Abbott Laboratories’ Cost Management Success for New Facilities with Cleopatra

Having plans to build two factories and a laboratory in The Netherlands, the Dutch branch of pharmaceutical company Abbott needed a service company, an independent party to check on the engineering documents as the main engineering firm developed them. Although Cleopatra Enterprise’s main track record was in oil & gas, they had already proven their abilities beyond that industry. Reason enough for Abbott to use their services to see if the documents for their plant were up to scratch.

Two years later, the factories and laboratory were built and fully operational. Although the original agreement covered the engineering drawings and documentation only, eventually Cleopatra Enterprise has also been responsible for all cost management activities during the project execution phase.

Estimating

Going over the engineering documents, Cleopatra Enterprise came across some elements that could have implications for cost estimating the plant. For example, because several risks of the project were not taken into account, project circumstances would inevitably lead to higher costs. The arguments they put forward resulted in their services for Abbott to expand to a full estimate validation and eventually a rigorous revision of the estimate itself.

Tender management

The project included a significant amount of special equipment and materials as a result of the planned clean areas and labs in the plant. Since the standard tendering procedures that were normally used did not sufficiently appreciate those circumstances, the procedures were improved with the help of Cleopatra Enterprise’s tendering solution. They also organized a kick-off for all subcontractors to get them aligned and to ensure they fully understood the project and its requirements. This approach also helped to realize successful cost control from the early phases of the project.

During the two years that followed, Cleopatra Enterprise was responsible for all cost control activities for the various disciplines involved in the project. Aside from monitoring all costs related aspects, keeping track of scope changes, and forecasting the total costs based on progress using cost management software, Cleopatra Enterprise also proved its value through thinking and construction.

• The project was delivered within time and budget
• Increased estimate accuracy helped to make sound management decisions
• Contract validation and tender management resulted in proper financial management
• Thinking along prior to and during the construction phase, led to significantly lower future maintenance costs