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API proposes conducting a three-phase industry study of historical maintenance costs and practices for above ground steel storage tanks. The study is limited to those tanks, which are maintained in accordance with API 653. Participants will submit cost related data (both capital and expense) along with information regarding tank size, service, and maintenance on a standardized form. At the end of phase 1, participants will receive a written report with graphs showing performance ranges on a cost per shell capacity basis for various cost components. Reports will be company specific to protect confidentiality. Each company’s report will contain graphs showing the company’s results versus participant mean and quartiles, and recommendations for further investigation. Exhibit 1 lists the 96 graphs, which will be included with the Phase 1 reports.
Based on Phase 1 results, Phase 2 will conduct more intensive analysis of costs for selected cost components and subcomponents. Phase 3 will consist of moderated practice and results sharing where industry participants can learn from each other to improve their maintenance practices. Companies may elect to participate in Phases 2 and 3 or discontinue participation after Phase 1.
Tanks Categories
Phase 1 anticipates collecting historical maintenance cost data for the following nine categories:
Costs will be presented in a manner that preserves confidentiality. Submissions will be further stratified by various tank characteristics such as size and type of construction. Subdivisions by region are not anticipated in Phase 1 but are planned as part of Phase 2. The study will be participant focused with each participating company allowed one representative on the project steering team.
Data Collection
The study team lead by API and composed of industry experts has designed the data collection and submission form, which may be found in Exhibit 2. As a minimum, the following information for each tank is required for Phase 1.
Ideally, cost will be submitted for 2006, 2007, and 2008. Detailed definitions for each component included on the data collection instrument are being developed to insure uniform data submission. Each cost component is further subdivided in the following number of subcategories as shown on Exhibit 2.
While Phase 1 will only analyze costs at the component level (and not subcomponents), Phases 2 intends to make extensive use of subcomponent data. The study team recommends participants gather and submit all costs by subcomponent during Phase 1 rather than simply by total component for maximum efficiency.
Participation
The study is North America specific and is open to all operating companies. To ensure confidentiality of data each category must have at least 7 participants
Study Costs
Cost per participant for Phase 1 is $7,500 which includes the cost of one of the nine categories above. Additional categories are priced at $2,500 each. At least 13 total participants are needed for the study to proceed with the study.
Schedule
Preliminary non-binding response forms to this solicitation are due back by August 3, 2009. Depending on industry response, the project should formally begin in early September and conclude by the end of October. Study length will depend on a large extent to how quickly participants can collect and submit their data.
The next two phases will be formalized and scoped based on participant input during the Phase 1 process. Participation in Phases 2 and 3 is not required to participate in Phase 1.
Questions
If you have questions, please contact Pamela Gibson in the API Statistics Department at (202) 682-8528 or gibson@api.org.