26 GV20110547003.pptx
Post-Disaster Construction Outputs

Project Outputs

Completed Project
• Temporary
• Transitional
• Permanent
Construction Waste
• Linkage to debris considerations (disposal and
reuse in construction)
• Recycling drivers
Sustainability
• Capacity building
• Economic development
• New industry creation
• Enhanced resiliency
• Lessons learned and best practices

1-27 GV20110547003.pptx
Logistics-Affecting Activities

 Photo tour to set the stage

 Review of logistics-affecting activities

Construction Fleet Modularization Road and Bridge

Maintenance Transport

1-28 GV20110547003.pptx
1-29 GV20110547003.pptx
1-30 GV20110547003.pptx
1-31 GV20110547003.pptx
Logistics-Affecting Activities

 Client capabilities and resources  Global sourcing

 Client-contractor alignment and contract  Sourcing integrity
 Mobilization  Mission-critical, unique equipment sourcing
 Execution plans  Quality of locally procured material
 Project Management Manual  Expediting
 Workshare  Traffic routing and logistics plan
 Design basis  Building permits and consents for temporary
construction and logistical facilities
 Degree of design standardization
 Warehousing
 Prefabrication
 Material security
 Preassembly
 Logistical contract forms
 Modularization
 Construction waste
 Degree of client-furnished materials and
equipment  Less-than-full truckload shipments
 Supplier relationship agreements (SRAs)

1-32 GV20110547003.pptx
Logistics-Affecting Activities (Cont.)

 Road and bridge transport  Vehicle safety

 Oversized shipments  Human remains
 Ocean freight  Communication
 Transportation insurance  In-country logistical institutional
infrastructure
 Port capacity and operations
 Site transport
 Construction equipment
 Staging areas
 Construction fleet maintenance
 Cash flow
 Non-process infrastructure (NPI)
 Anti-corruption and transparency
 Craft training
 Stakeholder engagement
 Small tools
 Change management

1-33 GV20110547003.pptx
Comparative Description of Select
Logistics-Affecting Activities

 Global-scale CAPEX program – leveraged execution and

procurement
– Smaller construction projects not compared
– Programs incorporate best practices out of necessity
 Post-disaster reconstruction

1-34 GV20110547003.pptx
Let’s Go to the Handout…

1-35 GV20110547003.pptx
Client Capabilities and Resources
Global-Scale CAPEX Program
• Client organization is appropriately
resourced or program manager engaged
• Combined team brings necessary
understanding of EPC activities and how
they interact with necessary logistics
considerations
1-36
Post-Disaster Reconstruction
• Client organization may be lacking
resources that understand EPC processes
and how they change in a post-disaster
environment
• Impacts and importance of logistics in a
post-disaster situation may not be
sufficiently understood in client organization
or required resources have not been
engaged
• Client lack of appreciation for nature or
scale of logistical challenges may adversely
impact overall engineering and construction
effort
GV20110547003.pptx
Client-Contractor Alignment and Contract
Global-Scale CAPEX Program
• Pre-established contractual basis reflective
of overall procurement and construction
strategy
• Alignment with owner organization
1-37
Post-Disaster Reconstruction
• Private sector efforts typically in support of
major customers, with flexibility to quickly
execute risk-appropriate contracts
• Public sector efforts effective where prior
contract vehicles exist and alignment
activities have previously occurred (FEMA
and LOGCAP IV)
• Lack of a prior contract impacts efficiency of
logistical commitments being made
• Lack of well-defined responsibilities and
authorities in post-disaster organization
may delay completion of required RACI
charts, creating uncertainties in approval
process for crucial logistics-affecting
activities
GV20110547003.pptx
Mobilization

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Typically recognized and funded activity
• Certain government or aid agency contracts
are task order-based with no provision for
mobilization costs, delaying activities and
commitments to create an efficient logistics
operation

1-38 GV20110547003.pptx
Execution Plans

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Scope-driven baseline • Funding-driven baseline shaped by donor
community or “color of money"

1-39 GV20110547003.pptx
Project Management Manual
Global-Scale CAPEX Program
• Standard go-by template with
client-specific forms, procedures, and
approvals
1-40
Post-Disaster Reconstruction
• Expanded to include forms, procedures,
and approvals linked to funding source
• Procedures may vary by project delivery
approach (direct execution or grant funded);
contracting strategy (design-bid build,
design build); and phase of project
• Added approvals and complexity may
impact logistics chain
GV20110547003.pptx
Workshare

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Global Engineering Centers (GECs) • Funding agencies may drive work to be
workshare limits need to move many performed locally
resources to project location

1-41 GV20110547003.pptx
Design Basis

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Optimized against well-defined owner • Nature of funding sources may constrain
criteria through a formal tollgate process solutions to replace in kind, reducing
opportunities to modify

1-42 GV20110547003.pptx
Degree of Design Standardization

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Maximized to reduce supply chain • Required volumes limit standardization
opportunities

1-43 GV20110547003.pptx
Labor

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Globally and locally sourced – standard HR
systems and processes
• OCONUS mobilization through Mobilization
and Deployment Center (MDC)
• MDC in a Box for other-country national
(OCN) mobilization
– From first speaking to a recruiter to
putting boots on the ground, the
recruitment, training, and
on-boarding process can be
completed in 7 to 8 days

1-44 GV20110547003.pptx
Typical Stabilization and Post-Disaster Labor
Requirements

Fluor Subcontract
Time Personnel Personnel
Contracts/Task Orders Period Mobilized Mobilized
BP MC 252 Incident Response <70 days 8,447 0

LOGCAP IV, TO5 – AOR <120 days 1,480 1,924

LOGCAP IV, TO2 <90 days 64 376

LOGCAP IV, TO4 <60 days 72 248

FEMA Individual Assistance <90 days 1,410 2,190

CETAC I <45 days 50 2,950

CETAC II <60 days 33 1,575

New Power Generation <45 days 50 540

Public Works Water <45 days 50 1,150

1-45 GV20110547003.pptx
Prefabrication

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Maximized to address labor availability and • Initially focused on response-phase needs
cost
• Eliminates shipments of temporary
equipment, materials, and construction
consumables
• Reduces construction waste streams

1-46 GV20110547003.pptx
Pre-assembly

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Maximized to address labor availability and • Initially focused on response-phase needs
cost
• Eliminates shipments of temporary
equipment, materials, and construction
consumables
• Reduces construction waste streams

1-47 GV20110547003.pptx
Modularization
Global-Scale CAPEX Program
• Maximizes benefits associated with
manufacturing efforts, such as those
realized on a smaller scale with
prefabrication and pre-assembly
• Allows parallel construction to shorten
schedules
• Facilitates precommissioning
1-48
Post-Disaster Reconstruction
• Uses constrained by client awareness and
constraining procurement practices
• Site access may be constrained to port
areas and, at later stages, major overland
logistical routes
GV20110547003.pptx
1-49 GV20110547003.pptx
1-50 GV20110547003.pptx
1-51 GV20110547003.pptx
Degree of Client-Furnished Materials
and Equipment
Global-Scale CAPEX Program
• Best practice moving beyond major
equipment to include select construction
bulks, piping, cabling, pumps, motors, and
MCC
• Targeted levels nominally 30 percent
• Necessitates strong materials management
organization as part of expanded program
management contractor (PMC) role
(PMC+)
1-52
Post-Disaster Reconstruction
• Use adequate owner-provided advance
financing limits
• Contracting practices by government limit
PMC+ contracting approaches
• Multiplicity of buyers (lack of sourcing hub)
reduces supply chain efficiency
GV20110547003.pptx
Supplier Relationship Agreements (SRAs)
Global-Scale CAPEX Program
• Maximize use of PMC's SRAs to simplify
supply chain, gain greater assurance on
delivery timeframes, and consolidate
shipments
• High level of pre-transaction information
transferred between buyer and supplier
1-53
Post-Disaster Reconstruction
• Effective use limited to private sector
facilities and clients due to traditional
limitations on competitive procurement and
form of contract for non-private buyers
• High demand drives use of non-traditional
sourcing for which reduced supplier-buyer
information exchange has previously
occurred
GV20110547003.pptx
Cost of Labor and Building Materials in Aceh
Late 2004 to Late 2006

Early Change
Resource Unit (RP) End 2004 Mid-2005 2006 Oct 2006 (%)
Labor 000/day 30 40 50 50 67

Wood million/m3 1.0 1.5 1.9 2.2 120

Cement 000/50kg 20 26 34 37 85

Sand 000/3m3 150 300 300 300 100

Brick each 250 580 700 700 180

*Rp: Indonesian Rupiah

1-54 GV20110547003.pptx
Cost of Labor and Building Materials in Sichuan
Mid 2008 to Mid 2009

Unit Early Change

Resource (RMB) Mid 2008 End 2008 2009 Mid 2009 (%)

Labor Per day 30 60 100 80 167

Brick Each 0.33 0.53 0.55 0.35 6

Cement Per ton 390 460 550 480 23.1

Aggregate Per m3 25 50 55 75 200

Steel Per ton 5,400 3,800 3,600 4,200 22.2

*RMB: Renminbi

1-55 GV20110547003.pptx
Global Sourcing
Global-Scale CAPEX Program
• Leverage of ongoing supplier analysis and
assessment activities consistent with
anticipated business volumes by supply
category and regions
• Appropriate supply sources pre-identified
prior to major program activities
1-56
Post-Disaster Reconstruction
• Expanded sourcing effort to meet required
timeframes and budgets requires
augmented vendor inspection, QA/QC, and
expediting efforts
• Identification of supplies of materials for
construction and required NPI undertaken
for limited number of disaster types and
locations in advance of disaster-limiting
logistics system planning activities
GV20110547003.pptx
Post-Disaster Construction Material Volumes

China’s Wenchuan Earthquake (2008)

Cement, Brick, and Steel
Construction 2008 to 2009 to 2010 to
Materials 2009 2010 2011
Total
Rebuilding
Requirement Shortfall In Earthquake-Stricken Areas

Cement (million tons) 370 53 39 31

35.5
Brick (billion pieces) 2,100,000 (national) 17.8 (national) 3 (national)

Steel (million tons) 37 3 to 3.6 3 to 3.6 3 to 3.6

1-57 GV20110547003.pptx
Supplier Stratification

 Suppliers and subcontractors are critical

to successful project execution
– Materials, equipment, and subcontracted
services are 60 to 70 percent of typical
project’s TIC

 Supplier stratification recognizes supplier

ability to positively impact cost and
schedule, as well as accept and mitigate
risk
– Understanding suppliers’ abilities is essential
to successful execution

 Top-tier contractors and suppliers

recognize core principles
– Successful project execution and client
satisfaction are key factors to securing future
engagements
– A single project is only one element of a
much larger business relationship

1-58 GV20110547003.pptx
Sourcing Integrity

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Pre-acquisition surveys confirm
environmental, labor, and legal compliance
by supply base
• Local supply capabilities well defined and
capacity building undertaken off a known
base
• Supply origins for certain bulk materials
(timber) and their preparation or treatment
for use may be difficult to ascertain
• Compliance with global procurement norms
harder to police at the subcontractor level

1-59 GV20110547003.pptx
Mission-Critical, Unique Equipment Sourcing
Global-Scale CAPEX Program
• Traditional long-lead items procured
through early funding commitments
1-60
Post-Disaster Reconstruction
• Supply chain compression activities may
include:
– New sources of supply
– Multi-vendor awards
– Use of CFM as feedstock to selected
vendors
– Phased procurement and pricing
– Expedited transport (Aeroflot)
GV20110547003.pptx
Mission-Critical, Unique Equipment Sourcing

Air Charter for a Power Distribution Center Building

Loading on an Antonov AN124

1-61 GV20110547003.pptx
Quality of Locally Procured Material

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Standard vendor qualification and • May take physical possession, but not title,
inspection programs at end of inspection line to prevent material
• Material (batch) inspections substitution further straining overall
logistical chain

1-62 GV20110547003.pptx
Expediting

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Focused on baseline schedule execution • Reflect evolving needs and on-the-ground
conditions

1-63 GV20110547003.pptx
Traffic Routing and Logistics Plan
Global-Scale CAPEX Program
• Focused on baseline schedule execution
1-64
Post-Disaster Reconstruction
• Reflect evolving needs and on-the-ground
conditions
• Consider evolving condition of transport
routes and other logistics facilities
• Increased number of logistics choke points
and greater competition for logistics
capabilities
GV20110547003.pptx
Building Permits and Consents for Temporary
Construction and Logistical Facilities

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Routine activity
• Government capacity may be inadequate
given widespread damage and competing
demands for permits
• Delay of logistical and temporary
construction facilities may result
• Mechanisms for waivers may not exist

1-65 GV20110547003.pptx
Warehousing
Global-Scale CAPEX Program
• Consistent with higher CFM
1-66
Post-Disaster Reconstruction
• More limited CFM and shortages of labor
and materials may make warehousing a
lower priority facility
• Inability to reliably implement a just-in-time
supply chain can make warehousing an
even more significant activity
• Warehousing may need to be located closer
to site of reconstruction activities because
of weakened local logistics networks
GV20110547003.pptx
Material Security

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Warehouse and lay-down areas typically • Augmented security
have controlled access and routine security • Perimeter patrols
• Larger guard force

1-67 GV20110547003.pptx
Trafficking

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Most contractors rely on supplier to ship • Key link in supply chain management as
goods logistical system responds to stress and
• Supplier not expert reconfigures post-disaster
– Materials arrive late, or worse,
damaged because the supplier went
with the low-cost shipper, without
checking quality and safety records
• Fluor controls delivery
– Use companies that have good
tracking (GPS) and dispatching
capabilities
– Can change routes or even delivery
locations as the situation dictates

1-68 GV20110547003.pptx
Logistical Contract Forms
Global-Scale CAPEX Program
• Generally industry standard
1-69
Post-Disaster Reconstruction
• Special requirements to address changed
shipper risks:
– Demurrage
– Labor strife
– Excess wear and tear
– Lost productivity
– Availability of fuel
– Security
GV20110547003.pptx
Construction Waste

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Seek to minimize volumes generated • Expanded volumes associated with site
(25 percent of construction materials are debris
waste) • High mixed waste
• Minimize mixed waste • Potential need to classify portions as
• Recycle hazardous waste

1-70 GV20110547003.pptx
Less-Than-Full Truckload Shipments

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Limited attention beyond CFM volumes • Logistically expensive, especially where
possession times or number of shipments
are effectively rationed

1-71 GV20110547003.pptx
Staging Areas

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Staging area at port or key local hub
• Staging and warehouse area at or near site
• Inefficient supply chains may exacerbate
staging area needs
• Out-of-zone staging process utilized to
control flow into valuable shipping space
and routes

1-72 GV20110547003.pptx
Road and Bridge Transport

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Conditions and capacities generally well • Conditions and capacities unknown
understood • Significant degradation may not be evident

1-73 GV20110547003.pptx
Oversized Shipments

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Limited to high-value equipment and • Logistics constraints may cause shipment
modules sizes to be constrained, increasing volumes
• Platooned where possible shipped and associated labor requirements

1-74 GV20110547003.pptx
Ocean Freight

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Heavy lift needs identified in conjunction • Competition for vessels or harbor
with long-lead and modularization planning constraints may drive undesirable load
sizes and combinations

1-75 GV20110547003.pptx
Transportation Insurance

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Generally industry standard • Unavailability and cost or coverage
limitations may affect logistics choices

1-76 GV20110547003.pptx
Port Capacity and Operations

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Often saturated by global-scale programs
• May necessitate separate material handling
wharfs
• Traditional challenges scaled up and
potentially impacted by damage at the port
• Cargo handling operations may be
overwhelmed by lack of coordinated
prioritization of needs

1-77 GV20110547003.pptx
Construction Equipment

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Lease-versus-buy decisions intermittently
constrained by availability
• Specialized equipment identified at early
stage
• Competition for equipment may drive less
than desirable ownership decisions
• Most efficient equipment may not be
available
• Shortages of major equipment operators

1-78 GV20110547003.pptx
Construction Fleet Maintenance

Global-Scale CAPEX Program Post-Disaster Reconstruction

• May be delivered as part of PMC+ services
• Fueling operations may best be done as a
client-furnished service
• Fuel logistics may be critical challenge
• Increased maintenance requirements
associated with difficult site conditions may
necessitate larger fleet sizes
• Fuel supply is critical resource during early
phases

1-79 GV20110547003.pptx
Non-Process Infrastructure (NPI)
Global-Scale CAPEX Program
• Growing challenge
• Increased use of modular camp and
ancillary facilities
• Requires early site access
• Site power and water may be met from
nearby networks in many instances or
temporary generators or treatment plants
elsewhere
1-80
Post-Disaster Reconstruction
• Meeting the NPI challenge may be
constrained by site access (transport or
site-based debris) and community
perceptions
• Competition for generators and water
treatment may limit rates of certain
construction activities
GV20110547003.pptx
1-81 GV20110547003.pptx
Craft Training
Global-Scale CAPEX Program
• Skills, construction safety, and process
safety training focused on labor force are
intended to serve program's needs
• Consistent safety culture across program
reinforces safety
1-82
Post-Disaster Reconstruction
• Training expanded to include increased
awareness of hazards associated with prior
destruction and any ongoing risk conditions
• Multiple client and contractor structures
without strong program control undermine
efforts to build safety culture
• Local labor force may move between
contractors more frequently, diminishing the
training investment made by any one
contractor (no overall program focus)
GV20110547003.pptx
Small Tools

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Implement program-wide small tools • Small tools program a requirement to
program to control cost, reduce theft, and address shortages and expanded workforce
improve safety

1-83 GV20110547003.pptx
Vehicle Safety

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Driver certification and safe driving • Difficulties may be encountered in driver
program certification and training, given competition
• Reduced accidents support increased for limited supply
logistics availability

1-84 GV20110547003.pptx
Human Remains

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Not typically encountered • Protocols put in place and may cause
partial site shutdown and reconfigured site
or supply chain logistics

1-85 GV20110547003.pptx
Communication

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Utilize regional communication networks • Regional communication networks may be
and supplement with site-based unavailable or degraded, impacting
communications as needed efficiency of supply chain operations

1-86 GV20110547003.pptx
In-Country Logistical Institutional Infrastructure

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Policies defined: • Institutional frameworks may be
– Imports and duties inappropriate for post-disaster response
and rebuilding
– Weight limits
– Packaging requirements
• Institutional frameworks for modification
may be absent, contributing to logistical
– Rules of origin chain ineffectiveness or uncertainty
– Required documentation
– Typical approval timeframes
• Agency roles understood (even if
inefficient)

1-87 GV20110547003.pptx
Site Transport

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Typically bus transport from site gate or • Local transport may be dysfunctional
construction camp • Travel times for critical specialty labor may
• Local transport, if available necessitate increased helicopter operations

1-88 GV20110547003.pptx
Cash Flow

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Positive cash flow or minimum working • The need to bridge cash requirements of
capital needs do not influence logistical subcontractors makes payment terms an
decision making increasingly important selection factor in
sourcing decisions

1-89 GV20110547003.pptx
Anticorruption and Transparency

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Required business process
• Risks greatly increase, and monitoring and
surveillance become larger activities
• May impact sources of supply, logistic
routes, and ports of entry
• May necessitate increased security in
logistics chain

1-90 GV20110547003.pptx
Stakeholder Engagement
Global-Scale CAPEX Program
• Keep stakeholders informed in advance of
logistics activities impacting local or
regional transportation networks
1-91
Post-Disaster Reconstruction
• Changed stakeholder groups, priorities, and
communication difficulties impact the
effective communication of planned logistic
activities that affect local and regional
networks
• Stakeholder impacts may be exacerbated
by difficulties in stakeholder engagement
GV20110547003.pptx
Change Management

Global-Scale CAPEX Program Post-Disaster Reconstruction

• Critical activity for efficient supply chain • Impacts of change magnified in logistics
operations chain post disaster

1-92 GV20110547003.pptx
What is Possible

 Milliken Fire Rebuild

 Confidential Chemical Client 2011 Tornado
Rebuild
 FEMA Individual Assistance Hurricane Katrina
Response
 FEMA Public Assistance (PA) Technical
Assistance Contract (TAC)
 Logistics Civil Augmentation Program
(LOGCAP) IV
 Kuwait Oil Company Fire Rebuild
 American Sugar Refining (Domino) Flood
Response

1-93 GV20110547003.pptx
Milliken Fire Rebuild

January 31, 1995

 Rebuilt 700,000-square-foot carpet
manufacturing plant in 181 days –
record time
 Lost in fire:
– All process and facilities engineering
drawings
– One-of-a-kind, high-tech dyeing lines
– Long-lead European process
equipment
 Fluor provided: July 31, 1995
– Program management
– Equipment expediting and installation
– Process and facility design using 3D
and 2D CAD
– Quality management – 3,000 feet of
underground, stainless-steel pipe with
zero weld defects
– Excellent safety management
– 2.5 million hours with only
3 recordables

1-94 GV20110547003.pptx
Confidential Chemical Client
2011 Tornado Rebuild

 Rapid response team onsite

within 24 hours
– Entire team was in place and
ready to start work only four
days after the storm
 Successfully repaired the facility
within 24 days
 Restarted manufacturing lines
during Days 11 to 19 of the
rebuild
 Leveraged strategic supplier
relationships and procurement
network to cut weeks off the
completion date

1-95 GV20110547003.pptx
FEMA Individual Assistance Hurricane Katrina
Response

 Deployed an initial team of 500 personnel

within 72 hours

1-96 GV20110547003.pptx
FEMA Individual Assistance Hurricane Katrina
Response

 Provided project management,

engineering, procurement,
construction, and maintenance
services to temporarily house
160,000 displaced residents
 Installed 55,000 housing
units in one year
 9 million safe workhours

1-97 GV20110547003.pptx
FEMA Public Assistance Technical Assistance
Contract

 Since 1997, have provided rapid

deployment program management
and technical engineering
assistance to support disaster
recovery operations
– 43 states and 6 U.S. territories.
 Disasters responded to in
48 hours include:
– 23 hurricanes
– 80 floods
– 33 tornados
– 40 snow/winter storms
– 9 landslides
– 5 typhoons
– 7 tropical storms
– 6 fires
– 7 earthquakes
– 1 drought

1-98 GV20110547003.pptx
LOGCAP

 Task Orders (TOs) 2 & 4: Multifunctional base life support,

combat services support, and construction/expansion of
forward operating bases (FOBs) at 12 sites
 TO5: Multifunctional base life support, combat services
support, and construction/expansion services for more
than 60 FOBs
– More than 18,000 employees, subcontractors, and Afghans
deployed
 Additional 8 sites in the planning and/or pre-execution phase

1-99 GV20110547003.pptx
LOGCAP

1-100 GV20110547003.pptx
LOGCAP TO2 Overview

Services
 Construction of force providers
 Design-build and minor construction
 Facilities management and O&M
Bagram
 Roads and grounds Joyce

 Latrines, ablution, and porta-potties

Shank
 Service orders Airborne

 Hazardous waste management and storage Altimur

 Insect, rodent, and feral animal control

 Laundry services
 Dining facilities
 Morale, welfare, and recreation
 Power generation and electrical distribution Site Locations
 Non-tactical vehicle maintenance  Bagram – Contractor support office (CSO)
 Fire protection services  FOB Joyce
 Solid- and liquid-waste management  FOB Shank
 Fuels  FOB Altimur
 Afghan First Program  FOB Airborne

1-101 GV20110547003.pptx
 LOGCAP TO4 Overview

Services
 Construction of force providers and
Harvest Falcons
 Design-build and minor construction
FOB Leatherneck
 Facilities management and O&M
FOB Frontenac FOB Wolverine  Transportation services and vehicle fleet
FOB support
Leatherneck FOB Kandahar
FOB Ramrod  Housing accommodations and office
FOB Spin Boldak units
FOB Dwyer
 Food and laundry service
 Security
 IT support
Site Locations  Satellite (SAT) and local network cell
 Kandahar—CSO  FOB Ramrod phones

 FOB Kandahar  FOB Dwyer  Supply support

 FOB Tarin Kowt  FOB Wolverine  Insect, rodent, and feral animal control

 FOB Leatherneck  FOB Spin Boldak  Government property management

 FOB Frontenac  Engineering design support

 Afghan First program

1-102 GV20110547003.pptx
LOGCAP TO5 Overview
More than 60 Sites throughout
Northern Afghanistan
 Supports 84,700 military employees
and contractors
 More than $56 million pumped back
into Afghan economy annually
 First ever transition of this magnitude in
a contingency environment
 6 major supply hubs throughout region
1-103
In a Given Month, Fluor:
 Serves more than 4 million meals
 Responds to 13,300 service orders
 Distributes 34 million gallons of water
 Services 29,733 HVAC units and
1,883 power generation units
 Distributes 15.7 million gallons of fuel
 Washes 159,438 bags of laundry
 Flies 152,420 kilograms of cargo in
504 missions
 Serves 525,623 patrons in 34 Internet
cafes; 25 recreation centers; and
56 fitness facilities
GV20110547003.pptx
Kuwait Oil Company Fire Rebuild

April 2003
 Fire destroyed 80 percent of the
facilities of an oil gathering and
processing center
– During preparation and invasion
of Iraq

 Maximized local equipment

suppliers
– Port logistics constrained October 2004
– Expedited procurement

 Completed project under budget

in 18 months instead of 24 months
 Instituted safety culture –
recordable-free construction

1-104 GV20110547003.pptx
American Sugar Refining (Domino)
Flood Response

 Hurricane Katrina floodwaters

inundated refinery
– 15 buildings with 8 feet of water
– 6.5 million pounds of sugar
melted on the floor
 19 percent of the nation's cane
sugar passes through this
refinery
 Plant reopened in just 98 days

1-105 GV20110547003.pptx
Recommendations and Things to Consider

 Government and NGO community must plan for assisting

in post-disaster recovery
– Provide accessibility to the sites of critical infrastructure
– Maintain awareness of global logistics chain
– Ensure availability of specialized construction equipment,
contracts, and materials
– Develop well-documented system with clear interface points
– Preplan and rehearse response and recovery scenarios for
high-probability events
 Earthquake
 Hurricane
 Flood

1-106 GV20110547003.pptx
Recommendations and Things to Consider

 Engagement with engineering and construction community

must begin pre-disaster
– Pre-placed contracts
 Program management
 EPC
 Supply chain
– Earliest mobilization to disaster zone
– Early activation of logistics chains

1-107 GV20110547003.pptx
Recommendations and Things to Consider

 Post-disaster period requires streamlined decision

frameworks
– Decision authorities at project and disaster site
– Logistical-affecting processes may act as barrier in
post-disaster scenario
 Examples are customs, building permits, and liability legislation
 Consider a standard “modified” logistical template for local
government consideration
• “Go-bys”
• Best practices

1-108 GV20110547003.pptx
 Logistics-Affecting Activities are Modified Post Disaster
Logistics- Global Scale CAPEX Program -
Affecting Leveraged Execution and
Activities Procurement Post-Disaster Reconstruction
Client  Client organization is appropriately  Client organization may be lacking
capabilities and resourced or program manager resources that understand EPC
resources engaged processes and how they change in a
 Combined team brings necessary post-disaster environment
understanding of EPC activities and  Impacts and importance of logistics
how they interact with necessary in a post-disaster situation may not
logistics considerations be sufficiently understood in client
organization or required resources
have not been engaged
 Client lack of appreciation for nature
or scale of logistical challenges may
adversely impact overall engineering
and construction effort
Client-  Pre-established contractual basis  Private sector efforts typically in
contractor reflective of overall procurement and support of major customers, with
alignment and construction strategy flexibility to quickly execute
contract  Alignment with owner organization risk-appropriate contracts
 Public sector efforts effective where
prior contract vehicles exist and
alignment activities have previously
occurred (FEMA and LOGCAP IV)
 Lack of a prior contract impacts
efficiency of logistical commitments
being made
 Lack of well-defined responsibilities
and authorities in post-disaster
organization may delay completion
of required RACI charts, creating
uncertainties in approval process for
crucial logistics-affecting activities
2-1
Recommendations for Post-Disaster
Management
 Client organizations must recognize
that the linkage between end use
and shipping and other logistical
activities grows in importance in a
post disaster situation
 Prepositioned contracts with
experienced post-disaster
construction contractors that have
strong logistics capabilities provide
owner organizations with the
capability to efficiently respond and
recover
 Prepositioned contracts allow for
pre-disaster alignment around basic
work processes, allocation of
responsibilities, and delegated and
retained authorities and approvals
 Supply chain and logistical strategies
can be discussed, and the new first
responder in today's built
environment can participate in select
tabletop exercises
GV20110547005.DOCX
 Logistics- Global Scale CAPEX Program -
Affecting Leveraged Execution and Recommendations for Post-Disaster
Activities Procurement Post-Disaster Reconstruction Management
Mobilization  Typically recognized and funded  Certain government or aid agency  Create a limited mobilization task in
activity contracts are task order-based with prepositioned contracts to accelerate
no provision for mobilization costs, response timeframes
delaying activities and commitments
to create an efficient logistics
operation
Execution  Scope-driven baseline  Funding-driven baseline shaped by  Clearly identify any
plans donor community or “color of funding-source-linked requirements
money" at earliest possible stage
 Select major donor organization
requirements can be pre-identified in
prepositioned contracts (examples:
FEMA Public Assistance, State
Emergency Management, Red
Cross)
Project  Standard go-by template with  Expanded to include forms,  Prepositioned contracts allow for
Management client-specific forms, procedures, procedures, and approvals linked to pre-disaster alignment around basic
Manual and approvals funding source work processes and reports
 Procedures may vary by project  Critical logistical hubs and choke
delivery approach (direct execution points can be pre-identified
or grant funded); contracting
strategy (design-bid build, design
build); and phase of project
 Added approvals and complexity
may impact logistics chain
Workshare  Global Engineering Centers (GECs)  Funding agencies may drive work to  Local engineering and construction
workshare limits need to move many be performed locally resource surveys may be periodically
resources to project location conducted as part of prepositioned
contract

2-2 GV20110547005.DOCX
 Logistics- Global Scale CAPEX Program -
Affecting Leveraged Execution and Recommendations for Post-Disaster
Activities Procurement Post-Disaster Reconstruction Management
Design basis  Optimized against well-defined  Nature of funding sources may  Existing planning documents should
owner criteria through a formal constrain solutions to replace in be inventoried and collected to
tollgate process kind, reducing opportunities to accelerate reconstruction planning
modify supply chain  Efforts focused on achieving plans
versus creating entirely new ones
where possible
 Planning collection in advance of
disaster also facilitates resiliency
reviews by local disaster planning
agencies
Degree of  Maximized to reduce supply chain  Required volumes limit  Incorporate resiliency features as
design standardization opportunities part of new design basis
standardization
Labor  Globally and locally sourced –  OCONUS mobilization through  Client organization must ensure
standard HR systems and Mobilization and Deployment Center response and reconstruction
processes (MDC) contractors have well developed
 MDC in a Box for other-country mobilization plans and capabilities
national (OCN) mobilization
– From first speaking to a recruiter
to a putting boots on the ground,
the recruitment, training, and
on-boarding process can be
completed in 7 to 8 days
Prefabrication  Maximized to address labor  Initially focused on response-phase  Identify staging and prefabrication
availability and cost needs sites in proximity to critical
 Eliminates shipments of temporary infrastructure and population centers
equipment, materials, and  Identify similar regional areas outside
construction consumables the evaluated zone
 Reduces construction waste
streams

2-3 GV20110547005.DOCX
 Logistics- Global Scale CAPEX Program -
Affecting Leveraged Execution and
Activities Procurement
Pre-assembly  Maximized to address labor
availability and cost
 Eliminates shipments of temporary
equipment, materials, and
construction consumables
 Reduces construction waste
streams
Modularization  Maximizes benefits associated with
manufacturing efforts, such as those
realized on a smaller scale with
prefabrication and pre-assembly
 Allows parallel construction to
shorten schedules
 Facilitates precommissioning
Degree of  Best practice moving beyond major
client-furnished equipment to include select
materials and construction bulks, piping, cabling,
equipment pumps, motors, and MCC
 Targeted levels nominally
30 percent
 Necessitates strong materials
management organization as part of
expanded program management
contractor (PMC) role (PMC+)
Supplier  Maximize use of PMC's SRAs to
relationship simplify supply chain, gain greater
agreements assurance on delivery timeframes,
(SRAs) and consolidate shipments
 High level of pre-transaction
information transferred between
buyer and supplier
Post-Disaster Reconstruction
 Typically limited by funding linkages
to job creation in affected area
 May be constrained by access route
constraints
 Uses constrained by client
awareness and constraining
procurement practices
 Site access may be constrained to
port areas and, at later stages,
major overland logistical routes
 Use adequate owner-provided
advance financing limits
 Contracting practices by
government limit PMC+ contracting
approaches
 Multiplicity of buyers (lack of
sourcing hub) reduces supply chain
efficiency
 Effective use limited to private
sector facilities and clients due to
traditional limitations on competitive
procurement and form of contract for
non-private buyers
 High demand drives use of
non-traditional sourcing for which
reduced supplier-buyer information
exchange has previously occurred
2-4
Recommendations for Post-Disaster
Management
 Identify staging and prefabrication
sites in proximity to critical
infrastructure and population centers
 Identify similar regional areas outside
the evaluated zone
 Identify major access routes and
weight and size constraints as part of
disaster planning efforts
 Identify staging and prefabrication
sites in proximity to critical
infrastructure and population centers
 Identify similar regional areas outside
the evaluated zone
 Identify major access routes and
weight and size constraints as part of
disaster planning efforts.
 Prepositioned response and
reconstruction contracts should
provide for use of commercial
practices to the maximum extent
possible
 Contractors with well-developed
supply chains are essential in
post-disaster settings
 Prepositioned response and
reconstruction contracts should
provide for use of commercial
practices to the maximum extent
possible
 Contractors with well-developed
supply chains are essential in
post-disaster settings
GV20110547005.DOCX
 Logistics- Global Scale CAPEX Program -
Affecting Leveraged Execution and
Activities Procurement
Global sourcing  Leverage of ongoing supplier
analysis and assessment activities
consistent with anticipated business
volumes by supply category and
regions
 Appropriate supply sources
pre-identified prior to major program
activities
Sourcing  Pre-acquisition surveys confirm
integrity environmental, labor, and legal
compliance by supply base
 Local supply capabilities well
defined and capacity building
undertaken off a known base
Mission-critical,  Traditional long-lead items procured
unique through early funding commitments
equipment
sourcing
Quality of  Standard vendor qualification and
locally inspection programs
procured  Material (batch) inspections
material
Post-Disaster Reconstruction
 Expanded sourcing effort to meet
required timeframes and budgets
requires augmented vendor
inspection, QA/QC, and expediting
efforts
 Identification of supplies of materials
for construction and required
non-process infrastructure (NPI)
undertaken for limited number of
disaster types and locations in
advance of disaster-limiting logistics
system planning activities
 Supply origins for certain bulk
materials (timber) and their
preparation or treatment for use may
be difficult to ascertain
 Compliance with global procurement
norms harder to police at the
subcontractor level
 Supply chain compression activities
may include:
– New sources of supply
– Multi-vendor awards
– Use of CFM as feedstock to
selected vendors
– Phased procurement and pricing
– Expedited transport (Aeroflot)
 May take physical possession, but
not title, at end of inspection line to
prevent material substitution
further straining overall logistical
chain
2-5
Recommendations for Post-Disaster
Management
 Periodic assessments should be
made of basic construction material
availability for a range of disasters
(local, regional, multi-regional)
 Best-value procurement, with strong
quality and inspection efforts,
produces more consistent and timely
outcomes and, at the end of the day,
the most cost-effective outcome, all
costs considered
 Prepositioned response and
reconstruction contracts should
provide for use of commercial
practices to the maximum extent
possible
 Contractors with well-developed
supply chains are essential in
post-disaster settings
 Strained logistical chains require the
right shipments, at the right time, to
the right place
 Poor quality and associated
back-shipment and rework or
workarounds strain an already
over-taxed supply chain
GV20110547005.DOCX
 Logistics- Global Scale CAPEX Program -
Affecting Leveraged Execution and
Activities Procurement Post-Disaster Reconstruction
Expediting  Focused on baseline schedule  Reflect evolving needs and
execution on-the-ground conditions
Traffic routing  Focused on baseline schedule  Reflect evolving needs and
and logistics execution on-the-ground conditions
plan  Consider evolving condition of
transport routes and other logistics
facilities
 Increased number of logistics choke
points and greater competition for
logistics capabilities
Building  Routine activity  Government capacity may be
permits and inadequate given widespread
consents for damage and competing demands
temporary for permits
construction  Delay of logistical and temporary
and logistical construction facilities may result
facilities  Mechanisms for waivers may not
exist
Warehousing  Consistent with higher CFM  More limited CFM and shortages of
labor and materials may make
warehousing a lower priority facility
 Inability to reliably implement a
just-in-time supply chain can make
warehousing an even more
significant activity
 Warehousing may need to be
located closer to site of
reconstruction activities because of
weakened local logistics networks
Material  Warehouse and lay-down areas  Augmented security
security typically have controlled access and  Perimeter patrols
routine security  Larger guard force
2-6
Recommendations for Post-Disaster
Management
 Trafficking into the disaster area
should not be left to inexperienced
suppliers buying shipment services
on a low-cost and uncoordinated
basis
 Trafficking into the disaster area
should not be left to inexperienced
suppliers buying shipment services
on a low-cost and uncoordinated
basis
 Identify and put in place an
expedited process for temporary or
transitional facilities after a declared
disaster
 Mechanisms to identify vacant,
large-scale commercial facilities
equipped to receive and warehouse
equipment and materials should be
pre-established (Examples: vacant
"big box" stores, warehouses, and
supermarkets)
 Pre-establish badging requirements
and requirements for security or
auxiliary police
GV20110547005.DOCX
 Logistics- Global Scale CAPEX Program -
Affecting Leveraged Execution and
Activities Procurement
Trafficking  Most contractors rely on supplier to
ship goods
 Supplier not expert
– Materials arrive late, or worse,
damaged because the supplier
went with the low-cost shipper,
without checking quality and
safety records
 Fluor controls delivery
– Use companies that have good
tracking (GPS) and dispatching
capabilities
– Can change routes or even
delivery locations as the situation
dictates
Logistical  Generally industry standard
contract forms
Construction  Seek to minimize volumes
waste generated (25 percent of
construction materials are waste)
 Minimize mixed waste
 Recycle
Less-than-full  Limited attention beyond CFM
truckload volumes
shipments
Post-Disaster Reconstruction
 Key link in supply chain
management as logistical system
responds to stress and reconfigures
post-disaster
 Special requirements to address
changed shipper risks:
– Demurrage
– Labor strife
– Excess wear and tear
– Lost productivity
– Availability of fuel
– Security
 Expanded volumes associated with
site debris
 High mixed waste
 Potential need to classify portions as
hazardous waste
 Logistically expensive, especially
where possession times or number
of shipments are effectively rationed
2-7
Recommendations for Post-Disaster
Management
 Trafficking into the disaster area
should not be left to inexperienced
suppliers buying shipment services
on a low-cost and uncoordinated
basis
 Strategies for changed logistical risk
management should be
pre-assessed and decisions made
on types of risk best retained
 Pre-identification of temporary and
permanent debris storage locations
and preferred logistical movements
associated with debris handling for a
range of total impacts
 Trafficking into the disaster area
should not be left to inexperienced
suppliers buying shipment services
on a low-cost and uncoordinated
basis
GV20110547005.DOCX
 Logistics- Global Scale CAPEX Program -
Affecting Leveraged Execution and Recommendations for Post-Disaster
Activities Procurement Post-Disaster Reconstruction Management
Staging areas  Staging area at port or key local hub  Inefficient supply chains may  Identify staging and prefabrication
 Staging and warehouse area at or exacerbate staging area needs sites in proximity to critical
near site  Out-of-zone staging process utilized infrastructure and population centers
to control flow into valuable shipping  Identify similar regional areas outside
space and routes the evaluated zone
 Identify major access routes and
weight and size constraints as part of
disaster planning efforts
Road and  Conditions and capacities generally  Conditions and capacities unknown  Preposition a structural assessment
bridge well understood  Significant degradation may not be contract for critical logistical
transport evident infrastructure to provide early
information of logistical degradation
of any form
Oversized  Limited to high-value equipment and  Logistics constraints may cause  Client organizations must recognize
shipments modules shipment sizes to be constrained, that the linkage between end use
 Platooned where possible increasing volumes shipped and and shipping and other logistical
associated labor requirements activities grows in importance in a
post-disaster situation
 Prepositioned contracts, with
experienced post-disaster
construction contractors who have
strong logistics capabilities, provide
owner organizations with the
capability to efficiently respond and
recover

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 Logistics- Global Scale CAPEX Program -
Affecting Leveraged Execution and Recommendations for Post-Disaster
Activities Procurement Post-Disaster Reconstruction Management
Ocean freight  Heavy lift needs identified in  Competition for vessels or harbor  Client organizations must recognize
conjunction with long-lead and constraints may drive undesirable that the linkage between end use
modularization planning load sizes and combinations and shipping and other logistical
activities grows in importance in a
post-disaster situation
 Prepositioned contracts, with
experienced post-disaster
construction contractors who have
strong logistics capabilities, provide
owner organizations with the
capability to efficiently respond and
recover
Transportation  Generally industry standard  Unavailability and cost or coverage  Strategies for changed logistical risk
insurance limitations may affect logistics management should be
choices pre-assessed and decisions made
on types of risk best retained
Port capacity  Often saturated by global-scale  Traditional challenges scaled up and  Preposition a structural assessment
and operations programs potentially impacted by damage at contract for critical logistical
 May necessitate separate material the port infrastructure to provide early
handling wharfs  Cargo handling operations may be information of logistical degradation
overwhelmed by lack of coordinated of any form
prioritization of needs  Trafficking into the disaster area
should not be left to inexperienced
suppliers operating on an
uncoordinated basis
Construction  Lease-versus-buy decisions  Competition for equipment may  Local construction equipment
equipment intermittently constrained by drive less than desirable ownership resource surveys may be periodically
availability decisions conducted as part of prepositioned
 Specialized equipment identified at  Most efficient equipment may not be contract
early stage available
 Shortages of major equipment
operators

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 Logistics- Global Scale CAPEX Program -
Affecting Leveraged Execution and
Activities Procurement
Construction  May be delivered as part of PMC+
fleet services
maintenance  Fueling operations may best be
done as a client-furnished service
 Fuel logistics may be critical
challenge
Non-process  Growing challenge
infrastructure  Increased use of modular camp and
(NPI) ancillary facilities
 Requires early site access
 Site power and water may be met
from nearby networks in many
instances or temporary generators
or treatment plants elsewhere
Craft training  Skills, construction safety, and
process safety training focused on
labor force are intended to serve
program's needs
 Consistent safety culture across
program reinforces safety
Small tools  Implement program-wide small tools
program to control cost, reduce
theft, and improve safety
Vehicle safety  Driver certification and safe driving
program
 Reduced accidents support
increased logistics availability
Post-Disaster Reconstruction
 Increased maintenance
requirements associated with
difficult site conditions may
necessitate larger fleet sizes
 Fuel supply is critical resource
during early phases
 Meeting the NPI challenge may be
constrained by site access
(transport or site-based debris) and
community perceptions
 Competition for generators and
water treatment may limit rates of
certain construction activities
 Training expanded to include
increased awareness of hazards
associated with prior destruction and
any ongoing risk conditions
 Multiple client and contractor
structures without strong program
control undermine efforts to build
safety culture
 Local labor force may move
between contractors more
frequently, diminishing the training
investment made by any one
contractor (no overall program
focus)
 Small tools program a requirement
to address shortages and expanded
workforce
 Difficulties may be encountered in
driver certification and training,
given competition for limited supply
2-10
Recommendations for Post-Disaster
Management
 Local construction equipment
resource surveys may be periodically
conducted as part of prepositioned
contract
 Identify NPI requirements for a range
of disasters (scale and type) as part
of prepositioned contract activities
 Identify gaps in existing capacity
 Develop post-disaster craft training
program template for likely
post-disaster conditions to be
encountered
 Emergency authorities to include a
mandate for safety
 Prepositioned contractor should have
an in-place, small tools capability to
foster response and reconstruction
activities
 Strengthened driver inspection
program as part of materials receipt
process
GV20110547005.DOCX
 Logistics- Global Scale CAPEX Program -
Affecting Leveraged Execution and Recommendations for Post-Disaster
Activities Procurement Post-Disaster Reconstruction Management
Human  Not typically encountered  Protocols put in place and may  Defined program for human remain
remains cause partial site shutdown and recovery, with clearly assigned
reconfigured site or supply chain responsibilities and augmentation
logistics plan for large-scale events
Communication  Utilize regional communication  Regional communication networks  Project Management Plan should
networks and supplement with may be unavailable or degraded, identify planned communication
site-based communications as impacting efficiency of supply chain strategy and contractor
needed operations provided-capabilities (Example:
Sat-Phone)
In-country  Policies defined:  Institutional frameworks may be  Establish institutional frameworks for
logistical – Imports and duties inappropriate for post-disaster engineering, construction, and
institutional – Weight limits response and rebuilding logistical response activities and the
infrastructure – Packaging requirements  Institutional frameworks for specialized issues associated with
– Rules of origin modification may be absent, reconstruction
– Required documentation contributing to logistical chain  Clearly identify variance from normal
– Typical approval timeframes ineffectiveness or uncertainty processes and authorities
 Agency roles understood (even if
inefficient)
Site transport  Typically bus transport from site  Local transport may be  Logistical plan should identify
gate or construction camp dysfunctional extraordinary transportation
 Local transport, if available  Travel times for critical specialty capabilities:
labor may necessitate increased – Heavy lift
helicopter operations – River access
– Heliport or potential landing sites
in vicinity of staging areas
– Warehouse
– Command centers
Cash flow  Positive cash flow or minimum  The need to bridge cash  Prepositioned contracts should have
working capital needs do not requirements of subcontractors necessary payment mechanisms,
influence logistical decision making makes payment terms an invoicing requirements, and approval
increasingly important selection mechanics thoroughly addressed
factor in sourcing decisions

2-11 GV20110547005.DOCX
 Logistics- Global Scale CAPEX Program -
Affecting Leveraged Execution and Recommendations for Post-Disaster
Activities Procurement Post-Disaster Reconstruction Management
Anticorruption  Required business process  Risks greatly increase, and  Strong transparency and
and monitoring and surveillance become anticorruption requirements in place
transparency larger activities and incorporated into all contracts
 May impact sources of supply,
logistic routes, and ports of entry
 May necessitate increased security
in logistics chain
Stakeholder  Keep stakeholders informed in  Changed stakeholder groups,  Communication plans, focused on
engagement advance of logistics activities priorities, and communication both response and reconstruction
impacting local or regional difficulties impact the effective activities, developed in advance
transportation networks communication of planned logistic
activities that affect local and
regional networks
 Stakeholder impacts may be
exacerbated by difficulties in
stakeholder engagement
Change  Critical activity for efficient supply  Impacts of change magnified in  Responsibility and timely decision
management chain operations logistics chain post disaster processes incorporated into Project
Management Plan and institutional
frameworks for post-disaster
operations

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 Example of Fluor’s Response Capabilities

Area of Need Specific Need Amount

Contingency-response-experienced labor 24 hours 325

Contingency-response-experienced labor 48 to 72 hours 200

Local labor recently employed 3,000

Temporary power equipment Air transportable 150 MW

Heavy construction equipment available for
mobilization United States and Canada 737 pieces
Regional dump trucks, water trucks, and fuel
trucks Country A 140

Regional construction equipment and vehicles Country B 88

Regional construction equipment and vehicles Country C 200

Regional service trucks, infrastructure,
construction equipment, and vehicles Country D 25

Small tools U.S. depots (2) 10,000

Fuel U.S. depots (2) > 1 million gallons

Consolidation warehouse United States 250,000 ft2

Relevant basic ordering agreements CONUS-based vendors 82

Debris grinders for deployment 6

Medical facilities 50-bed facility 9

Includes 500, 2,500 fy2-minimum
Temporary shelters tents 4,500
Shelters or trailers with self-contained HVAC 70 shelters
and power 55 trailers

Relocatable buildings United States 430,000 ft2

Feeding shelters with HVAC 30 x 50 ft 19

5 VSAT
18 satellite phones
Communication 24 hours 8 BGAN terminals

3-1 GV20110547004.DOCX
 Contact Information

For more information, please contact:

Bob Prieto
Senior Vice President, Fluor
Carnegie Executive Center
103 Carnegie Center, Suite 300
Princeton, New Jersey 08540

bob.prieto@fluor.com
1.609.919.6376 (New Jersey office)
1.609.919.6359 (office fax)
1.917.518.9430 (mobile)
1.803.370.4359 (BlackBerry)

4-1 GV20110547006.DOCX
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