Co-op Upgrader

The Regina CO-OP UPGRADER EXPANSION

Kilborn Fluor Consortium EPCM

THE PROJECT:

I did not know what was in store for me that fateful Friday afternoon that I received a call from a new company in the insulation and cladding industry. I had just completed an assignment in Skookumchuk BC where I attempted to help a dysfunctional company improve the profitability of a tie mill.  I had taken on this project as a fill in job after the construction industry collapsed in Alberta.

I had just driven back to Medicine Hat and was about to reunite with my wife and family when the phone rang. On the other end was a man who was my department manager during the JK Campbell days. He asked me what I was doing and I promptly told him I was in between jobs. He then asked if I would be interested doing a small job for their new company.

The rest is pretty much history but what caught me off guard was the schedule. He asked that I be in Regina the following Monday morning for a site construction kick off meeting. Who was I to refuse, so I was packed and on the road early Sunday morning.

Monday morning I was up early and looking to find the location of the meeting. I found myself entering the CO-OP refinery and was directed to the construction trailer complex where the meeting was being held. There I met my old department manager, the Kilborn Fluor leadership group, their Labour Relations officer and some refinery personnel.

I still did not know till after the meeting what I was there to do but the kick off meeting went well.  After the meeting, I had lunch with my manager and he gave me the drawings and specifications for the insulation of five vessels and a seven – week schedule to complete. That should bring me home in time for Christmas.

Next thing you know, my manager  was off to Calgary and I was starting to walk the site and locate where my base of operations would be.

I found the laydown area where the vessels were located and decided where I would have my single trailer, office and crew lunchroom. The day was ending and the trailer would not be on site for another day. I decided tomorrow would be spent meeting the two Business Agents who would be dispatching workers to my project. Luckily, both were in the same building.

HOW DIFFERENT CAN IT BE?

I called each Business Agent ahead of my arrival and they suggested we meet at different times. My first appointment was with the Sheet Metal Workers union Business Agent. I came to his office and was cordially met and we introduced ourselves to each other.  The Business Agent already knew I was in town and like all outside contractors, started off in a pretty coy question and answer period. But I guess I had built a reputation on previous projects and he mentioned that he had spoken to Business Agents from Winnipeg and Vancouver at their last joint meeting about me.

I was surprised but they definitely do their homework. I never changed my approach to these people and I believe they felt my word was worth something. This meeting took about an hour and half and we shook hands, gentleman’s agreement of sorts. I was shown the door across the hallway and this was the Insulator Business Agent’s office.

I had heard the reputation of my next hurdle when I worked around the western provinces. The reason for the late meeting- I was dealing with an alcoholic who didn’t run on a clock.   I stepped into the office to face a man with a huge hang over but I easily managed to shake his hand. This meeting started with the stereotypical meeting I had in BC years before. Lots of posturing, threats and attempts to intimidate. It didn’t look too good but I said my piece and offered to buy both union reps dinner. At least that went well to that point and I considered the glass half full.

ESTIMATING GAMBLE

I had everything set up, met my insulation supplier and was in daily conversation with the Calgary office. I was going to start the job on Monday morning. One week had gone by and I was itching to get rolling.

My department manager didn’t tell me much about the estimate but I looked at the labour in the estimate and was pretty skeptical.

The one thing I did with all my employers if I was managing the work was to open up their estimate and make sure I understood what they had estimated. Many failed supervisors did not understand how to treat and estimate. Most that failed considered the estimate as their goal. I always considered and estimate just that. An estimate was a guideline to follow but it was a number that one should always better. On this project I asked all but one question.  I actually got the answer on week six of the project.

GETTING STARTED 

My manpower from the insulator union came onboard first. They went through orientation and I met them and took them to our trailer. There I got their names and started the process of signing them on as company employees. I gave my patented up front points about my project expectations to this first group, noting any subtle mumbling or gestures. I have always practiced treating men like men and any disagreements or conversations would be up front and direct, no matter how either parties would be affected.

THE ACID TEST

Within a matter of days I realized this project was getting side tracked and the crew saw me riding their coat tails. On the third day, I jumped onto the scaffold and demonstrated to the foremen and the job steward, what I wanted to see and the performance level I was looking for. The response back was this was not my job to do and the workers would continue to do the job the way they felt it should be done. This was a mistake on their part and after a short discussion; the foremen, the job steward and the balance of the crew were fired. I called the Calgary office and gave the manager a heads up and waited for the fallout.

I had fired two of the Business Agent’s sons, his son in law and their hand picked friends. Well it didn’t take long and the phone rang. On the other end was a very unhappy Business Agent who promptly told me I could not fire anyone number one; the whole crew number two and especially his union job site representative. Finally he was running out of verbal gas and like a fox, I pounced.

I said John; do you remember our discussion in your office before this project started and the following discussion at lunch? We discussed how this project was important to all unions in Saskatchewan and that I would assist by teaching your tradesmen to be tradesmen. Saskatchewan is noted more for part time tradespeople with little industrial experience but we decided it was a good idea to bring the best out of what you have and make them the best. But my men are the best was his response. No John, they are not and because they refused to heed my warnings and because they failed to take instruction, I cannot put the company I represent at risk. After a number of failed attempts to convince me to rehire some of the group, I said no. That was not our agreement and I will honour that agreement.

BUILDING TRUST

After the dust up, things settled down and I was dispatched a second crew. These were also strong union supporters but they were willing to work and take instruction. I think age also played a part, as they were young and malleable. To continue with the peace process I would slip off the job and drop by the union hall. I always bought lunch or offered lunch to both Business agents, gave them updates and left them in a decent comforting state.

The Sheet Metal Workers union dispatched their first crew. I was pleasantly surprised to have a mix of young and mature workers. They turned out to be the key to the success of the project because they showed all company employees a willingness to learn, adapt and lead. They were told by the Business Agent of our initial pre-job discussions and told to honour the agreement.

The seven – week contract was coming to a close and I was already thinking about demobilization. The initial contract was on track and actually destined to make the profit margin estimated. All the while, I was looking at trailer after trailer coming into the laydown and tons and tons of steel and equipment. What was I doing in Regina? This project is looking a lot larger than six weeks ago.

On the sixth week, my manager came to site for another Contracts meeting. I wasn’t overly inquisitive but I asked him about my seven – week contract. I told him my gut feeling about the contract and the selling price of the job. That is when he told me about the estimating gamble. The work was purposely estimated to make cost only. This first contract was to be their foot in the door to bid upcoming work for the Upgrader and also a chance for Kilburn Fluor to see how the upstart company managed work on site.

The first contract, which was a hard dollar $67,000 piece of business allowed my employer to see how I would perform with minimal risk to the company bottom line. And much to their surprise, the estimate was going to make a profit, even after under bidding to get the work.

I was also told that the new company had only done one other large industrial job near Grande Prairie and barely got out of there with their shirts on. They had used a seasoned superintendent who was the brother of the one that sent me to Skookumchuk a couple of years prior.

I was asked if I would be interested in staying on should the company secure more work. I nodded my head and the next thing we are sitting in the Kilborn Fluor boardroom. I soon found out that my employer was low bidder on a huge insulation and cladding contract, worth over $800,000 dollars. This was big money in the day and huge risk in 1988 for a small start up company. The contract was for insulating and cladding the bulk of new vessels and equipment for the upgrader but no interconnecting piping.  The piping was not ready to bid so we had a head start.  All the other major insulation contractors were clamouring for work but soon everyone would be bidding on piping.

My manpower was growing and now I had to contend with material coordination, deliveries, scaffold erection and dismantling and growing office and lunchroom demands and manpower alignments.

Schedule and Performance

Soon the seven weeks turned into months. I was always looking and walking the project to see where I could shave time off the estimate or utilize equipment for different purposes to save on costs. But one thing I always did was gauge the manpower and what level they were performing at.  Sometimes complacency starts a systemic slowdown and I wanted to ensure this would never happen as my manpower costs were substantial.  One of the keys to determining this status or changing the demeanour of the workforce was to walk through the workers lunchrooms.

This might sound surprising to many but there are many different angles to explore when you need manpower to perform well.  The lunchroom is a prime example where complacency can be found and corrected.

 TEACHING RESPECT FOR OTHERS

This might not seem like much but if you started in the trades like me, you would have found that color of skin or family name often put you at the butt end of someone’s humour. And if you were a beginner, often as not you were assigned the clean up duties instead of learning your trade.

There were three lunchrooms on site at this time and eventually would grow to five. The original lunchroom had now become the foreman‘s office as well as mine. I saw that the lunchrooms were in dire need of attention and after everyone was gone, I would clean them up, wipe down the tables and sweep the floors. This is something that I did wherever I worked. I did this for one week and then the cleaning stopped.

It wasn’t long before the insulator job steward came to me and complained that the lunchrooms were messy and the cleaning had stopped. The trap was set!  I chose his lunchroom to set an example as I had done many times before on different projects. We went to his lunchroom and sure as hell it was a mess.

I also took my superintendent and foremen with me. We all agreed that the lunchroom was filthy so I then initiated a short discussion about cleanliness and how it related to setting the standards as proud craftspeople.  I told a story about myself when I had to wipe the dust off the table in front of me so I could unwrap a sandwich.

Yes, everyone could agree to that experience. I then added that this was not the reason why they were hired or the conditions that they had to work in to be a company employees or work under my direction.

The room got very quiet as they started to digest the commentary. Then I said that it is common practice to assign the low man on the totem pole to do the cleaning for everyone, and they all agreed and a few foremen and the job steward snickered. Just so you know, I have a different way to show respect. This is how it goes and this is the way it will go until our project is over.

First person to clean these lunchrooms was myself. I was the one who wanted to show you my respect for your efforts.  Wow, everyone was looking at each other in disbelief. And I added; I have done this in every jurisdiction that I have worked in.

Total silence!  The next person to show respect to you will be your job steward. He is here to represent you and your grievances on behalf of the union. Oh there was a surprised look of disbelief on the job steward’s face but he had nowhere to go. Gotcha! The second person to clean these lunchrooms will be your superintendent, followed by every foreman, then every journeyman. The last person I want to see with a broom in their hand will be the labourer or apprentice. Over time, this practice was recognized site wide by our employer (who originally thought it was a waste of time) the unions, the Owner and Kilburn Fluor.

From that day forward I was never afraid to take discussion with the client from the field to one of our lunchrooms on a moments notice. In later months, when the unions were tangling with other contractors, they often referenced our team as an example they wanted followed. It just got better and better for my employer and the work just kept coming.

PROJECT LABOUR RELATIONS

During this time, there was huge upheaval in the construction industry in western Canada. Unions had become overly powerful and aggressive in their demands and work across the west was diminishing. The big construction balloon was leaking and many companies had turned their backs on union labour. Saskatchewan was still a strong proponent of unions and union labour. This project was probably the last fully unionized project in Saskatchewan for many years to come. But the unions were on their heels and consortiums like Kilborn Fluor brought on Labour Relations experts to keep the project moving forward when unions balked.

I was very aware of the situation and used these positions to better my project outcome. I seldom was in front of Labour Relations and the union and always came out with a winning hand. I did not play those hands like some did but used them to build more bridges between my employer, the project manpower and myself.

When the piping packages came out for tender, my employer could have been hoggish and taken more risk. After a short discussion with myself, they decided to add 15% to their estimate, thus putting themselves out of contention. This was a very smart corporate move.

I had secured the cream of the Saskatchewan union labour; the pick of out of province workers as well as the backing of Kilburn Fluor and our Contracts Administrator.

Now three companies have come on board to insulate and clad the piping. They immediately got into Labour relations issues with the unions and the unions retaliated in full force. I knew the superintendents and managers coming on site from the competing companies and I knew their arrogance would go against the path I had set out. I had groomed a number of unsuspecting people to design and set this trap from the very beginning of the project and now it was paying huge dividends for me and my employer.

We just stayed well under the gun sights as these contractors went head to head against the unions. There wasn’t a day that went by when I wouldn’t see or talk to a competing contractor manager as he was either going to or coming out of a Labour Relations scrap in the Kilborn Fluor complex. If there was a really ugly fight in progress I always found time to take the Business Agents out for lunch. Man – life was really good.

I always got the best tradespeople and that made my job so much easier. But I credit this success to making the first approach to the unions and coming to an agreement before stepping into an unknown element. I was probably the only person who took this approach then and today.

PROJECT STORIES

I only got into a Labour Relations issue with Kilborn Fluor once. This was my head to head, face to face; drag him out scrap with their insulation inspector.

The dispute quickly elevated itself to the Project Manager who was the man who hired this incompetent. It was unfortunate for the Project Manager that I had been doing such good work, maintaining or advancing schedules with no prior complaints.

I had trapped the inspector with a number of substantial extra charges he had initiated without reading our contract. The information was presented in a number of previous communications advising him or making requests of him that he failed to respond to. I had built this case over months of seemingly unconnected emails and letters.

When the extra charges invoices came to his desk, the inspector knew he had overstepped his boundaries and was afraid for his job. He decided he wouldn’t sign them and tried to bury them and then thought he could make life difficult by attempting to bully me and our workforce on the job.

It was either the inspector or I or both of us that had to go, but I wasn’t about to get run over by a painter who breathed too much solvent. The Project Manager sought the assistance of our Contract Administrator but couldn’t send his buddy packing and my employer wasn’t about to see me leave the job, so we both stayed.

Things got better for me after that and we seldom saw this man again. All my questions and clarifications that involved the inspector and his demands would go direct to the Contracts Administrator, which put a huge space between my employer and someone who did not understand Contracts or inspection.

The other insulation contractors were having the same issues but they were not as deceptive in their intent. Poor old painter was covered in incompetence but he survived the job with swollen shitty lips.

Three years later, my employer bid  another Fluor project in Edmonton. The company had already made the short list of bidders and contract questions and clarifications were flying.

My manager asked me what I though about going on a project that was now project managed by the old insulation inspector from Regina. I gave my opinion and they added 15% to the estimate. We called it the Andrew factor and my employer walked away from the job.  The successful contractor went to court to settle their contract a year after the job was completed and still came out losing.

SUCCESS

My employer ended up doing three shutdowns for the Owner in the space of twenty-six months. Co-op Refinery was suitably impressed and we started bidding extra work. We did a lot of cost reimbursable contracts as well as insulating and cladding tanks. When the Upgrader tank insulation package came out, my employer got them all. I can’t remember how many but I believe it was a total of 17. Most were tanks fifty feet tall and 100’ wide. We estimated the work based on a new system of tank insulation from an Edmonton supplier. As soon as the materials arrived on site I notified the Contracts Administrator, who in turn called up my buddy, the insulation inspector.  Now my buddy wanted to redeem himself after our little tiff and after a little coaching, rejected the load and the entire order.  I remember turning back semi loads of this material which may have put a huge strain on the supplier. We then estimated a different system that was my employers design and went on to use this system for every tank we completed.  This enhanced our original contract value immensely.

The project went into year two. Staying away from the piping contract gave me more leeway to seek other work. We took on a refinery shutdown and upgrade even though a competitor company was right there. They were fighting with the unions and the insulation inspector and the owner felt that our track record was best suited for the turnaround (s).

This project had huge industry implications. The Upgrader would take heavy oil and convert it into gasoline and diesel fuel. Our workmanship made the front page of OIL WEEK magazine and twice on the front page of the Regina Leader Post newspaper.  As a project manager, I was really proud of our accomplishments and never failed to make a big deal out of these accomplishments with the foremen and crews.

AN ENGINEERING BLUNDER

The plant was built in modular form. The process was put together in building blocks we call skid units. Once a skid unit is positioned another one was brought in and bolted up. This took a lot of the fieldwork away and allowed Kilborn Fluor to have many fabrication shops bid and construct these modules.

As I walked the site and looked at our progress I noticed that these were skeletal structures with no weather protection. Many had come from the southern US and I guess they didn’t need protection from prairie winters. I notified our office of my observations and told them I was going after another order. There was a fairly lack lustre response as the project was doing very well and they were busy estimating another large project.

I wrote a letter to my Contracts Administrator, noting all the deficiencies on these skid units. There was no response for three weeks. One day, my manager showed up on site for yet another Contracts meeting. We went through all the commercial aspects and then sat around in general conversation. I brought up the subject of heavy oil and the need for additional steam costs to maintain oil flow in open skids as well as proposing enclosing all the affected buildings.

We had an excellent experienced Contracts Administrator. The project was slowly winding down and Kilborn Fluor had to make sure the Owner got a good end product. As well, Kilburn Fluor would make a mark up on our work so there was interest in my proposal.

We discussed the proposed work, the timetable that didn’t allow for hard dollar bids as well as manpower availability. We negotiated a cost reimbursable contract, where I would get a jump – start on the buildings while Calgary submitted unit pricing for materials. Our contract already had labour rates.

When I sat the sheet metal foremen and superintendent down and advised them that we again had scooped our competitors and that we had secured even more work, they were incredulous. Most of our work by that time was cost re-imbursable, as we had just about completed our vessel and equipment contract. This was ten months more of gravy work and I told them that this was a result of their efforts on my behalf. Now the Sheet Metal union was buying me lunch.

We were coasting now. Everyone had been pulling on the rope in the same direction for over two years. We were all benefitting from our hard work but we never let our guard down, never missed a deadline. We were too proud to be like the other guys.

The original $67,000 contract grew to a massive 2.4 million. The seven weeks stretched out to twenty- six months. I was not around for the final demobilization as the company had me flying between Regina and Edmonton to start another big project. My employer benefitted from an additional 1.525 million dollars in sales, all cost reimbursable and or unit price because of project performance excellence and trust.

This project was one of my most memorable and I can appreciate all those who assisted me in making it a success. Many of the Saskatchewan tradesmen worked for me in later years. All of them remember this project. D. S. and C. W. followed me to Hinton for our next adventure. D.S. still works for the company and C. W. has since retired.

Hats off to all those who worked on this project.  It made a bunch of part time farmers into industrial tradesmen with a lifetime of skills.