United Energy Pakistan Limited

CONTRACTOR ACCOUNTABILITY PROCEDURE

Document No. SCM-CSM-000-IN-PRO-00002-00

Document No. Rev. No. Issue Date

SCM-CSM-000-IN-PRO-00002 00 January 2018

Next Review Date

January 2021
Sponsored by: Endorsed by: Approved by:

Amjad Shaikh Saad Moin Mausuf Ahmad

(Sr. Manager HSE) (CSMS Lead) (VP Technical)
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

This document is a CONTROLLED DOCUMENT. Any change to this document must be reviewed and approved prior to
use and issue.  Any documents not approved in this manner will be Uncontrolled. When printed this document
is UNCONTROLLED
AGREED BY:

Sr. Name Department Signature Date

1. Ghulam Ali Operations

Management
2. Sadruddin H. Ali
Services

3. Adeel Kazi Security

4. Tariq Shaikh D&C

5. Zaheer Alam Exploration

6. Aleem Ansari Subsurface

7. Shabbir Jan PSCM

Document No.: Issue Date:

Page 2 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

DOCUMENT CONTROL
Revision Record

Sr. Rev. Rev. Page Section Description & Reason for amendment
No. No Date No. No.

DOCUMENT DISTRIBUTION LIST

1. ALL UEP TEAM LEADERS

Document No.: Issue Date:

Page 3 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

Table of Contents

1.0 INTRODUCTION 5
2.0 LINKAGE WITH OTHER PROCEDURES 5

3.0 RESPONSIBILITIES 5

4.0 STRATEGY 5

4.1 Stage Levels 6

4.2 Stage-1 6
4.3 Stage-2 6
4.4 Stage-3 7
4.5 Violations 8

5.0 EXCEPTIONS / WAVIERS 8

6.0 MONITORING AND RECORD KEEPING 8

7.0 LESSONS LEARNING 8

ANNEXURE

Annexure-A Job Award Stoppage Flowchart 9

Annexure-B Field Instruction Level-I 10
Annexure C: Field Instruction Level – II 11
Annexure D: Quality Alert 12
Annexure E: Non Conformance Form 13
Annexure F: Suspension Checklist 14
Annexure G: Warning Letter 15

Document No.: Issue Date:

Page 4 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

1.0 INTRODUCTION

This procedure provides a framework to manage non compliances by UEP

contractors. These can broadly be categorized as:

 HSE Violations
 Code of Conduct Compliance
 Work / Delivery Compliance

UEP will use instruments such as Field Instructions (FIs) and Quality Alerts (QAs)
to formally register non-compliances by its Contractors along with punitive policy
leading to an impression of in-dispensation on part of contractors.

This procedure will help UEP to address following aspects

 Contractor’s indifference towards Field Instructions and Quality Alerts

 Contractor’s lacking commitment to improve its Quality and HSE
standards
 Penalization system not in place against Non-compliance

2.0 LINKAGE WITH OTHER PROCEDURES

 UEP Code of Conduct

 UEP HSE Expectations & HSE Procedures
 Forged Documents Investigation process (HRD-L&D-000-IN-PRC-00001)

3.0 RESPONSIBILITIES

 President / TVP shall be the adjudicator of this procedure and its

implementation.
 Respective Head of Department (ES, D&C, Operations, Sub-surface,
PSCM, Exploration, Management Services and DCT) shall ensure
enforcement of this procedure in their respective areas.
 The HSE Manager shall be responsible for providing assurance to UEP
Leadership on correct implementation of this procedure.
 An SPA, appointed by respective HODs, shall be responsible for keeping
track accountability of their respective contractors and monitor
compliance.
 Every member of UEPL workforce is expected to observe and report any
unsafe event or condition or non-compliance to UEPL procedures and
standards at UEPL or contractor site. In either case, they have obligation
to STOP any unsafe work that is likely to cause any adverse health,
safety and environmental impact.

4.0 STRATEGY

Based on the above understanding, the following stage wise strategy will be
followed (also outlined in the Annexure 1).
Document No.: Issue Date:
Page 5 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

4.1 STAGE LEVELS

If any violation (HSE, Quality OR Deliverability) is observed first time at any of

UEP sites, concerned UEP site supervisor will capture and record through below
mentioned tools. Ideally, the contractor would respond taking immediate
corrective actions and continue with Job execution.
.
Levels Type Guidance on non-compliance
Level-1 Field Safety Minor observations i.e. poor quality of PPEs.
instruction violation (H level actual or potential noncompliance).
Level-2 Field Safety Major level violations of UEP Expectations /
instruction violation procedural deviations (G level actual or
potential noncompliance.
Quality Alert QA/QC Quality Alert will be issued on minor deviation
related to defined QITP’s (Quality Inspection/ Testing
Procedures).
Non- QA/QC Non-Conformance Report will be raised on
Conformance related major violation of Code or Established
Report Standard that are adapted by UEPL

4.2 STAGE-1

In case of repeated violations or recurrence of Level 1 and 2 observations within

a specific period ranging from three to six months, a 1st written warning will be
issued by PSCM to contractor especially when any one or more of the following
steps are taken and no positive results are achieved.

a. Three Field Instructions (Level-1) issued.

b. Two Field instructions (level-2) issued.
c. Two Quality Alerts issued.
d. One Non-Conformance Reports issued.

Contractor will be required to submit formal written explanation for these non-
compliances and assurance around measures to preclude recurrence in future.

4.3 STAGE-2

In case contractor does not take remedial action as required or if further

violations are observed even beyond the specific period irrespective of the
project, the job will be immediately suspended followed by a 2nd warning letter to
Contractor by PSCM. Additionally the contractor management will be summoned
and engaged by;

a. PSCM
b. MCAM / HOD / Contract Sponsor
c. C&EA (in case of a local contractor)

Document No.: Issue Date:

Page 6 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

Upon provision of written assurance to both PSCM & MCAM / Contract Sponsor,
and having taken the desired corrective measures the Contactor would be
allowed to resume the job.

4.4 STAGE-3

In case contractor does not take required remedial action, OR any further
violation is observed, actions related to stage-3 will come into place. Actions
include:

 Suspension of job
 Issuance of formal letter to contractor by PSCM
 Meeting of MCAM/HOD, PSCM and C&EA (for local contractors only) with
contractor management
 Joint decision for further course of actions

Relevant teams of MCAM / Contract Sponsor will provide necessary

documents/records to PSCM for formal contractual communication with the
contractor. PSCM will issue official letter to the contractor documenting reasons
for suspension and will schedule a meeting with contractor to provide contractor
an opportunity to explain its point of view. Finally the team consisting of
MCAM/HOD, PSCM and C&EA (for local contractors only) will decide the any
one or combination of below mentioned actions:

a. Time-bound suspension
b. Technical dis-qualification
c. Termination of the contract
d. Penalty, if supported by the contract

Detailed audit, sufficing the pre-qualification checklist, by a multi-disciplinary

team would thus be required for re-induction of the contractor.

Flow chart for Job-Award Stoppage is shown in the following page.

Note: In situations where a contractor who has multiple jobs (e.g. a construction
contractor who is involved in civil or mechanical jobs or a rig contractor who has
multiple rigs, decision to suspend all or limited work scope will be taken by the
committee comprising of MCAM/HOD, PSCM and C&EA based on the situation
of non-compliances.

Document No.: Issue Date:

Page 7 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

4.5 VIOLATIONS

4.5.1 CODE OF CONDUCT

In case violation is deemed breach of code of conduct, above staged process will
not apply and based on the investigation findings, relevant HOD and PSCM shall
jointly recommend appropriate action to the Technical VP/ President.

4.5.2 HSE

In case of major safety violations of UEP Expectations / procedural deviations (F

level actual or potential noncompliance), the staged process may not apply and
contractor may be subject to suspension or termination (as appropriate).

5.0 EXCEPTIONS / WAVIERS

The Technical VP and President can provide exception wavier to this procedure
considering business needs.

6.0 MONITORING AND RECORD KEEPING

Since UEP has a large number of contractors, controlled by various UEP end-
users and contract Sponsors, it is important that there is an on-line system to
document all violations so that appropriate decisions are taken. CSMS Team
Coordinator will have overall responsibility to create this online system and
ensure, CS and MCAMs and end-users populate data appropriately.

7.0 LESSONS LEARNING

UEP CS and MCAM will ensure LLDs prepared by the HSE / CSMS team are
appropriately shared with all contractors with a view that suspension or
termination of contractors is a complex process and embedding learning is a win-
win situation.

Document No.: Issue Date:

Page 8 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

Annexure A: Job Award Stoppage Flowchart

Violation observed
(HSE/Quality OR
Deliverability)

Quality Alert
FI Level-1 FI Level-2
raised (1)
raised raised
Stage Levels

Yes
Repeated Corrective
Job
violation Actions
Continuation
By
Contractor

No

FI-1s FI-2s QAs

(3 no) (2 no) (2 no) NCR (1 no)

Stage 1:

Yes Written 1st Written

Corrective
Assurance Warning from
Continue Job actions by
by PSCM
Contractor
Contractor

No
Stage 2:

Written
Meeting by Assurance /
PSCM / Corrective Yes Job
Job 2nd warning to
Recurring Suspension MCAM / CS Actions by Resumption
Violations Contractor (FM in case local Contractor
contractor)

No

Stage 3:

Job Way Forward Audit

Recurring Suspension & Meeting with Penalty / Suspension qualification for
Letter by / Job resumption/
violations refer to Head PSCM / MCAM /
PSCM
Office C&EA Termination /
Requalification
awards **

NOTE: * Head of Management Services Rep in case of Local Contractor

** After time bound suspension / termination

Document No.: Issue Date:

Page 9 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

Annexure B: Field Instruction Level - I

United Energy Pakistan Limited CRF #

Field Instruction (Level-I)

PO BPO # AFE
Contract # #

Project: To:

Release # Location Date:

Subject:-.
[CONTRACTOR NAME] has made following violations during execution of
[PROJECT/JOB] at [LOCATION]
1. .

2. .

3. .

4. .

Contractor Accountability
Effects of FI
(Please tick  Warning letter  Stage 0
appropriate)  Job Suspension  Stage 1
 Engagement Session  Stage 2

Contractor UEP FI Issuer Department Manager/TL

Document No.: Issue Date:

Page 10 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

Annexure C: Field Instruction Level - II

Document No.: Issue Date:

Page 11 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

Annexure D: Quality Alert

Order No:
Rev:
Quality Alert Form Page:
Date:

       Priority To be attended immediately

       Priority To be attended within 7 days
       Priority To be attended within 15 days

QA
Client: Contractor:
Number:
CRF/WO: Date: Time:

Reference
Spec: DWG:
Code:

Project:
Subject:
Description:
During Execution of [PROJECT/JOB], [CONTRACTOR NAME] deviated from [Code/Procedures]
through following violations.
1.     

2.    

Required Remedial Action:

Contractor Comments:

Effects of QA Contractor Accountability

Warning letter Stage 0

(Please tick
appropriate) Job Suspension Stage 1
Engagement Session Stage 2

Contractor QC Representative: Issued by(UEP):

Name & Signature: Name & Signature:

Date: Date:

Closed by(UEP):

Name & Signature: Date:

Document No.: Issue Date:

Page 12 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

Annexure E: Non Conformance Form

Order No:
Rev:
Non Conformance Form Page:
Date:

       Priority To be attended immediately

       Priority To be attended within 7 days
       Priority To be attended within 15 days

QA
Client: Contractor:
Number:
CRF/WO: Date: Time:

Reference
Spec: DWG:
Code:

Project:
Subject:
Description:
During Execution of [PROJECT/JOB], [CONTRACTOR NAME] deviated from [Code/Procedures]
through following violations.
1.     

2.    

Required Remedial Action:

Contractor Comments:

Effects of QA Contractor Accountability

Warning letter Stage 0

(Please tick
appropriate) Job Suspension Stage 1
Engagement Session Stage 2

Contractor QC Representative: Issued by(UEP):

Name & Signature: Name & Signature:

Date: Date:

Closed by(UEP):

Name & Signature: Date:

Document No.: Issue Date:

Page 13 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

Annexure F: Suspension Checklist

CHECKLIST FOR RECOMMENDING CONTRACT SUSPENSION / TERMINATION

Recommendation for Suspension / Termination of [Contract Name & Number] as per the
following criteria:

 Date of primary violation of Contractor’s Obligations (HSE and / or Technical)

_________________

 Three Field Instructions (Level-1) issued No Yes (attach copies)

 Two Field instructions (level-2) issued No Yes (attach copies)

 Two Quality Alerts issued No Yes (attach copies)

 Non-Conformance Reports issued No Yes (attach copies)

 Warning Letter Issued by CM No Yes (attach copy)

 Has the Contractor agreed to resolve all highlighted issues No Yes (attach
copy)

_________________________________________________________________
(Comments if any)

 Contractor has not fulfilled the agreed action steps and is recommended for Contract
Suspension / Termination No Yes

_________________________________________________________________
(Comments if any)

Proposed by: Line Manager HOD

Document No.: Issue Date:

Page 14 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018
 United Energy Pakistan Limited

Rev. No.
CONTRACTOR ACCOUNTABILITY PROCEDURE
00

Annexure G: Warning Letter

To: [CONTRACTOR NAME]

Subject: Warning Letter

Mr. [Owner Name]

Reference to the recent issues as highlighted to you repeatedly through Field

Instructions, Quality Alerts and Non-Conformance Reports under the Contract
[Contract / PO number and description], this letter is now being issued as a [1st Warning/
final warning].

You are requested to meet the undersigned at the earliest [location, date and time] and
provide a corrective plan with concrete timelines. Based upon agreement of your
proposal by our management, your progress will be strictly monitored. Any deviations will
be treated towards Contract Suspension or Termination.

PSCM

Document No.: Issue Date:

Page 15 of 15
SCM-CSM-000-IN-PRO-00002-00 January 2018