Program Success through Execution

1. Program Success through Execution John Rigby JBEK Vic Kleinfelter DuPont Case Study 2000 CII Annual Conference Nashville, Tennessee

2. A Case Study DuPont Fluoroproducts Expansion Programs Washington Works Facility Parkersburg, West Virginia

3. Owner’s Site

4. Owner’s Site Washington Works Site • Eight major manufacturing areas • 2,000 acres • 200 employees in 1948; over 2,300 now

5. Period Work Projects Value 1994-1995 Miscellaneous 6 $50 MM 1995-1997 FP* Expansion 5 $180 MM (EPC I) 1997-2000 FP* Improvements 7 $80 MM (EPC II) Site Capital Work *Fluoropolymers

6. Alliance Contractors for Program JBEK (Joint venture: BE&K and Kvaerner) • Contractor EPC Program Manager • Engineering-procurement responsibility MK (Joint venture partner with JBEK for EPC) • Construction responsibility

7. History • Low levels of work • Contractors working independently for DuPont • No state-of-the-art engineering tools • Craft resource pool oriented toward small capital work, supplemental maintenance

8. History(continued) • Major cost overruns • Late completions • Rework and change combined - in excess of 20 percent • No team orientation

9. The Challenge • Safety-health-environment is a requirement. • Leadership and teamwork essential to success. • Use EPC principles for execution.

10. EPC Principles of Execution • Total project focus • Single-point responsibility • Open communications • Performance-driven execution • Truly integrated systems • Flexibility to meet the business needs

11. Program Success • Systems • Work processes • People relationships Critical Success Factors Barriers • Tenants • Safety-Health-Environment • Schedule • Cost • Quality • Relationships

12. E P C The Evolution • Two alliance contractors individually serving DuPont • Two alliance contractors working together — EPC contractors • EPC contractors integrated with DuPont businesses — EPC Team

13. E P C The Program’s Improvement Areas • Safety • Work force productivity • Labor relations • Construction innovation • Engineering design tools and deliverables • Pipe rework • Project controls • Procurement and material control • Relationships

14. Business Cost Evaluation EPC Evaluation ITC 20% (Shown as trend only) (Over-run) Budget/Cost Performance 0 EPCTeamProgram Pre-Program EPC 1Program (Under-run) -20% ’94 ’95 ’96 ’97 ’98 ’99 ’00

15. 73.6 73.4 72.9 72.7 72.7 72.5 72.3 72.2 72.1 71.9 71.9 71.7 71.5 71.5 71.1 71.1 70.7 70.7 70.2 70.1 70.1 70 69.3 69.1 67.9 67.8 67.3 67.4 67.1 67.1 67 66.7 65.8 65.7 65.6 65.3 64.7 60.4 Total Site Work Sample SummaryField and Shop Combined 75 Site Goal = 74 70 % 65 60 1996 1997 1998 1999 2000

16. Program Carry-Over to Site Performance Delrin Capper Replacement Project • History • Initial Concept • $4.0 MM budget • Outage of six to eight weeks • Final Proposal • $2.3 MM budget • 18-day outage • Construction Innovation through Engineering • 650-ton Demag • Twin path (fiber optic) slings

17. Program Carry-Over to Site Performance Delrin Capper Replacement Project • Final results: $12.125 MM value • 15-day outage • Completed under budget • Direct business value • $2.0 MM under original concept • Completed almost six weeks early ($10.125 MM) • Added value • Reduced maintenance cost ($1.0 MM/yr) • Uptime gain ($1.0 MM/yr)

18. Future State Successful Accomplish- ments EPC Future Programs EPC FP Program CIP Lessons Learned

19. EPC Team A legacy for the future

20. Program Success through Execution Implementation Session Moderator: John Rigby (JBEK) Panelists: Vic Kleinfelter (DuPont) J. Peter Ellefson (DuPont) David Adams (MK Corp.) Presentation: David Adams Safety Labor Relations Work Force Productivity Pete Ellefson Design Tools Pipe Rework Responsiveness to Change Relationships Value-Added Results