Jim Thompson

Email Jim at jim.thompson@ipulpmedia.com

I am old enough to precede the Construction Industry Institute (CII) which was established in October 1983 at the University of Texas at Austin. For reference, my career started in 1970.

Many engineering and construction companies have adopted the phased approach of CII to their work.

Last we talked about the "Design Basis" which I view as a dimensionless description of a capital project. Dimensionless in the sense of most engineering dimensions as well as financial dimensions.

If you are not familiar with the phases as outlined by CII, they are roughly as follows:

Design Basis (2 months)

FEP-1 Conceptual Study/Project Concept (2 months)

FEP-2 Pre-Feasibility Study/Project Definition (3 months)

FEP-3 Feasibility/Project Bankability (9 months)

Execution (18 - 30 months)

FEP is short for "Front End Planning" (sometimes called Front End Loading).

Simply, engineering and financial dimensions start to come into the Work at FEP-1.

Some major supplier quotations start to be introduced at FEP-2.

A full blown, +/- 10% estimate is the work product of FEP-3.

Execution has its own set of divisions, beyond the scope here.

All I can tell you is life would have been much simpler had this framework been thoroughly developed before I started my career!

Be safe and we will talk next week.

For a deeper dive, go here.

Capital Projects: Planning the Work - Study Guide

I. Core Concepts

This section outlines the foundational ideas presented in the text regarding capital project planning.

Author's Background and Perspective: Jim Thompson's career began in 1970, preceding the establishment of the Construction Industry Institute (CII) in 1983.

His perspective is shaped by experiencing project planning before standardized frameworks were widely adopted, highlighting the benefits of structured approaches.

Construction Industry Institute (CII):Established in October 1983 at the University of Texas at Austin.

Known for promoting a phased approach to capital projects.

Its framework has been widely adopted by engineering and construction companies.

Phased Approach to Capital Projects: CII's methodology breaks down capital project development into distinct, sequential phases.

This structured approach aims to improve project outcomes by addressing key aspects at appropriate stages.

II. CII Project Phases and Key Characteristics

This section details each project phase as described by the author, including its duration, purpose, and key outputs.

Design Basis: Duration: 2 months (See Nip Impressions, week of 15 September 2025)

Description: A "dimensionless description" of the capital project. This means it lacks specific engineering or financial dimensions.

Purpose: To establish a high-level conceptual understanding of the project before detailed specifics are introduced.

Front End Planning (FEP): This is a critical set of phases focused on detailed planning and definition before execution. It's sometimes referred to as Front End Loading.

FEP-1 Conceptual Study/Project Concept: Duration: 2 months

Description: The initial introduction of engineering and financial dimensions into the project work.

Purpose: To begin to define the project with initial engineering and financial parameters.

FEP-2 Pre-Feasibility Study/Project Definition: Duration: 3 months

Description: Major supplier quotations start to be introduced.

Purpose: To further refine the project definition and begin to solicit input from potential suppliers, contributing to a more concrete understanding of costs and resources.

FEP-3 Feasibility/Project Bankability: Duration: 9 months

Work Product: A "full blown, +/- 10% estimate." This is a highly accurate cost estimate.

Purpose: To establish the project's viability and financial attractiveness, making it "bankable" for potential investors or financing.

Execution: Duration: 18 - 30 months

Description: The actual implementation and construction phase of the project.

Scope: The text explicitly states that this phase has its own divisions but is "beyond the scope here."

III. Importance of the Phased Approach

This section summarizes the benefits and significance of adopting a structured, phased approach to capital projects.

Improved Planning and Predictability: The phased approach ensures that critical aspects are addressed systematically, leading to better planning and more predictable outcomes.

Early Problem Identification: By introducing details progressively, potential issues can be identified and addressed in earlier, less costly stages.

Enhanced Financial Control: The gradual introduction of financial dimensions, culminating in a precise estimate at FEP-3, allows for better budget management and risk assessment.

Author's Endorsement: Jim Thompson's statement, "life would have been much simpler had this framework been thoroughly developed before I started my career!", underscores the significant value he places on this structured approach.

Quiz: Capital Projects - Planning the Work

Instructions: Answer each question in 2-3 sentences.

1. When was the Construction Industry Institute (CII) established, and what is its primary contribution to project management?
2. How does Jim Thompson's career start date influence his perspective on modern capital project planning frameworks?
3. What does Thompson mean when he describes the "Design Basis" as "dimensionless"?
4. What is the main distinction between the "Design Basis" phase and the "FEP-1 Conceptual Study" phase in terms of project specifics?
5. What key information or input starts to be introduced during the FEP-2 Pre-Feasibility Study?
6. What is the primary work product of the FEP-3 Feasibility phase, and what is its significance?
7. What is the acronym "FEP" short for, and what is an alternative term mentioned in the text?
8. Which of the described project phases is typically the longest in duration?
9. Why does the author state that "life would have been much simpler" if the CII framework existed earlier in his career?
10. Does the provided text delve into the specific divisions or details of the "Execution" phase? Explain your answer.

Quiz Answer Key

1. The Construction Industry Institute (CII) was established in October 1983 at the University of Texas at Austin. Its primary contribution is the development and promotion of a phased approach to capital project work, which many companies have adopted.
2. Thompson's career began in 1970, predating CII's establishment in 1983. This gives him a unique perspective, as he experienced project work before these structured frameworks were widely available, highlighting their value.
3. When Thompson describes the "Design Basis" as "dimensionless," he means it lacks specific engineering dimensions (like size or materials) and financial dimensions (like cost estimates). It's a high-level, conceptual description.
4. The main distinction is that the "Design Basis" is dimensionless, while the "FEP-1 Conceptual Study" is the first phase where engineering and financial dimensions begin to be introduced into the project work.
5. During the FEP-2 Pre-Feasibility Study, major supplier quotations start to be introduced. This helps to further define the project with concrete input regarding potential components and costs.
6. The primary work product of the FEP-3 Feasibility phase is a "full blown, +/- 10% estimate." Its significance lies in providing a highly accurate cost projection, making the project "bankable."
7. The acronym "FEP" is short for "Front End Planning." An alternative term sometimes used is "Front End Loading."
8. The "Execution" phase is typically the longest in duration, ranging from 18 to 30 months, compared to the planning phases which are generally a few months each.
9. The author states that "life would have been much simpler" because the CII framework provides a structured, logical sequence for project development. This systematic approach reduces uncertainties and potential issues compared to less organized methods.
10. No, the provided text does not delve into the specific divisions or details of the "Execution" phase. It explicitly states that this phase "has its own set of divisions, beyond the scope here."

Essay Format Questions

• Analyze how the phased approach of the Construction Industry Institute (CII), as described by Jim Thompson, addresses potential challenges or inefficiencies that might arise in capital projects without such a framework.
• Discuss the critical role of the FEP-3 Feasibility phase in the overall project lifecycle, particularly in the context of project bankability and financial decision-making.
• Compare and contrast the level of detail and type of information gathered in the "Design Basis" phase versus the "FEP-1 Conceptual Study/Project Concept" phase. Why is this progressive introduction of detail important?
• Evaluate Jim Thompson's personal endorsement of the CII framework. What does his experience prior to 1983 suggest about the value and impact of standardized project planning methodologies?
• Explain how the progressive introduction of engineering, financial dimensions, and supplier quotations throughout the FEP phases contributes to a more robust and predictable "Execution" phase, even though the details of execution are beyond the scope of this text.

Glossary of Key Terms

Capital Project: A long-term, large-scale investment project involving significant expenditure, typically for the creation or acquisition of new assets, infrastructure, or facilities.

Construction Industry Institute (CII): An organization established in 1983 that develops and disseminates best practices for capital project delivery, notably promoting a phased approach.

Design Basis: The initial, high-level conceptual description of a capital project, characterized by a lack of specific engineering or financial dimensions. It sets the foundational understanding.

Dimensionless: In the context of the Design Basis, this refers to a description that does not include specific engineering measurements (e.g., size, materials) or financial figures (e.g., costs).

Execution: The phase of a capital project where the actual construction, implementation, or building work takes place, following the detailed planning stages.

Front End Planning (FEP): A critical set of early project phases focused on detailed definition, conceptual design, pre-feasibility, and feasibility studies to thoroughly plan the project before execution.

Front End Loading (FEL): An alternative term for Front End Planning, emphasizing the importance of thorough planning and definition early in the project lifecycle to minimize risks and optimize outcomes.

FEP-1 Conceptual Study/Project Concept: The first phase where initial engineering and financial dimensions begin to be introduced into the project definition.

FEP-2 Pre-Feasibility Study/Project Definition: A subsequent FEP phase where major supplier quotations are introduced, further refining the project's scope, cost, and resource requirements.

FEP-3 Feasibility/Project Bankability: The most detailed FEP phase, culminating in a "full blown, +/- 10% estimate," which assesses the project's viability and financial attractiveness to secure funding.

Project Bankability: The state of a project being sufficiently well-defined, financially sound, and risk-assessed to be considered attractive and viable for financing by banks or investors.

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