Guideline 000.225.

1000
Date 22Dec2016
Page 1 of 10

LICENSOR EVALUATION & SELECTION

TABLE OF CONTENTS

1.0 PURPOSE...................................................................................................................................................... 2

2.0 APPLICATION............................................................................................................................................... 2

3.0 INTERFACING DISIPLINES.......................................................................................................................... 2

4.0 DEFINITIONS................................................................................................................................................ 3

5.0 GUIDELINE REQUIREMENTS...................................................................................................................... 3

6.0 EXECUTION OF REQUIREMENTS............................................................................................................... 4

7.0 RESOURCES................................................................................................................................................ 6

8.0 REFERENCES............................................................................................................................................... 6

9.0 ATTACHMENTS, ADDENDA........................................................................................................................ 7

Copyright © 2016, Fluor Corporation. All Rights Reserved. Process Technology

 Guideline 000.225.1000
Date 22Dec2016
Page 2 of 10

LICENSOR EVALUATION & SELECTION

1.0 PURPOSE

This document establishes guidelines for the process to be used in the development of a
Request for Proposal (RFP) and selection of a potential technology licensor.

2.0 APPLICATION

This document applies to Process Engineering activities related to the request for proposal
process for potential licensors.

3.0 INTERFACING DISIPLINES

 Process Engineering
 Project Management
 Legal
 Contracts
4.0 DEFINITIONS

Not Used

5.0 GUIDELINE REQUIREMENTS

The Process Engineering Department is routinely called upon by Clients to obtain information on
alternative licensed process technologies for use in licensor evaluation and selection. This
guideline involves:

5.1 Identification and screening of potential licensors

6.0 Development of an appropriate evaluation plan

7.0 Preparation and issuance of inquiry documents to the licensors

8.0 EXECUTION OF REQUIREMENTS

8.1 General

Preparation of a comprehensive RFP document for alternative licensed processes is

contingent upon an adequate understanding of Client requirements and the
communication of these, as well as information needs, to the various licensors. The RFP
is developed to provide each competitor with a consistent basis.

The process of preparing the RFP consists of three main phases:

 Planning
 Preparation of the Inquiry Document
 Evaluation of Licensor Responses

Non Disclosure Agreements (NDAs) with potential licensors, protecting confidential

information provided by licensors, as well as the dissemination of results of the evaluation
to prevent unauthorized information “leaks”, are key issues that need to be addressed

Copyright © 2016, Fluor Corporation. All Rights Reserved. Process Technology

 Guideline 000.225.1000
Date 22Dec2016
Page 3 of 10

LICENSOR EVALUATION & SELECTION

early in the evaluation process. (practice 000.225.0230: Confidential Information and
Secrecy Agreements).
8.2 Responsibility

The overall responsibility will vary depending upon whether the RFP is for budgetary
purposes or a commercially binding bid for the purchase of a technology. In the former
case the Lead Process Engineer/ Specialist has the overall responsibility however, it may
be necessary to involve other departments such as legal. In the latter case the Contracts
group should be responsible for the overall RFP with the technical sections provided by
the Lead Process Engineer/ Specialist and it will be the Contracts’ group responsibility to
engage the appropriate groups within Fluor and the Client as required.
Whichever group has overall responsibility, they should ensure that appropriate
departments are involved in the evaluation, and all documents have the approval of Fluor
Management prior to releasing these to the Client and/or the licensors. They are also
responsible for obtaining Client approval where applicable.
8.3 Procedure Overview

The preparation of the RFP can vary a great deal in its complexity, depending on the
complexity of the project, the number and nature of the units, and Fluor’s role in the
project. The objective of the RFP is licensor evaluation and selection in order to prepare
a final recommendation to the Client. The Lead Process Engineer/ Specialist is
responsible for determining the effort required for a specific evaluation.

Process Management, Project Management, and the Client should be consulted as to the
type of submittal required. If evaluation and selection is required as part of a study, a
budget priced, and generic licensor submittal may be adequate. On the other hand, if
evaluation is to purchase a licensed technology, a formal inquiry with contractual terms is
required (for which a purchasing agent is necessary). The Licensor response will be
more detailed and specific. Such submittals take much longer to prepare than a generic
response; hence adequate time should be provided in the schedule for licensor to
prepare purchasing quality submittals, as well as for review and evaluation.

8.3.1 Planning

The planning phase involves confirmation and agreement of the scope and objectives of
the proposal. There is significant Client involvement and input required during this
phase. The overall approach to the evaluation process is done during this phase. The
following steps are recommended:

 Develop a list of potential licensors of technology.

 Confirm this list internally and with the Client.
 Prepare a short list of licensors. For a pre-feasibility study, the list should be limited
to a maximum of four to six licensors. Some general criteria that are commonly used
include:

o Fit for use and compatibility with available feedstock

o Availability of complementary or other technologies from same Licensor

which tie-in with Clients overall or future plans

Copyright © 2016, Fluor Corporation. All Rights Reserved. Process Technology

 Guideline 000.225.1000
Date 22Dec2016
Page 4 of 10

LICENSOR EVALUATION & SELECTION

o Licensor track record

o Licensor relationship with Client

o Licensor relationship with Fluor

o Licensor presence in geographic area (can be an important criterion for

international jobs – particularly in developing economies)

o Licensor fees (if this information is available)

o Licensor’s financial situation

o Unique characteristics of the licensor and/or technology

Review the short list internally and with the Client. Note that sometimes the Client
may provide a short list. The form included in Attachment 01 to this practice can be
used for recording the logic behind the selection. Ensure that secrecy agreements
are in place for the short-listed licensors.

 Define process parameters for licensor submittal. These include:

o Feedstock, flow rate, quality/composition

o Products and specifications

o The scope of the proposal

o Utilities available at site (where applicable) – specify Client preference for

fuels to be used.

o Production rates for key and associated products

o Maximum on-line capacity, turn-down ratio, run lengths between turnarounds

o Schedule requirement

o Client preferences

o Constraints relating to:

 Feed materials (availability, specification and cost)
 Utilities and Offsites (availability, specification and cost)
 Environmental (any environmental or disposal restrictions specific to
site)
 Any special site (infrastructure) or utility requirements not normally
available
 Processes in-place at the Client site (compatibility issues?)
 Requirements of proprietary/single source equipment/ hardware/

Copyright © 2016, Fluor Corporation. All Rights Reserved. Process Technology

 Guideline 000.225.1000
Date 22Dec2016
Page 5 of 10

LICENSOR EVALUATION & SELECTION

instrumentation critical for maintaining Licensor guarantees

Requirements/parameters developed for the enquiry should be specific for the

Client’s requirements. Note, however, that it is unethical to structure
requirements/parameters so as to exclude all licensors except the one preferred by
the Client.

 Define required information that is expected from the licensor (see Attachment 02)
For each item, indicate that it must be specific for the project or that a generic
example or go-by is acceptable. Also indicate which data is a “must-have”, i.e. not
providing critical data will result in exclusion from further evaluation.
 Consideration can be given to a two phase approach to issuing an RFP. In this case
the first phase would involve issuing a simplified RFP with limited critical information
could be provided to a large group of licensors which is used for shortlisting /
qualification purposes. The second phase would involve issuing a detailed RFP to the
shortlisted licensors.
 Be sure to state specifically in the document whom to contact with questions
regarding the proposal. One individual should be the contact point; it will be their
responsibility to disseminate any questions to the relevant parties within the Fluor
and the Client teams. The Lead Process Engineer must be included in all comments
or questions from licensors or any other party involved.
 Develop an overall schedule for issue of inquiry and licensor response. Since Project
Management and Client are involved in this exercise, one should obtain their
approval for schedule. This will help them plan and provide the required resources.
As noted above, obtaining Non-Disclosure Agreements with Licensors is a critical
step. This can take up a significant amount of time and this must be properly
accounted for in the schedule. It is recommended to engage in this immediately after
the licensors have been selected.

Copyright © 2016, Fluor Corporation. All Rights Reserved. Process Technology

 Guideline 000.225.1000
Date 22Dec2016
Page 6 of 10

LICENSOR EVALUATION & SELECTION

8.3.2 Preparation of the Inquiry Document

The inquiry document should provide sufficient information to the licensors so that they
can respond in an effective manner. Information to all licensors must be consistent to
allow a “level field” evaluation of competing technologies. However, each inquiry will
have its own special features. The Lead Process Engineer/ Specialist exercises
judgment in developing an appropriate inquiry document. The document should stress
the requirement that licensor respond in the format stated in inquiry.

Typical content of the Inquiry Document is included in Attachment 02 to this guideline. In

addition a go-by template for a generic unit has been included in Attachment 06 to this
guideline.

The inquiry document should be reviewed by Process Management and, if

necessary/applicable, the Client. The approved inquiry document should be sent to the
agreed short list of licensors.

A system needs to be in place to handle questions and comments from licensors to

ensure that all licensors have access to the same information. A single point of contact
should be established between the Licensor and the Fluor / Client teams. All
communications should be through that point of contact and should be in writing.
Communications with the selected Licensor(s) after award should be handled in
accordance with practice 000.225.1005: Licensor Interfaces.

8.3.3 Evaluation of Licensor Responses

Upon receipt of the Licensor’s response to the Inquiry, the information contained in the
response should be reviewed against the inquiry to verify that the all pertinent information
has been provided. It is recommended to do this on an item by item basis in a tabular
format. The Licensors should be asked to provide any missing items or clarify why they
cannot provide the information. A bid clarification meeting may be conducted with each
bidder, if desirable.

Copyright © 2016, Fluor Corporation. All Rights Reserved. Process Technology

 Guideline 000.225.1000
Date 22Dec2016
Page 7 of 10

LICENSOR EVALUATION & SELECTION

The information obtained from the Licensors will be analyzed in a comparative form using
a Kepner-Tregoe (KT) Analysis. The analysis is broken down in to four main categories
addressing Licensor Qualifications, Technical Considerations, Economic Considerations
and Commercial Considerations. Each of these categories is assigned an overall
weighting. The overall categories are broken down in to sub sections. Each sub section is
weighted accordingly. Attachment 04 to this practice provides a typical KT Analysis form
with the overall categories and sub sections with weightings. Since the requirements will
vary from project to project the categories, subsections and weighting should be agreed
with the Client from the outset. The KT Analysis is completed by ranking the Licensors
against the category. This should be done on a First, Second, Third place basis (the total
number of placing will depend upon the number of licensors). A numerical value shall be
assigned to each rank, the value will depend upon the total number of Licensors. For
example if there are three licensors the First place will be assigned a value of “3”. The
second place will be assigned a value of “2” and the third place would be assigned a
value of “1”. The score of each sub section is then obtained by multiplying the weighting
by the numerical value. For example if the weighting is 20 the score for the first placed
licensor would be 20 x 3 = 60. The second and third placed licensor would score 40 and
20 respectively. The scores for each item listed in the subsection in a category are
totalized. The overall score is then determined based on the score for the category and
the overall weighting of the category. Attachment 03 to this practice can be used to
summarize the results of the KT Analysis.

Once the licensor selection has been made, Attachment 05 to this practice can be used
to summarize the Licensor Selection Efforts, if necessary.

8.4 Work Process

Activity Responsibility References Comment

1  Develop list of potential licensors. Lead Process Client is involved in
Confirm with Project Management and Engineer/ Specialist approval of short list and
Client. developing evaluation
 Prepare short list of licensors. criteria.
 Establish basis and criteria for evaluation.
 Ensure secrecy agreements are in place
with short listed licensors.
2 Define Inquiry as Budget versus Formal. Lead Process Obtain input from Project
Engineer/ Specialist Management, Process
Management and the
Client.
3 Generate an inquiry document. Obtain Process Engineer/ 000.100.F1000 Obtain site information
approvals and send to Fluor purchasing agent. Specialist from Client.

4 Send inquiry to Licensors. Contracts Manager May be Process Engineer/

Specialist if budgetary
only.

Copyright © 2016, Fluor Corporation. All Rights Reserved. Process Technology

 Guideline 000.225.1000
Date 22Dec2016
Page 8 of 10

LICENSOR EVALUATION & SELECTION

Activity Responsibility References Comment
5 Review each licensor package to confirm that Lead Process Involve Client if possible,
the content matches the inquiry: Engineer/ Specialist but not necessary.
 Review supplied data and request
additional information or clarification as
necessary.
 Provide additional information/
clarification as needed, to ALL licensors
to ensure “level field” approach during
evaluation
 Organize Bid Clarification meetings (if
desired)
6 From licensor supplied data, estimate or obtain Project Controls Involve Estimating as
quotations for capital equipment costs. Procurement appropriate.
7 Estimate plant installation costs at Client’s site. Project Controls Constructibility Study
Construction Modularization
Skid Mounting. Involve
Estimating as appropriate.
8  Check suitability and availability of Process Engineer/
specified feedstock to meet licensor Specialist
specifications.
 Identify requirements for pre-treatment to
meet feedstock specification. (Pre-
treatment equipment to be added if not
already included by Licensor.)
9  Review and compare the requirements for Process Engineer/
additional chemicals and catalysts. Specialist
 Review and compare emissions and waste
treatment.
10 Identify startup requirements. Process Engineer/
Specialist
11  Review and compare the operational Process Engineer/
philosophies for integration into existing Specialist
facilities against a policy of stand-alone
operation.
 Review and compare controls and sparing
philosophy.
12 Review and compare the requirements for Process Engineer/
Utility Systems. Specialist
13 Review and compare catalyst specification, Process Engineer/
availability, supply, life cycle time and Specialist
performance guarantees.
14 Review and compare Material Selection Process Engineer/
Specialist
15 Review and compare Plot requirements Process Engineer/
Specialist
16 Attach cost elements to all of the above points Process Engineer/
to give capital outlay figures for the design and Specialist
build-phase of the projects.
17  Review and compare plant turndown. Process Engineer/
 Review and compare ease of expansion (for Specialist
future).

Copyright © 2016, Fluor Corporation. All Rights Reserved. Process Technology

 Guideline 000.225.1000
Date 22Dec2016
Page 9 of 10

LICENSOR EVALUATION & SELECTION

Activity Responsibility References Comment
18 Review and compare staffing requirements Process Engineer/
(operations, maintenance, quality control, Specialist
supervision)
19 Review and compare maintainability and Process Engineer/
maintenance expenses Specialist
20 Review and compare the efficiency and yield Process Engineer/
performance of the process schemes. Specialist
21 Review and compare the catalyst operational Process Engineer/
life and scrap value of spent catalyst. Specialist
22 Identify any byproducts and their associated Process Engineer/
processing, operational, or environmental Specialist
problems.
23 Undertake a preliminary environmental HSE Engineering
assessment study to focus on the impact of the
siting and operation of each process.
24 Evaluate the reliability of the proposed designs RAM Specialist As required.
to produce onstream factors for each
option/licensor.
25  Review the track record of the process Process and
design and the licensor. Mechanical
 Identify any prototypes, innovative design, Engineers /
or unproven technology included in the Specialists
design package.
26 Where possible, obtain references from existing Lead Process
operators of the processes involved. Engineer/ Specialist
27  Where possible, attach a financial figure to Project Controls /
the above points to estimate capital and Process Engineer/
operating costs for the plant. Specialist
 When financial analysis is difficult or
impossible, assess the risk associated with
the point in question.
28 Prepare an evaluation report that highlights the Lead Process
comparison between the various licensors Engineer/ Specialist
based on:
 Licensor Qualifications
 Technical Considerations
 Economic Considerations
 Commercial Considerations

9.0 RESOURCES

Not Used
10.0 REFERENCES

Project Management
Project Requirements Checklist
000.100.F1000
Workbook
Process Engineering
Confidential Information and Secrecy
000.225.0230 000.225.1005 Licensor Interfaces
Agreements

Copyright © 2016, Fluor Corporation. All Rights Reserved. Process Technology

 Guideline 000.225.1000
Date 22Dec2016
Page 10 of 10

LICENSOR EVALUATION & SELECTION

11.0 ATTACHMENTS, ADDENDA

Attachments
Attachment 01: Selection of Short List of Licensors of Technology

000.225.1000
Attachment 01_Rev0.doc

Attachment 02: Information for the Inquiry Document

000.225.1000
Attachment 02_Rev0.doc

Attachment 03: Summary of K-T Analysis

000.225.1000
Attachment 03_Rev0.doc

Attachment 04: K-T Evaluation Worksheet

000.225.1000
Attachment 04_Rev0.xls

Attachment 05: Table of contents for Typical Technology Evaluation Report

000.225.1000
Attachment 05_Rev0.doc

Attachment 06: Go-by Licensor RFP for a Generic Unit

000.225.1000
Attachment 06_Rev0.doc

Addenda
None

Copyright © 2016, Fluor Corporation. All Rights Reserved. Process Technology