Two score and 10 years ago, the International Pipe Line and Offshore Contractors Association (IPLOCA) was formed as the International Division of the Pipe Line Contractors Association of the United States. In the subsequent five decades, the organization has consistently met its first objective, “to promote, foster and develop the science and practice of constructing onshore and offshore pipelines.” Said differently, the organization is a driver of innovation in the pipeline industry.
Innovation through health and safety, environmental and social responsibility, new technologies and novel construction techniques are all hallmarks of IPLOCA. As the organization approaches their 50th anniversary convention in Paris, the city in which it was founded, the stage is set for another 50 years of innovation in perhaps the most challenging area: new contractor-owner relationships built on frequent dialogue and collaboration.
IPLOCA’s industry actions are guided by 10 organizational objectives. As the world in which the members operate accelerates, it places greater responsibility on these members to work with pipeline owners and operators to leverage the opportunities presented and mitigate the risks. The concept of new contractor-owner relationships built on frequent dialogue and collaboration to herald a new era of progress in the delivery of oil, water and gas is not new, it is simply the most challenging aspect of operating in the pipeline industry due to the personal behavior change it demands.
Access to clean water and low cost energy are the foundation on which health, growth, development and rising standards of living are built. The government agencies and private organizations that design, build, own and operate pipeline systems and the contractors, designers and vendors that serve them are attempting to meet this demand for clean water and low cost energy. Exploring methods to do so that yield the highest value is their responsibility and a world where pace accelerates and complicated risks demand mitigation, collaboration is the solution.
The agenda of technical sessions offered at the 50th anniversary IPLOCA Convention demonstrates the member’s commitment to this responsibility, personal behavior change and solution pursuit. In one session titled “Operator and Contractor Alliance Use in Pipeline Construction: Case Studies for Success and Failure,” investigations into this most challenging aspect of operating in the pipeline construction industry will take place.
Since the turn of the millennium, there was much interest in the use of strategic sourcing and strategic alliance type procurement and management relationships for pipeline construction. These types of relationships were built and put into place in many instances by pipeline operators and now that a decade or more has passed, it is appropriate to take a cold, hard look at the level of success achieved. These business strategies were typically driven by the pipeline operators and while they primarily involved construction service providers, they have frequently included the integration of engineers, material/equipment manufacturers, distributors, and other specialized service providers. The session will cover a series of case studies and look at the planning for, time line of and results achieved from these business relationships.
These types of technical sessions offer insight and techniques for innovation and in many instances an answer into what this type of innovation can yield. Several examples of what these types of business relationship can achieve include:
• More than $20 million in annual construction cost savings.
• A decade of no contractor unit price increase.
• Ability to absorb a 5x increase in capital spending over the previous three years.
The obstacle to this level of success is frequently the personal behavior change and failure typically originates from company cultural issues that prevent or slow the use of this type of innovation.
In IPLOCA’s next half century, innovation will likely be derived from the greater use of new contractor-owner relationships built on frequent dialogue and collaboration.
IPLOCA is at the forefront of investigating, designing and applying these types of relationship and this innovation will yield access to clean water and low cost energy — the foundation on which health, growth, development and rising standards of living are built.
Join me at IPLOCA’s golden anniversary in Paris where innovation and industry leadership in global pipeline construction are brought to the forefront and highlighted.
Mark Bridgers is a consultant and investment banker with Continuum Capital, which provides management consulting, training, and investment banking services to the worldwide energy, utility and infrastructure construction industry. He specializes in driving performance improvements through the capital construction process for owners or buyers of construction services and helping engineers and contractors generate reasonable returns for the risk undertaken. He can be reached at (919) 345-0403 or MBridgers@ContinuumCapital.net and followed on twitter at @MarkBridgers. For more information on Continuum, visit ContinuumCapital.net.