QA-M-006 Quality Assurance Manual Management Responsibility

Table of Contents

1. General Quality Program - Management Statement
2. General
3. Easy To Do Business With (ETDBW) Council
4. Administrative Organization and Responsibilities
5. Project Organization and Responsibilities
6. Resources
7. Management Representative
8. Management Review
9. References
10. Attachments

1 General Quality Program - Management Statement

Company's goal, as an engineering contractor in today’s highly competitive industrial market, is to achieve total client satisfaction.

By providing efficient and economical services to develop safe, reliable and suitable products that conform to all applicable requirements, Company achieves a quality performance that enhances its reputation and company strength.

Company’s performance is founded on its internationally recognized Total Quality Management System. The Quality Assurance Manual, together with the procedures, prescribes the overall policy, directions, and methods required to be implemented by all personnel.

The General Manager is ultimately responsible for the quality of Company’s performance, while the Manager of Quality Assurance is charged with the responsibility for maintaining the procedures and standards, monitoring its effectiveness and implementing a continuous improvement program. The Manager of Quality Assurance’s authority to overview all functions of the organization and to recommend and/or initiate improvements, is fully supported by the General Manager.

Quality goals shall be established which meet customer and company expectations.

All employees are responsible for upholding and enhancing the quality of Company’s performance through knowledge, dedication to their tasks, awareness of the procedures, standards and regulations that govern their work and appreciation of their role in the company-wide team.

The confidence of our clients in the quality of service provided by Company must be continuously reinforced by our dedication to maintain and seek methods of improving every element of our operations that contribute to total client satisfaction.

Original signed by .......

<Name>
Vice President & General Manager Europe

1 October 1999

2 General

This section covers the quality related responsibilities of the various levels of management within the Company organization.

3 Easy To Do Business With (ETDBW) Council

To make total quality performance a commitment throughout the company an ETDBW Council is established.

The ETDBW Council is composed of the staff meeting members or their delegates from the following departments/disciplines:

• Company Management (Chairman)
• Quality Assurance and Safety (Facilitator)
• IT
• Construction
• Project Management
• Business Development
• Contracts
• Process
• Human Resources
• Engineering
• Technical Operations
• Project Controls
• Procurement
• Accounting
• Environmental

The ETDBW Council interfaces with all other department and group managers to seek advice, advance awareness and promote quality activities.

4 Administrative Organization and Responsibilities

4.1 Organization

The administrative organization chart shows the various functions within the Company (ref.6.9.2). The main operation departments are detailed below:

4.1.1Projects Department

This department encompasses project management.

From this department, Project Managers are assigned to the individual projects.

4.1.2 Project Controls Department

This department supports proposals and project activities with estimating, cost-control and planning/scheduling services.

For specific projects, personnel may be assigned from this department to provide these services within the task-force environment.

4.1.3 Process Engineering

Company’s Process Department comprises six different groups representing the following activities:

• Process Engineering
• Process Control
• Thermal Engineering
• Flowsheet Drafting
• Commissioning
• Library

4.1.4 Engineering

The groups for project engineering, specialist engineering and design are included within the Engineering Department. Furthermore Company 's authority engineer acts as a staff function to these groups.

From the project engineering group personnel are assigned to projects to act in the capacity of project engineers and engineering managers.

Company's specialist engineering comprises seven different design/engineering groups, representing the following disciplines:

• Piping design group, including material control and automated piping design.
• Piping engineering group, responsible for piping specifications and pipe supports.
• Stress Engineering group dealing with pipe stress.
• Civil, Architectural, Structural, Underground Piping, Painting and Insulation group.
• Mechanical Engineering group, dealing with rotating equipment, heaters, boilers, flue stacks, flare stacks, solids handling equipment, fire fighting, heating, ventilation, air-conditioning, noise abatement, vessels, towers, reactors and heat exchangers.
• Control Systems groups, dealing with process control and instrumentation.
• Electrical group in charge of power, lighting, cathodic protection, earthing and telecommunication systems.

4.1.5 Procurement

The Procurement Department is responsible for the procurement of equipment and materials for the projects undertaken by Company.

This department is split into three groups, each under the control of a sub-department manager. The sub-departments are:

• Purchasing
• Subcontracting
• Expediting, Traffic and Vendor Print Control
• Inspection

Subcontracting
The subcontracting department assists in the preparation, review, approval and placement of subcontracts from a commercial aspect. In certain cases, dependent on plant size and location, it may be necessary for these activities to be carried out at the plant site by nominated personnel.

Procurement Assistance
Procurement assistance to other departments or other offices includes the preparation of manpower estimates and write-ups for proposals, market surveys relative to price levels and/or shop loadings, the recommendation of appropriate suppliers, and general information relative to local purchasing conditions.

On an as required basis, the office in The Hague may call upon the resources of the worldwide Company procurement offices to assist in local expediting and inspection activities.

4.1.6 Construction

The Construction Department includes administration, construction management and specialists.

For specific projects, personnel are assigned to home office and site functions as required.

4.2 Responsibilities

Administrative responsibilities of all personnel shall be defined in proper function descriptions (ref.6.9.3).

Quality related responsibilities of Company's senior management are listed below:

4.2.1 General Manager

The General Manager shall be responsible for:

• establishing the policy of the Quality System of Company.
• ensuring that the Quality System and Company Six Sigma Program is implemented.
• chairing the ETDBW Council.

4.2.2 Manager of Quality Assurance (QA)

The Manager of QA reports to the General Manager. He shall be responsible for:

• representing Company on all matters pertinent to the Quality System.
• establishing, implementing and monitoring of the Company Quality System.
• establishing, implementing and monitoring of the Company Six Sigma Program.
• assisting departments in developing and subsequently implementing adequate procedures.
• reviewing the organizational relationships as they affect quality.
• determining and reporting the principal causes of nonconformances.
• training and advising personnel for quality-related activities.
• coordinating quality improvement activities.
• supporting the ETDBW Council.

4.2.3 Department Managers shall be responsible for:

• the quality of work carried out by personnel within their respective departments
• ensuring that sufficient personnel are assigned to the work and are adequately qualified and experienced to perform their duties.
• verifying that approved procedures are adopted within their own department and that necessary complementary procedures are raised, updated and implemented.
• ensuring that all staff are familiar with company procedures and have ready access to them.

5 Project Organization and Responsibilities

5.1 Introduction

The effective management of a project encompasses consideration of the following major elements:

• contractual requirements for quality, costs and schedule must be satisfied in the most efficient manner.
• a management concept or philosophy must exist that enables accomplishment of the above objectives.
• a project organizational structure, with well-defined responsibilities and authority must exist.
• the necessary skills, tools, techniques and procedures must exist and be properly utilized.

5.2 Organization

For every project a Project Manager is appointed. The composition and size of a project team depends on the nature and scope of the project. The Project Manager is responsible for all aspects of the project towards the client.

Company applies the project task force concept. Team members are assigned to the project from the various departments dependent on the nature and scope of the project. See attachment 2 for a typical project organization.

5.2.1 Project Sponsor

A member of Company's senior management may be named as the Project Sponsor.

The role of the Project Sponsor is to keep himself aware of the progress of the project, to be alerted to potential problems and to prevent such problems if possible. This function allows for a direct and effective line of communication for the Project Manager to Company's Management and for directorate level interfacing between Company and the client.

5.2.2 Project Manager

The overall responsibility for execution of the project is vested in the Project Manager. He ensures that the work meets the contractual requirements, is planned and executed within the agreed schedule and budgets and that proper quality standards are maintained. The Project Manager represents Company to the client's project representative.

5.2.3 Project Quality Assurance

The Manager of Quality Assurance supports and assists the Department Managers and organizes Auditors for the assurance of quality of the work and supplies included in Company's scope. This function does not relieve Company's personnel of their prime responsibility for the quality of work.

5.2.4 Project Safety

The Manager of Safety assures that the activities carried out by the functional groups within the project satisfy the requirements of the safety program (see section 26).

5.2.5 Project Controls

The Project Controls Manager monitors the progress and flow of work among the production groups; supervises and coordinates information from designated Planning/Scheduling, Estimating, Cost Engineering, Material Control, Project Administration and Project Accounting groups members as well as from the engineering production groups; analyzes and evaluates progress, identifies current and potential project control problems, evaluates alternative solutions and preventative measures, and makes recommendations to the Project Manager for subsequent action.

The Project Controls Manager is supported as required by specialists with the following functions:

• Planning and Scheduling
• Estimating
• Cost Engineering
• Material Control Coordination
• Project Accounting

5.2.6 Engineering

Within engineering, the functions hereunder described may be assigned dependent upon specific project requirements.

Project Engineering Management
The Project Engineering Manager directs, controls and coordinates the work carried out by the production groups of process engineering, project engineering and design engineering.

Process Engineering
Necessary process engineers, under the direction of a Process Engineering Supervisor are assigned to a project. Their activities may include to:

• develop process schemes, based on economical/technical evaluation studies as required and establish the basis of design.
• develop utility flow requirements including material balances.
• determine relief loads for potential emergency conditions from individual sources and for their combinations and design relief systems.
• execute HAZOP-studies as required.
• prepare basic process design documents including equipment data sheets.
• prepare engineering and utility flow diagrams and corresponding line designation tables.
• provide thermal rating and tube layout of shell and tube heat exchangers.
• review work produced by other groups and supplier documents to ensure that process requirements are satisfied.
• prepare operating manuals.

Project Engineering
Necessary project engineers under the direction of lead Project Engineers are assigned to the project. Their activities may include to:

• coordinate the overall engineering and design activities of the project.
• guide the preparation of plot plans.
• prepare requisitions for certain special equipment and service.
• participate in technical reviews and supplier selection for equipment and materials.
• prepare certain subcontract documents.
• prepare mechanical catalogs, spare parts lists, lubricating schedules and safety data sheets, as required.

Design Engineering
Activities of specialist engineers and designers may be coordinated by a Design Engineering Supervisor or Design Coordinator. Managers of each discipline give direction and assistance in technical matters, exercise quality and man-hour reviews.

Specialist Engineers' activities may include to:

• establish project specifications and standards.
• translate process requirements into detailed specifications for materials and equipment.
• prepare requisitions.
• determine and specify the fabrication quality requirements.
• specify the acceptable tolerances and to define acceptance limits.
• specify required tests in consultation with the inspection department
• assist the Inspection group in witness tests on critical equipment.
• review bids for technical acceptability for conformity with the design specifications.
• assist in site check-out and start-up.

The designers operate within the confines of the engineering specifications to develop the detailed drawings for fabrication and erection.

5.2.7 Procurement

The procurement functions include:

• Purchasing
• Expediting
• Traffic Control
• Vendor Print Control (VPC)
• Inspection
• Subcontracting

These functions are collectively supervised and coordinated by the Project Procurement Coordinator (PPC).

The procurement activities include:

General

• prepare the procurement section of the Project Procedure and Execution Manual.
• furnish bidding and delivery times of equipment and materials for planning purposes.

Purchasing

• establish suppliers list for client's approval.
• issue inquiries for equipment and materials.
• expedite quotations.
• make commercial evaluation of supplier quotations including preparation of commercial bid tabulations and recommendations for technical evaluation by Engineering Departments.
• undertake negotiations with selected supplier(s) in respect of price, delivery, payment terms, penalty conditions, etc.
• prepare purchase orders for issue to suppliers.
• exercise commercial control over the purchase order throughout its life, including the issue of amendments to cover agreed changes of the scope, specifications or conditions of the purchase orders.

Expediting

• evaluate expediting priorities according to schedule criticality, and continuously update according to supplier performance and construction progress.
• expedite by visiting suppliers of equipment and major bulk materials, including expediting for drawings essential to Company's engineering progress, placement of suborders, fabrication progress and furnishing of certificates, test data, etc.
• expedite by visiting major subsuppliers whose deliveries govern prime suppliers' fabrication schedules.
• supplement the outside expediting effort by means of office expediting and follow-up of promise dates obtained by visits.
• office-expediting by means of letter, fax and telephone all minor materials not expedited by visit.
• monitor or arrange (according to necessity) major and/or urgent shipments to site.

Establish and maintain, on a continuous basis, Material Status Reports indicating up-to-date delivery promises in relation to original promises and site required dates.

Vendor Print Control

• expedite by office contact all required suppliers' documents and data.
• expedite by prompt handling through the Company organization and return to supplier all documents needing review and approval.

Traffic

• select, by means of investigation and obtaining of competitive bids, a suitable shipping and forwarding agent having establishments in the major shipment and arrival ports.
• supervise and control all shipping and forwarding activities for the project.

Inspection

• conduct supplier/supplier assessments and evaluation; develop inspection schedules; conduct pre-inspection meetings.
• inspect equipment and materials for conformity with specification and applicable codes in accordance with Company standard practices.
• coordinate Company inspection with government-authorized agents if the later are involved.

Subcontracting

• establish subcontractors list for client’s approval.
• issue inquiries for subcontracts and expedite quotations.
• make commercial evaluation of subcontractor quotations.
• undertake negotiations with selected subcontractors.
• prepare purchase orders for issue to subcontractors.
• exercise commercial control over the subcontracts.

5.2.8 Construction

The construction effort on projects is split in two phases; Home Office and Site.

Home Office

In principle, a Construction Representative is assigned to a project at the start.

During the Engineering phase, services consist of:

• review proposed plan of action, adjust and start implementation of construction execution activities.

• rearrange proposal estimate data to the plan of action and actual task settings.

• review constructability of design.

• review and assist in updating project schedule as more defini­tive information becomes available.

• prepare site administrative procedures, reporting systems and forms for site use.

• plan and schedule construction staffing.

• develop specific site and safety regulations.

• liaise and monitor cost, progress, reporting, site purchasing, accounting, materials and site engineering controls.

• maintain industrial and labor relations.

• coordinate general construction between site and home office.

Site Activities

For a typical construction organization see attachment 3.

Full project construction execution responsibility includes the following main areas of activity:

Construction Management

• carry complete responsibility for construction execution of the project.
• supervise the coordination and control of all site activities.
• control all aspects of safety.
• control planning and scheduling of the construction work.
• ensure quality of site workmanship.

Site Operations

• organize, coordinate and direct the execution of site work.
• exercise safety responsibility.
• request and review the quantity and quality of site manpower.
• ensure that proper tools and construction equipment are available and properly utilized.
• exercise progress control of site work.
• supervise and/or inspect and control quality of the site workmanship, materials and plant equipment.
• supervise site testing and witness records.
• provide start-up assistance (if required).

Site engineering, subcontracts administration and site control

• collect and classify all engineering information provided by the Home Office.
• distribute engineering information and subsequent revised information.
• interpret drawings and specifications as required.
• organize and disseminate engineering information to instructions and task settings for the site.
• organize filing and recording systems in accordance with internal and external requirements.
• distribute appropriate technical construction data to client, officials and Home Office.
• provide for site layout, site engineering and control duties.
• maintain quality assurance.
• administer subcontracts including maintenance of all documentation.
• perform man-hour and cost allocation and quantity survey­ing.
• perform productivity analysis.
• plan and schedule control of the construction work (site control).
• report cost and progress of site work (site control).
• maintain inspection records reports and punch list control.
• control requisitions, if applicable, for construction equipment, site materials, supplies and tools.

Site administration, safety, security and first aid

• provide for material receiving, warehousing and issuing.
• maintain material and tool control.
• purchase and expedite site materials as required.
• manage, recruit and pay site personnel if applicable
• administer manhours worked.
• control safety, security and first aid.
• conduct site accounting and audits.
• arrange general services and office maintenance.
• provide medical services.
• arrange translation services (if required).
• provide camp and catering services (if required).

If specified, construction responsibility may be restricted to advisory and liaison services, consisting of:

• assistance to client concerning construction execution and related matters.
• inspection and quality control in relation to engineering documentation.
• interpretation of drawings and specifications.
• liaison, if appropriate, with local authorities.
• liaison between the Site and Home Office.

5.3 Responsibilities
Specific project related responsibilities of key personnel shall be defined in the Project Procedure and Execution manual (ref.6.9.4).

6 Resources

For each project, the Project Manager has the primary responsibility for ensuring that the resource requirements (management, personnel and verification personnel) are identified.

The functional departments provide adequate resources, including assignment of trained personnel.

Personnel shall be assigned that have the necessary qualifications and background to perform their work at the necessary level of quality.

In order to verify that applicable elements of the Quality Assurance Program have been developed, documented and effectively implemented, the program is frequently audited in accordance with written proce­dures and checklists. Personnel not having direct responsibility in the areas being audited and having proper qualifications perform the audits.

7 Management Representative

The Manager of Quality Assurance and his personnel are assigned and so organized as to be free from commercial, schedule and project restraints and to represent Company on all matters relating to quality assurance.

8 Management Review

The management of Company shall regularly review the quality system to ensure its continuing suitability and effectiveness (ref.6.9.1). The management reviews shall be carried out by the ETDBW Council. The results of all such reviews shall be recorded. Records shall include details of the review findings, conclusion and recommendations. The General Manager shall assign resources for the implementation of agreed changes and/or activities.

9 References

10 Attachments

1. Project Organization - Typical

2. Typical Construction Management Organization