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Effective Contracting for a Pilot Plant

By Richard P. Palluzi |

Contracting a pilot plant is a viable approach for any organization. However, it can be fraught with potential issues, which need to be understood and addressed in advance

Reduced in-house resources have limited the options many organizations have for designing and constructing pilot plants. The increased complexity and intricacy of modern pilot plants also frequently challenge the expertise and resources of many organizations. These factors often force companies to reach outside for assistance in designing and contracting a new pilot plant. In addition to these issues, many organizations have determined that contracting a pilot plant may be the best approach for other reasons. The organization may lack expertise in the area and recognize that it will be cheaper, faster and more effective to have a more experienced pilot-plant firm design and construct the unit. The organization may be overloaded and need to reach out to offload some work (peak shaving). This may be due to a temporary workload increase or as part of a longer-term need the organization is uncertain will continue.

In either case, the expectation is that the need will shortly go away. If the long-term need does continue and the organization feels it will be part of their base load, it may take several years to hire and train the necessary additional in-house staff. These extended needs may also periodically arise again in the future. Some organizations prefer to staff for less than their full normal workload. This allows them to shed staff (the contractors) during downturns and provides significant flexibility without the angst of laying off regular staff. The organization may only have very intermittent needs for a new pilot plant, perhaps only once. In this case, it is more logical to buy the service from outside than to try to learn how to do something in-house that the group may never need again, or at least not for a very long time.

While contracting a pilot plant provides benefits to any organization, there are many potential issues that can arise, which need to be understood and addressed in advance. If they are adequately planned for before the contract, the result will probably be much more successful at a much lower cost. This article describes the common pitfalls and problems that can arise when contracting out a pilot plant, and what organizations can do to avoid or at least ameliorate them.

Note that, when it comes to contractors, most are reputable, professional organizations, but some, sadly, may be less professional and effective than desired, leading to needless delays and cost overruns. While this unsatisfactory group is relatively small, the frustration and lingering problems they create is incredible. Knowing what to look for to avoid such a problematic situation is prudent. Also, understanding the typical challenges that can arise, even when using qualified contractors, can make the project much easier.


Extent of the contract

The first concern is how much of the work will be contracted. The typical approaches that are usually considered fall into three broad classes, described in the following sections.

Completely contract the design and construction of the pilot plant. In this case, the resulting unit may be installed and started up by in-house resources, or the contractor, as desired. This is the most comprehensive and expensive option. It also has the highest risks, because the effectiveness and success of the pilot plant is inordinately dependent on the contractor’s design skill and construction quality, augmented by the thoroughness and quality of the design and construction reviews the organization provides (Figure 1).

FIGURE 1. The owner can opt to completely contract out the comprehensive design and construction of the pilot plant, but this option assumes a great deal of trust in the chosen contractor’s skills

Perform the process design in-house and use the contractor to complete the design details. The contractor will handle many details, such as sizing, layout, mechanical design, wiring designs, equipment selection and so on. The pilot plant is normally constructed by the contractor and installed and started up by in-house resources or the contractor as desired. This approach retains the most critical element of the pilot plant — the process design — in-house, thus reducing the risk. However, the cumulative effect of the contractor’s design work is substantial and can significantly affect the pilot plant’s performance. This approach also requires that the organization be able to supply adequate resources for the required design and to review the contractor details, which may often not be possible.

Develop a fully detailed design in-house, including equipment selection, and hire a contractor to just construct the unit. In this case, unit installation is often included as part of the contracting package. While this requires significantly more in-house resources, particularly design resources, it does ensure that the pilot plant is most closely aligned with expectations. A variant is to contract out the design to a pilot plant specialist and then the construction to a different, usually local, process piping and electrical contractor. This often greatly broadens the range of qualified contractors to do each part of the two-step process, since the construction contractor does not require as high a level of pilot plant experience. It does, however, require locating two qualified contractors and developing two contracts. The extra effort is often ameliorated by the easier time one has in locating qualified contractors.

In all cases, it is not uncommon to contract for an independent detailed design and safety review [1, 2] of the in-house or contract design effort.

Locating qualified contractors

The next concern — perhaps the most critical step — is locating and prequalifying suitable contractors. The most important guideline for successful contracting is to never ask a contractor to bid on a job unless you have prequalified them and feel confident that they can do the work successfully. Prequalification is a tedious and time-consuming process that is often overlooked or reduced to a cursory check by the procurement team to confirm the potential candidate’s financial stability and safety record. This lack of prequalification or a cursory prequalification usually results in major problems. All too often, a name is picked to fill out a bid slate without any prequalification. Then, when they submit the lowest or superficially most attractive bid, you are stuck with a contractor that is totally unsuited to the project.

While many factors are involved in prequalifying a contractor, their safety record is of utmost importance. The contractor should be able to answer questions about their safety programs to convey the sense that safety is a priority and not just a buzzword.

While the safety record is very important, it is much harder to find a qualified pilot plant contractor with an outstanding safety record than to locate a safe but unqualified contractor. Only after you find a pilot-plant-capable contractor should you bother looking at their safety record. If their record is poor, it may eliminate them from consideration, but conversely, a great safety record does not a good pilot plant contractor make. Recognize also that smaller contractors may have higher safety indexes, yet be no less safe due to the inherent issues with safety statistics [3].

Beyond safety, many other questions must be answered: Is the contractor technically qualified to do the work? Have they done enough similar work in the last few years to be considered experienced? Do they appear knowledgeable on the areas you are interested in? Experienced does not necessarily mean qualified. The contractor may be very experienced in process construction but clueless about pilot plants. They may be able to handle multi-million-dollar projects, but be structured poorly to handle a $100,000 project without overloading it with unnecessary overhead (Figure 2). They may understand wastewater treatment but be ignorant of chemical processes. So, exercise great care in assessing a contractor’s experience. Recognize also, that the nature of research often makes it difficult to find anyone who has done exactly what you envision. Hence, you will often have to assess how closely the contractor’s recent previous work matches your project requirements.

FIGURE 2. A contractor that has much experience in large-scale plants may not necessarily bring the correct expertise for a smaller, researchscale pilot plant

Other questions to consider relate to areas that are difficult to quantify, but typically easy to recognize. Are they professional? Do they answer calls promptly? Do they provide suitable information quickly? Does the information make sense? Is it relevant? Do they submit information in an organized and easy-to-understand fashion? Do they understand your questions and concerns or seem to treat them as minor issues or act baffled as to why you are asking them? How do their previous clients view their performance? Would a previous client ask them to bid again? Did a previous client feel they contributed to the success of their project? Did the contracted pilot plant start up easily and operate properly? What lessons did they learn in dealing with the contractor?

Pay attention to body language or verbal clues as you talk to references. Sensing an undertone in the conversation can lead you to keep asking questions that can lead you to a better understanding of the contractor’s performance. Answers that seem very bland and cursory may well be indications of a problem the reference is unwilling or unable to discuss, or a reference who is too removed from the project to offer an insight. The fact that the client purchased several pilot plants from the contractor may be a good sign (they are happy with their choice) or it may simply be due to inertia or a lack of viable alternatives. The best approach is to try and find a contact who worked on the project or is operating the unit. Finding that contact may require reaching out to vendors, acquaintances and other contacts if the contractor does not have adequate contact information.

Is the contractor financially stable? Ideally, you don’t want your project to be either an inordinate amount of their total volume nor a trivial amount. In the first case, any problems on your project risk them having to respond in a way to ensure their survival. In the latter case, they simply may not pay enough attention to your requirements. Usually, the procurement team can find out this information, but it may be harder if the contractor is privately owned. Being too large or too small a client is not, in itself, a sufficient reason to disqualify a contractor, but it does add another element of risk that needs to be evaluated.

How busy is the contractor? Realistically, most good pilot plant contractors will have a backlog and probably some delay before they can get started on your project. While this may create schedule problems, remember that quality always trumps speed. Recognize that a very busy contractor is likely to be stretched to meet their commitments, and therefore may be forced to use less qualified personnel, which can result in issues.

Be alert for the contractor who promises to meet all your schedule goals no matter how ambitious — it is all too easy for a less professional contractor to suggest later that the extended project delays are simply due to “a better understanding of the project’s scope.” A good contractor will be very careful about promising too much until a good part of the design is finished, when they understand enough of the details to develop a preliminary schedule. Always ask for a detailed, or as detailed as possible, schedule. Equipment deliveries completed in two weeks are highly suspect, as is uncommonly expedient order processing (Figure 3). A succession of highly optimistic task durations usually points to the probability that cumulative delays due to problems will adversely impact the overall schedule. Vague, broad task descriptions like “piping” or “wiring” leave one very suspicious that their magnitude and duration have been realistically and carefully assessed. And remember, a longer schedule will always involve more overhead and administrative costs, so problems in this area can result in attendant cost overruns down the road.

FIGURE 3. Obviously, owners want equipment deliveries to be an efficient process that doesn’t delay the project, but they should be wary of contractors who provide overly optimistic task schedules, which may not account for certain details or contingencies

You should also consider how closely the contractor’s initial bid matched a project’s final cost. Any contractor should be able to give you these two figures, but when there is a significant divergence, they are usually quick to cite “changes in the client’s design” as the key reason. While this may well be true, too often it is because the contractor failed to truly understand the design basis before the initial estimate or failed to understand all the work that would be required and add to the costs. In general, a 2–10% cost growth is often reasonable — more than that can indicate a contractor lacking in estimating or design capabilities. While pilot-plant cost estimating is a very difficult area, and one that is subject to numerous potential problems, one expects that an experienced contractor should be able to get it right the first time [4].

At the end of the prequalification process, organizations should eliminate any vendors for which the team has reservations. Even if they are hard-pressed to find a definitive reason, it is much safer to go with someone else or spend the extra time to lay the concern to rest. It is also recommended to be honest with the contractor about any reservations. They may be able to address them or may even agree that they are not the right match.

Type of contract

The next major decision is whether to ask for a lump-sum or a reimbursable (also called a cost-plus or time-and-materials) proposal. These contracts are described in the following sections.

Lump-sum.   On the surface, a lump-sum proposal appears to have many advantages. It allows a fast comparison between competing proposals and gives a defined cost and schedule. It puts the onus of doing the work efficiently on the contractor, meaning that the contractor appears to incur most of the risk for unknowns. It allows the owner to take a hands-off attitude towards the work and usually requires the lowest amount of resources from their perspective in following up the project.

Unfortunately, experience has shown that, typically, most of these “advantages” are illusory at best, at least in pilot plants. Any changes — and there will always be changes — are going to be costly.

Any unknowns that result in design revisions or equipment issues will mean more expensive selections. Also adding to the owner’s costs are any new information that requires a different process approach, as well as other similar issues endemic to pilot plants. Some of this cost mark-up is reasonable, including: the need to track, estimate and price the change; develop the design to address the change; and follow up the work to have it done safely and effectively. However, some considerations of the mark-up may not have as much merit — be aware of contractors loading the change with extra overhead, spurious arguments as to the effect of the change, overestimates of the time involved, capitalizing on the fact that the organization has no viable alternative and so on. Sadly, many contractors make their profit from change orders. No matter how well-defined the pilot plant is, changes will be unavoidable. Whether they involve new information requiring a design modification or unexpected corrosion behind a wall, such issues eventually end up adding to the owner’s costs. If you think you can transfer all this uncertainty to the contractor, you are wrong. Either they will price the job accordingly with an excessively large contingency, or you will end up in conflict after the event where they may argue that you tried to take advantage of them. In either case, you will pay.

Additionally, in the lump-sum contract, safety becomes solely the contractor’s responsibility. While this may sound advantageous on the surface, it actually means that the owner will have little influence over how the contractor addresses it. This can result in a difficult decision as to abrogate the contract due to poor safety performance, with attendant potential legal issues, or having to approve change orders for additional safety measures.

Significant time and effort are wasted on discussions about what is or is not included in the lump-sum contract, what should and should not be included, what is reasonable or unreasonable and a host of similar issues. Such discussions detract from the effort to find the right answer to a problem and often end up causing considerable schedule delays.

Reimbursable (cost-plus).   Cost-plus contracts have numerous advantages. The contractor is guaranteed a fixed profit for each hour worked. Change orders are thus no different from any other order. Granted, the work may be costlier if the timing is wrong and things need to be redone, but the costs are easily identifiable with no opportunity for creative estimating, bookkeeping or similar cost-enhancing issues. Safety, productivity and even quality are enhanced because the owner and contractor can determine the best way to handle the tasks that arise.

This approach provides an enhanced ability to parcel out portions of the work to those contractors best equipped to do the work. The general contractor has little incentive to argue to use a lower-cost but less qualified or less competent subcontractor. The organization has a better ability to utilize a known or preferred subcontractor.

The organization can often set up the project so that less defined (or even unknown portions) are included or easily added. Clearly, when defined, these unknowns may add to the cost and schedule, but there are limited or no downsides to adding them at that time.

Also, new approaches can be tried with less risk. Whether they come from the organization, the contractor or other sources, neither side has a position to defend. The new approaches should be trialed — if they work, adopt them, if not, go back to the previous approach. Many effective techniques can result from such trials.

To be fair, there are potential issues with a reimbursable contract approach that need to be acknowledged and addressed up front to ensure success.

There must be an advance agreement (or at least discussion) regarding productivity. If the owner is unhappy, they must have a mechanism in place to request timely changes. This can be as simple as replacing less-productive workers, or as difficult as replacing a less-organized or less-effective supervisor. This often scares owners (who fear they will be straddled with the poorest performers in the contractor’s shop) and contractors (who fear that no one will ever work fast enough to suit an owner’s unrealistic expectations), especially since determining productivity is fraught with problems and is open to wide and varying interpretations. Typically, neither side wants to keep changing personnel, since they will lose any investment in training and orientation. Usually, it is easy to reach agreement that a personnel problem exists. If not, then a frank discussion between both sides can lead to a reasonable plan to address the problem. The client wants to maintain their reputation, so they have a vested interest in dealing with these types of issues.

Be aware that many organizations have unrealistic expectations as to how long work will take. It is prudent to get an estimate (even on a reimbursable contract) for all the different phases of the work. Often, this will show major disconnects between owner expectations and contractor estimates. If addressed in advance (or at least recognized in advance), this can go a long way toward minimizing problems. Frequently, explaining to the organization all the intervening steps or work details will open their eyes to how unreasonable their initial assessments were. Other times, it may be necessary to find ways to deal with individuals who simply refuse to recognize that good work takes time.

There also needs to be some advance discussion and agreement to prevent over-staffing the project (Figure 4). For example, a large commercial project that has 1,010 people instead of 1,000 is less efficient, but the effect is probably minimal, whereas a small pilot plant project that has six versus four people is grossly inefficient. A frank discussion upfront about how many supervisors will be required is prudent. Similarly, overhead should be discussed early to avoid problems and misunderstandings during the project. The owner should determine how much overhead will normally be charged for timekeeping, materials procurement and similar less-direct functions, as well as how much owner supervision there will be. It may also help the organization to recognize that they have a problem and let them address the issue while they have the most leverage. Where design work is involved, or more complex sequencing, the owner should make it clear that the contractor will need to justify any extra attendees, assistance, or other charges before they are incurred.

FIGURE 4. The owner must come to an agreement early in the contracting period to avoid overstaffing of the project, which can lead to inefficiencies and spurious costs

Oftentimes, one, two or even five extra personnel may attend meetings to help address issues, but owners should be quick to ask justifiably unnecessary personnel to leave without participating (or incurring charges).

Similarly, the administrative time required for any change or materials procurement should be fully understood. Sometimes this time is reasonable — for instance, with a rush order that requires several phone calls to locate the part and then several more follow-up calls to get it delivered quickly. Other times are spurious, as in charging administrative hours per materials item when all are placed with the same vendor at the same time. Arguments that someone is employed “essentially full-time” supporting the project may lead owners to ask that contractor personnel be based on site so their need can be evaluated.

There also needs to be some advance agreement about staffing and staff changes. For instance, an owner may assume they were getting a very experienced pilot-plant engineer only to find a new hire assigned. Or, the contractor’s top pipefitter or most experienced electrical supervisor suddenly departs to another assignment to be replaced by a less effective performer. The key to addressing such staffing issues is agreement as to the initial staffing for all the lead personnel, such as the project manager, principal designer and site supervisor, before the project starts. Then, there should be agreement that any staffing changes within the contractor’s control will be only by agreement. In that case, when the contractor needs a worker elsewhere, the owner can obtain some compensating relief, such as underwriting of extra training or additional orientation.

Owners should also make sure they fully understand and agree on the rate structure. Overtime rates, supervisor pay, company-provided equipment and numerous other areas can often involve complicated rules and practices. There may still be surprises, but an early agreement can minimize their potential. As well as potentially trust-destroying misunderstandings.

The organization needs to accept that for this approach to reap the most benefits, they will need to be more hands-on and involved. This means devoting time and resources to the project followup and working with the contractor.

For pilot-plant projects, the cost-plus approach almost always produces a better product at lower cost.

Contractor labor rates and profit

When considering labor costs, recognize that a “lower cost” or a “less expensive” option does not mean cheap. Contractor rates should be carefully examined before commitment. Many contractors, to secure a bid, will underprice the proposal.

In a non-union firm, this often means that the contractor cannot attract enough properly experienced personnel to staff the project because the rates they can pay are too low to attract the best personnel. This leads to problems later, because the contractor is either always short of personnel, resulting in schedule delays and attendant increased overhead costs, or low productivity due to inadequately skilled personnel. In a union shop, where the rates are set, such staffing issues are usually not a problem. Even with higher hourly rates, a more-productive and qualified team may end up as a cheaper option if they complete tasks significantly faster.

This includes not only the trades personnel but also the supervisory and engineering staff. Some smaller pilot-plant contractors hire new graduates or new tradespeople, pay them at the lowest end of the pay scale, and don’t expect to retain them long. This results in lower-cost proposals, but no real experience, and almost always costs the organization more in the end. Other pilot-plant contractors have their non-degreed design staff construct most of a smaller unit themselves, arguing that this is more efficient. Usually, either the staff tends to be lower end or lower productivity. Arguments that their having a degree leads to savings as you need less documentation are very dangerous, because these normally translate to less ability to review the product before it is finished. So, determining how the construction will be staffed is important.

Many organizations fixate on contractor profit in cost-plus bids. They feel if the profit is too high, they are paying too much. Realistically, many contractors, particularly smaller pilot-plant contractors, have a very limited understanding of their overheads. As a result, much of what they may call “profit” is really lost in their overhead. They realize they need to charge it to stay in business but either cannot really identify it or do not understand the need to break it out as a separate line item in their proposals. Typical small contractor margins are in the 15 to 30% range, of which half or more can be assumed lost to cover overhead. If the margins are much below 15% “profit,” then the contractor is often in financial duress. Therefore, profit generally should not be used as a selection criterion.

In-house requirements

The organization must take the time to define and document all in-house safety, equipment and installation requirements, among others, and should ask themselves a number of focused questions, such as the following examples:

  • Is plastic tubing allowed in-house for flammable and toxic materials?
  • How close to the relief device setting does the organization feel comfortable operating?
  • Do they want block valves or bypasses on all components likely to need maintenance?
  • Are there organizational limits on storage quantities, pressure or temperature?
  • Which codes does the organization require following?
  • Is there a standard piping desired for instrumentation, sampling or other common operations?

This documentation takes time and effort before starting work, which if not performed, leads to needless design revisions and higher costs. A detailed design basis including all this information is prudent, but outside the scope of this article.


Materials and equipment selection

Materials procurement is an issue in all contracted units. Do you specify all the materials or just the critical pieces? A contractor’s goals when specifying and ordering materials are usually making sure it does not cost the contractor extra, it is as easy as possible to order, and they can get the materials quickly with as little pre-planning as possible. The organization, however, usually wants to make sure that it receives the right equipment for the envisioned use first, and then worries about the cost and ease of procurement next. If the organization knows what it wants, then it is easy to tell the contractor to base their proposal on that specific equipment. If the organization does not know what it wants, then it either must have the contractor submit information in advance for their approval or trust the contractor’s judgement. Either can be a problem. Advance submittals often slow down a project schedule and take a great deal of effort to review. Often, submittals may be rejected before the organization realizes they are not aligned with the contractor on what the equipment needs to do. Even more often, submittals are routinely accepted without any real review, leading to inappropriate selections. Smaller organizations with limited in-house resources may struggle to find the expertise to review submittals.

Most contractors have very limited operational experience (if any). As a result, their ability to understand the effect of lower-cost components on maintenance and operations is often suspect. On the other hand, many components have a long enough life that, in a research world, even their limited life is much longer than required. A plant might be able to argue that paying 50% more for a valve with a 10-year life is economically viable. A pilot plant with a projected three-year life will not see the return on its investment (Figure 5). Conversely, a pilot plant with numerous lower-cost components that fail too quickly will have a terrible downtime record and almost certainly require a much longer and ultimately more expensive schedule to complete the required research program. And every pilot plant requires a large amount of smaller equipment, such as struts, minor instrumentation, gages, valves, fittings, regulators and so on, that, while individually less critical can, in summation, significantly affect the pilot plant’s operability. Engineers should take notice if the proposed selection has incompatible materials, is operating at the very bottom or top of its range or is not accurate enough.

FIGURE 5. Due to the lifecycle and operational expectations of a pilot plant, the approach to determining a return on investment for certain pieces of equipment is quite different than for a commercial-scale plant


A contracted unit requires even more documentation than normal, since it often uses equipment and components with which the organization is not familiar. The contractor should be required to supply copies of all manuals, purchase orders and similar information on all equipment. The organization needs to spend the time to confirm that these have been provided before signing off on the unit. All too often, the failure of a component during startup or operation leads to a frenzied effort to find a manual that was never provided or a purchase order that is no longer available in the contractor’s system.

All drawings of the pilot plant should be in a format the organization can use and should utilize their symbology whenever possible. This is critical to ensure the organization’s design reviews are efficient. The final product should include red-lined piping and electrical drawings that represent exactly what is being provided and that clearly highlights any differences — even minor ones — from the original drawings. Most differences will be of little or no concern, but some may be critical. For example, in one recent project, the contractor had difficulty in routing some tubing and arbitrarily reduced the height by a few inches to make installation easier. The lower elevation no longer provided the necessary liquid seal and required costly repiping later when the problem emerged.

The organization and the contractor should also have a firm agreement on the mechanism for any changes, even trivial ones, such as switching valve types, changing the order of less-important components and layout modifications. Most are trivial with no impact, and some are subtle but major issues.


Contractor-organization contact

A critical need is to ensure that the contractor has a single point of contact (SPOC) within the research organization. The SPOC needs to be responsible for arranging for any necessary reviews (design, safety, construction and so on). The SPOC needs to be the only one to tell the contractor what to do and the only one the contractor asks about anything. While this is a relatively simple practice, it goes a long way to avoiding miscommunication, misunderstandings and inefficiencies. This puts a large burden on the SPOC and is almost always a full-time job except for on very small projects. Indeed, sometimes the SPOC may need to be a small team (2 to 3 people) to do all the work that is required. Part of the SPOC’s responsibilities should include quality assurance and quality control (QA/QC) on the contractor’s work as it progresses daily. It is more efficient to inspect work as it progresses rather than to wait for a defined end point. There will be less rework and it will be clear to all contract personnel that the owner is paying attention.

Quality assurance and control

The organization should always ensure that the pilot plant receives a detailed design review either in-house, or by another, independent contractor, before construction (Figure 6). Similarly, the organization must conduct an independent hazard analysis and risk assessment before committing to the final design. Both activities take time and effort and must be factored into the schedule. Also, both activities are likely to result in changes, so holding off on the final cost estimate until these tasks are complete may be prudent. Design-build contracts to a fixed price are rarely viable for pilot plants as there are too many variables in play to produce a valid cost and a high-quality project.

FIGURE 6. Conducting a detailed design review, either in-house or with an external third-party contractor, is an essential step before construction can begin

Once construction starts, the organization should arrange for routine frequent visits to the contractor’s shop or construction site to review and approve the work. These should be very frequent (weekly is recommended), except perhaps during periods when little is occurring due to deliveries or task sequencing. These visits should be much more detailed than simple tours. Some fittings should be disassembled and confirmed to be properly installed. Tracing of the installed piping should be verified to follow all the drawings. Equipment and instrument installations should be reviewed and confirmed to be acceptable to the organization’s standards. Layout issues, always a recurring problem, should be reviewed and resolved. This will take time and effort on the part of the organization. Do not be surprised when this results in many unexpected issues and some change orders. The more design work done upfront and carefully reviewed by the organization, the less these will be a problem. However, some issues will always arise, so adding a small (2–3%) contingency to the final price when the organization gets budget approval is prudent to avoid needless work and resultant delays in seeking approval for small, necessary changes. ■


1. Palluzi, R. P., Get A Cold Eyes Review of Pilot Plant Design, Chem. Proc., March 2021.

2. Palluzi, R. P., Research Projects: The Importance of ‘Cold Eyes’ Project Reviews, Chem. Eng., Feb. 2017.

3. Hallowell, M., others, The Statistical Invalidity of TRIR as a Measure of Safety Performance, Professional Safety, April 2021.

4. Palluzi, R. P., But What Will It Cost? The Keys to Success in Pilot Plant Cost Estimating, Chem. Eng., Nov. 2005, Dec. 2005 and Jan. 2006.


Richard P. Palluzi, of Richard P Palluzi LLC (Email: rpalluzi@verizon.net; Phone: 908-285-3782), is a consultant to the pilot plant and laboratory research community on safety, design and research project management. He retired as a distinguished engineering associate after 40 years at ExxonMobil Research and Engineering, where he was involved in the design, construction and support of pilot plants and laboratories for ExxonMobil affiliates worldwide. Palluzi is the author of two books, over 100 articles and 40 presentations. He was chair of the AIChE Pilot Plant Committee, ExxonMobil’s Pilot Plant and Laboratory Safety Standards Committee, and ExxonMobil’s Safe Operation Team for their Clinton, N.J. facility. He is on the National Fire Protection Association NFPA-45 (Fire Protection for Laboratories Using Chemicals) and NFPA-55 (Industrial and Medical Gases) committees. Palluzi also teaches 15 courses for the University of Wisconsin’s Department of Engineering Professional Development, and provides customized training to the research community. He has B.S. and M.S. degrees in chemical engineering from Stevens Institute of Technology (Hoboken, N.J.) and holds a P.E. license, as well as CSP (Certified Safety Professional) designation. Palluzi now works full time providing consulting on all aspects of safety and design for pilot plants, laboratories and research facilities.

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