Table of Contents
1. Purpose
This procedure describes the initialization, selection, ordering and execution of subcontracting engineering services for a specific project to an engineering contractor, hereinafter referred to as the "contractor".
2. General
This procedure is not to be used for Multiple Office Operations, "joint ventures" where Company works together with an engineering partner or the utilization of temporary staff hired through an agency but stationed in our office.
3. Responsibilities
3.1 The Manager of Engineering, in close cooperation with the Department Group Manager, is responsible for determining the need to obtain engineering services from a qualified outside source.
3.2 The Group Manager is responsible for assuring the quality of the purchased engineering services is provided through an adequate quality control program.
3.3 The relevant Project Manager is responsible for obtaining Client's approval when required to subcontract engineering services, verification/approval of invoices and final acceptance of the services.
3.4 The relevant Lead Specialist Engineer is responsible for the scope definition, preparation of the requisition, review of the bids, recommendation for selection of supplier and subsequent execution phase. During this execution phase, he acts as the focal point, supervises the contractor, coordinates between all parties concerned, reports on status to the Project Manager and Department Group Manager, reviews/approves the "Work" performed by the engineering subcontractor.
3.5 The Project Procurement Manager is responsible for all commercial aspects, bid tabulation/evaluation and issuing of the purchase order.
4. Procedure
4.1 Initialization to Subcontract Engineering Services
The initiative to request the subcontracting of engineering services is taken by the Department Group Manager in consultation with and approval from the Manager of Engineering as well as the relevant Project Manager.
The Project Manager shall obtain approval from the Client if required and/or discuss this approach with Company Sales Department to settle payments by the Client to Company.
4.2 Requisitioning/Scope of Definition
The relevant Lead Specialist Engineer shall prepare a requisition/ scope definition covering, but not limited to, following subjects:
4.2.1 Company project cost code.
4.2.2 An exact description of the scope of services and deliverables to be performed together with reference to the applicable drawings, specification, standards and codes.
Type of contract and pricing, rates per category, overtime rates etc.
4.2.3 Documents required from contractor, both with his quotation and after purchase order.
These documents shall include control documents such as planning schedule, progress reporting, manpower planning etc.
General requirements such as:
- Work shall be done by the engineering contractor and in his office
- Contractor staff on the project must be permanent staff
- Resumes of the proposed key candidates
- Conditions and approval to make overtime
- Weekly time sheet requirements
- Change order procedure
- Contractor's quality assurance manual.
- Project quality plan
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Computer programs, CAD drafting systems or tools to be used.
The requisition together with a request for bids form (BN-UP-2) shall be issued via the Group Manager and Manager of Engineering to the relevant Project Manager for release to obtain quotation, through the Project Procurement Manager.
The instructions and secrecy agreement contained in Attachment I to this procedure shall form part of the bid package.
4.3 Evaluation/Selection
The quotations, addressed to and received by the Project Procurement Manager, shall be sent to the Manager of Engineering, who shall ensure via the Group Manager that proper "technical" evaluation is prepared by the Lead Specialist Engineer.
A copy of the quotations shall be sent to the Project Manager.
The commercial bid tabulation/evaluation shall be prepared by the Project Procurement Manager. Both commercial and technical bid tabulations shall be routed to obtain the required approvals from the Manager of Engineering, the Project Manager and the Manager of Procurement/Project Procurement Manager.
The technical evaluation of the quotations shall address the major items of the requisition such as:
- Name's of key people proposed, with resume
- Place where the work will be done
- Contractor's workload
- Rates, commercial conditions, overtime rates
- Engineering, design and drafting tools
- Cost for computer usage, printers etc. per unit
- Printing cost, travel cost and other reimbursable cost
- Change order procedure
- Indication of prices per manhour per category
- Delivery dates of the deliverables
- Manhours total and broken down per deliverable plus supervision, quality control etc.
- Deviations to any requirements stated in the requisition and/or "instructions and conditions applicable to orders covering engineering services" (Attachment I).
- Agreement to the context of the requisition and pertaining documents.
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Any exclusions or deviations to the stated requirements.
The selected bidder(s) shall be invited to attend a clarification meeting in the Company office. This meeting shall be attended by: the Manager of Engineering or his designate, Project and Procurement Managers.
Following points as minimum shall be discussed:
- Requisition as applicable to conditions of the project
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Explanation of "Instructions and conditions applicable to orders covering engineering services".
A minutes of meeting shall be prepared, preferably during the meeting, and signed of by the representatives of Project, Procurement and Manager of Engineering.
The contractor shall confirm his agreement by signing these minutes together with submitting where necessary, revisions to his quotation.
Copies of the minutes of meeting shall be distributed to selected contractor and internally to Project Manager, Manager of Engineering, Department Group Manager, Lead Specialist Engineer.
4.4 Purchase
The requisition and all pertaining documents shall be certified for purchase by the Lead Specialist Engineer and together with a "Re quest for Purchase", (BN-UP-3) sent to the Manager of Engineering for approval. The request for purchase, requisition and related documents shall then be passed to the Project Manager and subsequently to the Project Procurement Manager.
The purchase order shall include the documents listed on the Request for Purchase and additional information such as:
- Company's procedure to check and expedite the work done
- Communication and invoicing details
- The instructions and individual secrecy agreement, contained in Attachment I to this procedure, shall form part of the purchase order.
- Acceptance of the work, guarantees, liabilities.
- Individual secrecy agreement.
4.5 Execution
4.5.1 Coordination
The contractor shall be required to assign a competent Specialist Engineer representing the company, who shall take care of the necessary coordination between his staff and Company.
This assigned Specialist Engineer shall be dedicated to this pro cured services and shall be fully responsible for the quality and efficiency of the engineering services to be provided under the procured service. He shall be responsible for the agreed progress and processing of the deliverables as well as the internal quality control. He shall sign all deliverables prior to submission to Company.
4.5.2 Visits by Company to the Contractor
The Lead Specialist Engineer of Company shall pay regular visits to the contractor's office and confer with the assigned counterpart. Subjects of discussion shall include, progress, status, spent hours, availability of manpower, facilities etc.
A reporting memo shall be prepared by the Lead Specialist Engineer of each visit which, upon return to the Company office, shall be distributed to the Project Manager, Engineering Manager, Department Group Manager and Project Procurement Manager. These reports also serve as expediting reports.
4.5.3 Communication of Contractor with Company
The contractor assigned Lead Specialist Engineer shall be required to prepare and issue minutes of meetings of all meetings held. Action items by Company effecting scope/agreement of the contract shall be covered by amendments to the purchase order.
4.5.4 Revisions to Purchase Order
Scope changes shall be covered by revision of the purchase order through Company Lead Specialist, revised Request for Purchase, updated requisition and amendment to the original purchase order in accordance with Company standard procedure.
4.5.5 Company's Extent of Checking
The deliverables prepared by the contractor shall be distributed to the Lead Specialist Engineer to check the quality of the deliverables. Company's check on quality does not relieve the contractor of his responsibility to provide the deliverables complete, checked and approved by his staff all in accordance with the purchase order. This qualification shall be stated in the requisition.
4.6 Quality Plan
The Company Manager of Engineering, or his delegate, in close cooperation with Department Group Manager shall prepare a quality plan listing the extent and schedule for the quality control checks (project audits) to be carried out by the Department Group Manager or his assignee. These audits shall be recorded and findings/actions required discussed with the Lead Specialist Engineer and/or the contractor.
4.7 Final Acceptance
The Lead Specialist Engineer is responsible to verify and subsequently accept all deliverables. The final release/acceptance report shall be passed via Manager of Engineering and the Project Manager to the Project Procurement Manager for official acceptance and release of payment.
5. Flowchart
5.1 Initiation, Selection of Subcontracted Engineering Services
Execution of Subcontracted Engineering Services
6. References
Since the relevance of Company references largely depends on type/extent of the engineering services to be subcontracted, only general reference is made to the indexes of Company company procedures (level II/III), guides and standards plus engineering computer programs.
Applicable references shall be selected for each case.
6.1 DocumentNumber |
Title |
Level |
|
QAM-029 |
Index of Company Procedures |
2 |
|
QAM-030 |
Index of Department Procedures |
3 |
|
QAM-031 |
Index of Guides and Standards |
4 |
|
QAM-032 |
Index of Engineering Computer Programs |
7. Attachments
- Instructions and conditions applicable to orders covering engineering services.
Company
INSTRUCTIONS AND CONDITIONS APPLICABLE TO ORDERS
COVERING ENGINEERING SERVICES
The contractor providing the engineering services (the "work") under this order is hereinafter referred to as "contractor".
A.The contractor shall furnish the work in accordance with the documents referred to in this order. The work shall show first-class workmanship and shall be performed with the utmost diligence and efficiency.
B. THE CONTRACTOR AND ITS PERSONNEL
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The contractor shall employ such number of staff and personnel as will be necessary to carry out the work properly and in accordance with the mutually agreed schedule. Contractor shall submit at job start on request of Company, professional resumés of key personnel who contractor wants to assign to the job, for Company's approval. Key personnel assigned to the job may not be taken off or replaced, without Company's agreement. The contractor shall not in any way be relieved from its obligations under this order should the number of its staff and/or personnel be insufficient to perform the work in accordance with this order.
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Neither party hereto shall recruit or employ during the course of the work and a period of 1 (one) year as of the acceptance or termination thereof any employee of the other party without the prior written consent of the other party hereto.
- No subcontract shall be entered into by the contractor without the contractor having obtained the prior written consent of Company. The contractor shall be responsible for the work of its subcontractors, as if no subcontract has been made.
C. INSPECTION AND REJECTION
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Company shall have the right to inspect the work at any time during its performance and to reject any item of work which has not been performed in accordance with the provisions of this order. No such inspection or rejection shall relieve the contractor of any of its obligations and/or liabilities under this order.
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The contractor shall at its own expense remedy any item of work rejected by Company under the provisions of the foregoing paragraph.
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Company shall indicate and communicate to the contractor which drawings and/or other documents have to be approved by Company.
The contractor shall promptly after execution submit the required number of these drawings and/or other documents for approval by Company.
D. COMPLETION TIME - USE OF COMPLETED PORTIONS
The contractor shall complete any portion or portions of the work in such order of time as Company may require.
Company shall have the right to take possession of and use any completed or partially completed portions of the work, but such possession and/or use shall not be construed as an acceptance of (the portions of) the work so taken or used. Upon completion of the work, all documents made available by Company, submitted to contractor shall be returned to Company.
E. ACCEPTANCE
If the work is completed in the contractor's opinion, the contractor shall promptly inform Company thereof in writing. Company shall inspect the work and in the event of rejection of the work or part thereof by Company, the contractor shall immediately at its own expense take all action necessary to complete the work in accordance with this order so as to enable Company to give written acceptance.
F . PATENTS AND ROYALTIES
- The contractor agrees to and does hereby grant to Company, its parent and/or affiliated companies, and the owner and its subsidiaries and/or affiliated companies, under any patents now or hereafter owned or controlled by the contractor which are pertinent to the work, a royalty-free irrevocable license, together with the right to extend the same to vendors of materials and/or equipment.
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The contractor agreed to assign to Company, its parents and/or affiliated companies, the owner and its subsidiaries and/or affiliated companies, any invention or improvements made by the contractor or its personnel in or as a result of the performance of the work. The contractor shall take all necessary measures to secure that those of its personnel who will be engaged in the execution of the work, have agreed to make such assignments as referred to above.
- The contractor shall hold harmless and/or indemnify Company, its parent and/or affiliated companies from and against any and all losses, damages and/or expense arising from any claim or infringement or alleged infringement of a patent in existence or to be granted on an application published prior to the date of this order with respect to or arising out of the work, provided, however, that such claims do not arise out of any patent infringement based upon specific processes or items of equipment, which may be used in the plant at Company's specific request.
G. SECRECY
The contractor agrees to hold in confidence and not to disclose to any person for any reason at any time, and not to use for any purpose other than the work, any secret or confidential information or trade secrets disclosed to it by Company. The afore mentioned obligations shall not apply to information which:
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Is published or otherwise available to the public at the time of receipt thereof by the contractor from Company.
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Becomes published or otherwise available to the public after receipt thereof by the contractor from Company through no act or failure to act on the part of the contractor.
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Can be clearly demonstrated by the contractor to have been in the possession of the contractor at the time of receipt thereof by the contractor from Company.
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Is disclosed to the contractor by a third party after disclosure of information hereunder by Company, which was rightfully disclosed to the contractor by third party.
If required by Company, the contractor shall promptly take all necessary steps to arrange that certain categories of its personnel sign specific employees individual secrecy agreements, the text of which shall be submitted to the contractor by Company.
H. TITLE
Title to all plans, specifications, drawings and other technical documents prepared by the contractor under this order shall vest in Company. Company and its parent and affiliated companies and the owner, its subsidiaries and affiliated companies shall have the right to use these plans, specifications, drawings and other technical documents without any obligations of any kind to the contractor.
J. GUARANTEES
- Remedy any item of the work and/or
- Provide any additional item of work for the purpose of having the work completed in accordance with this order.
K. LIABILITY FOR THE WORK
The contractor shall up to an amount not exceeding the contract price, or if otherwise agreed, up to a percentage of the contract price as specified in this order, be responsible for the costs of repairing and/or replacing material and/or equipment, which are defective as a result of any errors by the contractor in the work. This provision shall not be interpreted to relieve the contractor from any other liability obligations as laid down in any applicable laws and regulations.
Company shall have the right to change the scope of the work, to modify specifications, drawings etc. or to demand alterations to work already completed, at any time during execution of the work.
Any resulting price changes shall be based on unit prices or daily or hourly rates, where these exist or negotiated on a lumpsum basis at Company's discretion. In the latter case contractor shall make available to Company a detailed cost breakdown of the proposed lumpsum.
Changes, modifications and alterations of any nature by contractors will not be permitted without the written consent of Company.
M. TEMPORARY SUSPENSION OF THE WORK, THROUGH NO FAULT OF THE CONTRACTOR
N. TERMINATION FOR DEFAULT
The contractor's failure or inability to supply engineering work of the proper quality, to furnish an adequate and sufficiently skilled staff, to rectify imperfections or faults in the work within a reasonable time limit as requested by written notice from Company or to comply with any of the other conditions contained in the purchase order and its attachments, shall be grounds for termination of the contract by Company. In the event of such termination, Company may, for the purpose of completing the work, take possession of all engineering documents applicable to the purchase order and may finish the work by whatever method it may deem expedient including assistance from another party or parties under such form of contract as Company may deem advisable.
Company will pay the contractor the costs of the work carried out up to the time of termination, less the unpaid commitments of the contractor to subcontractors in connection with the work, and less the extra costs and expenses incurred to Company through the termination of the contract.
The contractor will remain liable under the terms of the guarantee as set forth in Article "J" for the portion of the work executed and supplied up to the time of termination.
O. CANCELLATION OR TERMINATION THROUGH NO FAULT OF CONTRACTOR
P. INSTRUCTIONS AND CONDITIONS
The instructions and conditions printed on the reverse side of page 1 of the Company purchase order form are made a part of this order and apply to the contractor except for the paragraphs:
Patents, Expediting and Inspection, Guarantees, Errors in Materials Vendor Agents and Employees and Title.
"Vendor" used in these instructions and conditions shall mean "Contractor".
In case of conflict between the requisition for subcontracting engineering services and Company purchase order, the requisition shall govern.
INDIVIDUAL SECRECY DECLARATION
The undersigned hereby declared vis-à-vis Company (hereinafter called "Company")
b) That all secrets or confidential information imparted to him and all technical data acquired by him by virtue of his assignment to Company, relating to the processes, products, or to the design, construction or operation of equipment or apparatus in which Company may be interested, shall not be disclosed or used by him during or subsequent to his assignment for the benefit of any other person, firm or corporation, unless he shall first secure the prior written consent of Company to such disclosure or use, except as such information or data may appear in published sources available to the general public;
c)That all designs, data, records, drawings, models, notes and the like (including copies of the same) acquired by him during his assignment to Company, and relating in any way to the business of Company, are the property of Company and shall be delivered promptly to Company by him whenever required to do so by Company and in any event when his assignment terminates; and
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(Signature)
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(Date)