saep-381

Previous Issue: 28 January 2012 Next Planned Update: 28 January 2017

Revised paragraphs are indicated in the right margin Page 1 of 17

Primary contact: Kakpovbia, Anthony Eyankwiere on +966-3-8801772

CopyrightSaudi Aramco 2013. All rights reserved.

Engineering Procedure SAEP-381 17 March 2013

Project Quality Issues Escalation Process

Document Responsibility: Inspection Engineering Standards Committee

Saudi Aramco DeskTop Standards Table of Contents 1 Scope... 2

2 Purpose 2

3 Conflicts and Deviations 2

4 Applicable Documents.. 3

5 Definitions 3

6 Violations Definitions. 4

7 Instructions.. 5

8 Responsibilities.. 8

9 Cancelled Quality Notifications.. 10

Appendix A - Quality Issues Reporting Process 11

Appendix B - Contractors Internal NCR. 12

Appendix C - Quality Issues Escalation Matrix.. 13

Appendix D - Examples of Violations and Escalation Steps... 14

Appendix E - Responsibilities for Quality Issue Notification... 16

Appendix F - Index.... 17

Document Responsibility: Inspection Engineering Standards Committee SAEP-381

Issue Date: 17 March 2013

Next Planned Update: 28 January 2017 Project Quality Issues Escalation Process

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1 Scope

1.1 This Procedure establishes instructions for escalation of unresolved quality issues

in Saudi Aramco projects including delinquent quality concern notifications.

1.2 This SAEP does not apply to:

Escalation of non-conformities identified by Operation Inspection Division

(OID) during assessments of Operation Inspection Units (OIUs) in operating

facilities.

Deficiencies noted during internal assessments by the Inspection Department.

Deficiencies noted during Health Checks conducted by APMID for Asset

Performance Management (APM).

2 Purpose

2.1 The purpose of this SAEP is to:

2.1.1 Implement a consistent method for escalating quality issues including

Logbook Entries (LBEs), Non-Conformance Reports (NCRs),

Worksheets (WSs) and Delinquent Worksheets (DWSs), as defined in

Appendix A, Quality Issues Reporting Process.

2.1.2 Clearly define the corporate process for project quality issue escalation

including its documentation, requirements and definition of violation

categories, systems and procedures.

2.1.3 Ensure roles and responsibilities for project quality issue escalation are

well defined and auditable.

2.2 The intent of quality issue notification is to report and record quality or technical

deficiencies, determine the root cause of the problem, record the actions taken to

correct non-conformities, avoid recurrence and enhance overall project quality.

3 Conflicts and Deviations

3.1 Any conflict between this procedure and other applicable Mandatory Saudi

Aramco Engineering Requirement (MSAER) shall be resolved in writing

through the Chairman, Inspection Engineering Standards Committee (IESC).

3.2 Direct all requests to deviate from this procedure in writing to the Manager,

Inspection Department of Saudi Aramco, Dhahran.




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4 Applicable Documents

The applicable requirements in the latest edition of the following Saudi Aramco

Engineering Procedures, Schedule Q and General Instructions (GIs) shall be considered an integral part of this procedure.

Saudi Aramco Engineering Procedures

SAEP-301 Instruction for Establishing and Maintaining Saudi

Aramco Engineering Requirements

SAEP-302 Instructions for Obtaining a Waiver of a Mandatory Saudi

Aramco Engineering Requirement

SAEP-379 Quality Issues Notification

SAEP-380 Equipment Deficiency Report

SAEP-1150 Inspection Coverage on Projects

SAEP-1151 Inspection Requirements for Contractor Procured

Materials and Equipment

Contract Schedule Q Quality Requirements

Saudi Aramco General Instruction

GI-0400.001 Quality Management Roles and Responsibilities

GI-0002.710 Mechanical Completion and Performance Acceptance of

Facilities

5 Definitions

ACD: Agreed Completion Date

APM: Asset Performance Management

APMID: Asset Performance Management Integration Division

DWS: DELINQUENT WORKSHEET - Mechanism to escalate unresolved Worksheets

CQP: Contractor Quality Personnel

CQR: Contractor Quality Representative

INCR: Internal Non Conformance Report (Issued by Contractor)

LBE: Logbook Entries (First level of reporting quality deficiency using Manual

Logbook or the Quality Management Information System, QMIS)




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MCC: Mechanical Completion Certificate

MPCS: Mechanical Performance and Close-out System

MSAER: Mandatory Saudi Aramco Engineering Requirements

Non-Conformities Escalation: A structured mechanism to progressively escalate

pending quality and technical deficiencies to the concerned management.

NCR: Non Conformance Report (Issued by Saudi Aramco through SAP QM).

Project Quality Manager (PQM): The Senior Inspection Representative responsible

for coordinating all inspection requirements on behalf of Inspection Department with

SAPMT throughout all project phases, from Project Proposal up to Mechanical

completion.

QMIS: Quality Management Information System (also known as electronic Inspection

Logbook).

Repeat Violation: A non-compliance of the same MSAER, project specifications or

standard drawings in the same activity area, that occurred more than once within

six (6) months.

SAPMT: Saudi Aramco Project Management Team

SAP QM: Systems, Applications and Products in Data Processing-Quality Module

Technical Deficiencies: Non-compliance to any MSAER or project specifications

Worksheet: Mechanism for reporting major violations or escalating pending valid

NCRs as stipulated in this Procedure.

6 Violations Definitions

MAJOR (If any one of the following applies)

1) Violations of company standards including GIs that put the quality and integrity of

the facility including its workers and equipment at risk.

2) Actions that violate the Corporate values by submitting forged items & counterfeit

materials.

MODERATE (If any one of the following applies)

1) Any violation to MSAER, project specifications and approved IFC drawings that if

the next phase of work (critical path) is continued without correcting the violation,




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the structural integrity of the next phase will be jeopardized. Such violation if not

corrected in a timely manner will lead to more severe damage or complexity.

2) Any violation to Schedule Q.

Commentary Note:

Minor violations related to Schedule Q listed in Appendix D are excluded from this definition.

3) If the violation will be categorized YES item as defined in GI-0002.710 during the partial MCC stage.

MINOR (If any one of the following applies)

1) Any violation to SAES, SAMSS, project specifications and approved IFC drawings

but the next phase of work is not dependent on the correction of the violation.

2) If the violation will be categorized as NO item as defined in GI-0002.710 during the partial MCC stage.

7 Instructions

7.1 Quality Issues Notification

7.1.1 Quality or technical deficiencies shall be reported in a timely manner

through QMIS for LBE, or SAP QM (NCR or WS) depending on the

identified violation as defined in Section 6.

7.1.2 Potential non-conforming materials, products or work shall be pro-

actively highlighted through the QMIS to avoid re-work.

7.1.3 A letter of concern signed by the PID Superintendent shall be addressed

to the Department Head of the MCC/PMCC Chairman whenever

MCC/PMCCs are approved in the MPCS without ID signature due to

converted and unresolved YES items for other Organizations. This letter shall be copied to ID and PMT Department Managers.

7.1.4 A letter of concern signed by the ID Manager shall also be addressed to

the Manager of the MCC/PMCC Chairman whenever MCC/PMCCs are

approved in the MPCS system and IDs YES items are converted to NO without obtaining IDs agreement. This letter shall be copied to Proponent VP, ES VP and PM VP.

7.1.5 A letter of concern signed by the ES Chief Engineer shall be addressed

to the Admin Area head of the MCC/PMCC Chairman whenever a

Facility is commissioned without Inspection Departments




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review/signature on the MCC/PMCC. This letter shall be copied to

Internal Auditing, ES VP and PM VP.

7.1.6 Starting a project which excludes ANY Mandatory Saudi Aramco

Engineering Requirement (MSAER), without securing the required

waiver approved by applicable management level authority shall be

issued a Worksheet.

7.1.7 Initiators, approvers and other interested parties of quality issue

notifications shall be in accordance with Appendix E, Table of Responsibilities for Quality Issue Notification.

7.1.8 Third Delinquent Worksheet (DWS3) shall be copied to Internal

Auditing for their follow-up action.

7.2 Agreed Completion Date (ACD) for LBEs, NCRs and Worksheets

7.2.1 PID PQM, SAPMT Senior Project Engineer or Lead Project Engineer and

the Contractor Quality Representative are responsible for determining the

initial Agreed Completion Date (ACD) for LBEs, NCRs and Worksheets.

7.2.2 When no agreement on the ACD of any type/category of Quality

Notification could be reached, the ACD shall be decided mutually by the

next level of authority from ID and PMT, depending on the Quality

Notification category.

7.2.3 If an extension of ACD is justified and mutually agreed by ID & PMT

representatives, one-time basis approval of ACD extension is allowed.

If no agreement of the new ACD is reached by the ID and PMT initiators

and approvers, the ACD shall be established by the next higher signature

level(s) per the below matrix.

Quality Notification Type ID Rep PMT Rep

Contractors Internal NCR ID Field Supvr PMT Project Engineer

Logbook Entry (LBE) ID Field Supvr PMT Project Engineer

NCR ID Unit Supervisor PMT Sr. Project

Engineer

Worksheet ID PQM PMT Project Manager

In case a conflict on establishing the ACD continues, the PMT Department

Manager shall make the final decision.




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7.3 Handling of Contractors Internal NCR

7.3.1 Saudi Aramco strongly encourages all Contractors to take advantage of

all opportunities to enhance their quality management system

implementation and to fully utilize their internal QA/QC system towards

a high project quality delivery.

7.3.2 ID shall initiate escalation if a Contractor does not act to correct

quality/technical non compliances within the mutually agreed ACD.

7.3.3 To encourage Contractors QC Team to implement their internal quality management system effectively, the Contractors recommended completion date shall be accepted, unless found unreasonable by PMT

project engineer and the ID Field Supervisor.

7.3.4 When the Contractors QC personnel report and document a quality non-compliance, ID shall follow the work process per Appendix B,

Contractors Internal NCR.

7.3.5 When an Internal NCR has been issued by the Contractors QC, Saudi Aramco quality notification shall be recorded by PID in the General Comments category of the QMIS, for the purpose of Lessons Learned collection. The QMIS entry shall be closed when the internal NCR is

completed or when escalated to SA NCR due to non-compliance within

the ACD.

7.4 Clarifications to Appendix D Examples of Violations and Escalation Steps

7.4.1 Clearance of Unavailability of approved Contractor QA Manager or Contractor QC Manager" in Appendix D shall be based on actual

mobilization at the project site of the approved Contractor QA Manager

or QC Manager and not just submission or approval of resumes. Absence of an already approved and mobilized Contractor QA/QC

Manager, due to verified emergency leave could be exempted by the

PQM provided that the leave of absence shall not be more than seven (7)

calendar days without an approved replacement.

7.4.2 Clearance of Insufficient QC Manpower (Deficiency > 10% of Plan) in Appendix D shall also be based on actual mobilization of the approved

Contractor QC personnel at the project site, and not just submission or

approval of resumes.

7.5 Non-Conformities Escalation Process

7.5.1 Escalation processes shall be in accordance with Appendix C, Quality Issues Escalation Matrix.




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7.5.2 Logbook Entries (LBEs) shall be made for deficiencies defined as

Minor.

LBEs shall be made through the QMIS or Manual logbook. (Manual

logbook entry shall be done only in exceptional cases and shall have

prior approval by the relevant Division Head.

7.5.3 Repeat of Moderate or Major violation within six (6) months will result

to a Quality Notification starting at the next higher level of Violation

Category and Notification. Repeat of a Minor violation due to

negligence shall be considered as Moderate violation.

7.5.4 Repeated Internal Non-Conformance Report (INCR) within six (6)

months shall be, as in Appendix B, Contractors Internal NCR:

7.5.4.1 Escalated to SA NCR if the Contractor failed to Report the

Repeated INCR

7.5.4.2 Escalated to Violation-after-the-fact Entry in the QMIS if the

contractor has detected and reported the Repeated INCR

7.5.5 Valid NCR shall be escalated to a Worksheet (WS) when any of the

following applies:

7.5.5.1 Valid NCR is not corrected or completed on the ACD

(including the extension period, if extension is approved)

7.5.5.2 Valid NCR issued by Inspection Department is not approved

by SAPMT within five (5) working days

7.5.6 A Worksheet that was not resolved on or before the ACD, including the

approved extension period (if extension is approved), shall be escalated

to Delinquent Worksheet, after discussing and notifying the relevant

PMT representative.

7.5.7 Once the project reaches its MCC stage, all open LBEs, NCRs,

Worksheets and DWS shall be transferred to MPCS. Items required for

start-up or impacting safety are to be marked as YES Items. All other items shall be designated as No Items.

8 Responsibilities

8.1 Project Inspection Division Head

8.1.1 Reviews and approves or rejects PMT request to extend ACD for

Worksheets




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8.1.2 Approves Worksheets issued by the PQM/Sr. Supervisor

8.1.3 Initiates issuance of Delinquent Worksheet (DWS1)

8.1.4 Reviews and approves or rejects the deletion of SAP notifications

8.2 Project Quality Manager (PQM) or Senior Supervisor

8.2.1 PQM may initiate issuance of Non-Conformance Reports (NCRs) in lieu

of Field Supervisor

8.2.2 Initiates issuance of Worksheet (WS)

8.2.3 Reviews and may grant one-time approval of ACD extension prior to

escalation of valid NCR

8.2.4 Decides cases of violations not clearly defined in Section 6 and not listed

in Appendix D Examples of Violations and Escalation Steps

8.2.5 Performs quality roles and responsibilities defined in this SAEP,

GI-0400.001 Quality Management Roles and Responsibilities and GI-0002.710 Mechanical Completion and Performance Acceptance of Facilities

8.3 Project Inspector or Field Supervisor

8.3.1 Highlights to SAPMT any potential non-conforming material, product or

work through the QMIS to avoid re-work.

8.3.2 Reports in a timely manner any quality or technical deficiency through

the QMIS or SAP QM (LBE or NCR) depending on the committed

violations as defined in Section 6 and categorized in Appendix C,

Quality Issues Escalation Matrix

8.3.3 Field Supervisor may initiate issuance of Non-Conformance Reports

(NCRs) in lieu of Project Quality Manager (PQM)

8.4 SAPMT

8.4.1 Ensures project full compliance with SAEP-302, Instructions for Obtaining a Waiver of a Mandatory Saudi Aramco Engineering

Requirement

8.4.2 Approves valid NCRs initiated by Inspection Department within five (5)

working days




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8.4.3 Performs quality roles and responsibilities defined in this SAEP,

GI-0400.001 Quality Management Roles and Responsibilities and GI-0002.710 Mechanical Completion and Performance Acceptance of Facilities

9 Cancelled Quality Notifications

Submitted quality notifications in SAP QM shall not be marked for deletion without

proper justification approved by PID Division Head. The approved justification shall

be attached in the quality notification being marked for deletion.

Revision Summary

28 January 2012 New Saudi Aramco Engineering Procedure. 17 March 2013 Minor revision to provide clarification on selected sections.




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Appendix A - Quality Issues Reporting Process




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Appendix B Contractors Internal NCR

Contractors INCR

PID to Initially record

INCR in the General

Comments of QMIS,

marked as For Info

Moderate

Or

Major

Violation?

Repeat INCR?

w/in 6 Months

Yes

Repeat Minor

INCR?

w/in 6 months

No

Yes

No

Escalate INCR into

SA-NCR, then

Close INCR & QMIS

Yes

Follow the

Quality Issue

Reporting

Process

Close INCR & QMIS

Change QMIS entry

to Violation-after-the fact

Completed on

ACD?

No

Yes

Completed

on Extension

Date?

Yes

One-time

extension

granted?

No

No

No

One-time

extension

granted?

No

Completed on

Extension date?

Completed on

ACD?

No

Yes

Yes

Yes

Yes

No

Reported by

Contractor?

Yes

No




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Appendix C - Quality Issues Escalation Matrix

Violation

Type

1st

Notification

ESCALATION STAGES

1 2 3 4 5

Minor LBE NCR WS DWS1 DWS2 DWS3

Moderate NCR WS DWS1 DWS2 DWS3 -

Major WS DWS1 DWS2 DWS3 - -




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Appendix D - Examples of Violations and Escalation Steps

ESCALATION MATRIX

Recommended Phase for Proactive Notification

Violation Category S/N Sample Violation

1. Forged Quality Documents Job X/Kick-off/Weekly QC Meetings

Major

2.

Procurement and/or Installation of counterfeit materials classified as inspectable per SAEP-1151

Note: For non-inspectable materials, PQM decides on the initial Violation Category

Job X/Kick-off/Weekly QC Meetings

Major

3.

Starting a project which excludes ANY Mandatory Saudi Aramco Engineering Requirement (MSAER), without securing the required waiver approved by applicable management level authority.

Job X/Kick-off Meetings Major

4. Unavailability of approved Contractor QA Manager or Contractor QC Manager

Job X/Kick-off Meetings/ Weekly QC Meetings

Moderate

5. Commencing of Special Process activity as specified in Schedule Q without approved procedures/personnel

Job X/Kick-off/Weekly QC Meetings

Moderate

6. Concrete or Asphalt placement without pre-approval of the batching plant or mix design

Kick off Meetings/Weekly QC meetings Moderate

7. Use of non-approved third party service providers Kick off Meetings/Weekly QC meetings Moderate

8.

Starting work without IFC Drawings or not submitting required Quality Documents as per Schedule Q

Note: Categorization is PQM discretion

Kick off Meetings/Weekly QC meetings

Moderate

Minor

9. Placing RVL/Inspectable materials and equipment with unapproved source


Moderate

10. Carrying out modification work on accepted systems (PROCESS-RELATED) without SA approval


Moderate

11.

Preservation and Storage of equipment and materials classified as Inspectable per SAEP-1151 that are not in accordance with the approved quality plan and schedule Q

Note: Categorization is PQM Discretion


Moderate

Minor

12. Contractors Internal NCR not resolved at the approved completion date

Kick off Meetings / Weekly QC meetings

Moderate

13.

Failure of the Contractor to control and implement the quality requirements of its batch plants, subcontractors and other service providers as required per Schedule Q. (e.g., Not assigning his own QC inspectors at the manufacturer and service provider locations per Schedule Q, and relying only on the In-House QC)


Moderate

14. Contractor failure to conduct complete quality system audits per Schedule Q requirements


Moderate




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ESCALATION MATRIX

Recommended Phase for Proactive Notification

Violation Category S/N Sample Violation

15.

Contractor failure to conduct the 6-months Management Review Meetings and submit the results/recommendations to Saudi Aramco at the prescribed time


Moderate

16. Insufficient QC Manpower (Deficiency > 10% of Plan)

Job X / Kick-off Meetings/ Weekly QC Meetings

Moderate

17.

Contractor failure to perform/implement inspection per approved ITP without adequate notification or justification (HOLD POINT activities)


Moderate

18.

Contractor failure to perform/implement inspection per approved ITP without adequate notification or justification (Witness Point activities)


Minor

19.

QC Personnel on part time basis, either routinely performing non-QC functions or covering QC jobs in a different geographical location without prior approval of the ID Area Field Supervisor

Job X / Kick-off / Weekly QC Meetings

Minor

20. Insufficient QC Manpower (Deficiency < 10% of Plan) Job X / Kick-off Meetings Minor

21.

Failure to submit, incomplete, poor quality or late submittal of the required weekly or monthly deliverables as required by Schedule Q


Minor

22.

Poor or incomplete quality submittals or documentations

Note: PQM has the option to increase this category as

MAJOR if the submittals are for critical activities such as hydro test package of oil & gas facilities


Minor

23.

Poor, late or incomplete submission of the required weekly or monthly deliverables/documentations as required by Schedule Q

Note: PQM has the option to increase this category as MAJOR if the submittals are for critical activities such as hydro test package of oil & gas facilities


Minor

24.

Failure to submit the required weekly or monthly deliverables/documentations as required by Schedule Q

Note: PQM has the option to increase this category as MAJOR if the submittals are for critical activities such as hydro test package of oil & gas facilities


Minor

Legend:

L = e-Log Book entry

N = Non-Conformance Report (Q8 Notification)

W = Worksheet (Q9 Notification)




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Appendix E - Table of Responsibilities for Quality Issue Notification

Responsible Initiator / Issuer Approver Recipient /

Addressed To Interested/Copied Parties

NCR Field Supervisor/ PQM

Project Engineer / Sr. Project Engineer

PM Representative

Division Head, PID

Division Head, PM

Project Manager

Proponent Site Rep.

Worksheet PQM/ID Sr. Supervisor

Division Head, PID Department Manager, PM

General Manager, PM

Sr. Project Engineer

Department Manager, ID

Division Head, PM

Proponent Site Rep.

DWS1 PID Division Head

Department Manager, ID

General Manager, PM

Vice President, PM

Vice President, ES

Chief Engineer

Project Manager

Dept. Managers, PMT & Proponent

DWS2 ID Manager Chief Engineer Vice President, PM

Vice President, ES

General Manager, PM

General Auditor


PID Division Head

DWS3 Chief Engineer Vice President, ES Sr. Vice President, E&PM

Vice President, PM

General Manager, PMT

General Auditor

Project Manager

ID Manager





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Appendix F - Index

1 Scope.. 2

2 Purpose.. 2

3 Conflicts and Deviations.. 2

4 Applicable Documents.. 3

5 Definitions... 3

6 Violations Definitions 4

7 Instructions. 5

8 Responsibilities. 8

9 Cancelled Quality Notifications. 10

Appendix A Quality Issues Reporting Process... 11

Appendix B Contractors Internal NCR 12

Appendix C Quality Issues Escalation Matrix. 13

Appendix D Examples of Violations and Escalation Steps... 14

Appendix E Responsibilities For Quality Issue Notification... 16

Appendix F Index 17

saep-381

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