Epcc of Ngds of Pipeline Project Procedure: Procurement Plan

DOC. NO.
: CSB/GMDSB/NGDS/PRE-Q
COMMRICH SDN. BHD
GAS MALAYSIA DISTRIBUTION SDN BHD
DATE : 17-06-2020 REV. NO : 05
EPCC OF NGDS OF PIPELINE PROJECT

PROCEDURE
PROCUREMENT PLAN
CSB APPROVAL
REV NO. PREPARED DATE CHECKED BY DATE APPROVED BY STATUS DAT
GMDSB APPROVAL
REV NO. REVIEWED DATE APPROVED BY DATE STATUS DAT
GMDSB ENDORSEMENT:
PROCEDURE FOR PROCUREMENT PLAN
DOC No.: CSB/GMDSB/NGDS/PRE-Q
Date :17-06-2020
Rev.: 05
CONTENT
1.0 GENERAL
2.0 MATERIAL INSPECTION AND CONTROL
3.0 MATERIAL TRACEABILITY
4.0 MATERIAL TRACEABILITY REPORT
4.1 Shop fabrication inspection
4.2 Field fabrication inspection
4.3 Inspection and testing
4.4 Inspection, measuring and test equipment
4.5 Inspection and test status
5.0 FIELD FABRICATION INSPECTION
6.0 SUBCONTRACTORS AND VENDORS
7.0 DELAY IN ENGINEERING AND CONSTRUCTION STAGE
8.0 PLANNING ON ENCOUNTER DELAY
9.0 LOCAL CONTENTS
59-3, JALAN USJ 21/10, 47620 SUBANG JAYA, SELANGOR DARUL EHSAN
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1.0 GENERAL
Commrich Sdn Bhd prepares Procurement Control Procedure in accordance with

the client’s requirement. This procedure describes the responsibility for
procurement, selection of vendors / sub-contractors, quality control requirements
for purchase orders, a system for monitoring and checking during production
and documentation.
The following are the important provisions, which are incorporated in this
procedure:
a. Operations are responsible for vendor selection and preparation of

technical requirements which go with the purchase order and coordinates
with the client on procurement matters.
b. Procurement is responsible for finalizing all purchase orders and their

transmittal to vendors / sub-contractors. It is also responsible for follow-
up and expediting delivery.
c. The Quality Assurance department assists Operations and Procurement in

providing technical inputs as far as quality assurance requirements are
concerned. These includes test and inspection requirements for the
materials / equipment that are to be purchased.
d. Suppliers of major materials, equipment and services are selected from

the list of pre-qualified vendors / sub-contractors.
e. Other materials / equipment and services required are chosen from

reputable vendors with proven track record of performance and after a
thorough and comprehensive evaluation.
f. Operations is responsible for assigning Inspectors for materials/

equipment requiring source inspection requiring source inspection.
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2.0 MATERIAL INSPECTION AND CONTROL
This section provides the guidelines for receiving inspection and control of all
incoming materials for a project. This covers both clients as well as supplied
materials.
.1 General Requirements
The basis for receiving inspection is the Purchase Order together with the
accompanying Mill Certificates and Test Reports. These documents are
submitted by Project Manager to the Quality Control Section on or before
the arrival of the materials. QC Section files Mill Certificates and / or test
reports upon request.
.2 Receiving Inspection
.2.1 The Receiving Inspection is the function of the QC Materials

Inspector / s. The number of inspectors assigned to this function
depends on the size of the project.
.2.2 Incoming shipments are received, unloaded and checked against
shipping documents by the warehouse supervisor who, thereafter,
advises QC that the shipments are ready for inspections.
.2.3 Material Inspector / s verify that the results contained in the Mill
Certificates meet the minimum requirements of the specifications.
Materials whose Mill Certificates do not meet the specifications
are declared as non-conformities. The material inspector / s
examine the material for:
a. Proper identification i.e. grade, trademark, heat number, etc.
b. Dimension i.e. width, length, thickness, diameter, etc.
c. Surface defects such as pitting, scaling, cracks, etc.
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.2.4 Materials that pass the inspection are tagged green ‘ACCEPTED’
tag or sprayed with a green colour at the edge.
.2.5 Materials that do not confirm with the Purchase Order, Mill
Certificates and which show surfaces imperfections indicated in
Par. are classified as ‘Nonconformities’ and are labeled / stamped
with an orange coloured ‘HOLD’ tag or sticker. Nonconformities
are segregated from the batch / lot immediately upon their
detection and reported to the client’s inspector and the project
manager for appropriate action. Nonconformities may be disposed
in either of the following manner:
a. Use as it is.
b. Repair to meet the specification, then re-inspect
c. Reject
2.2.6 Nonconformities are reported immediately to the client’s

inspector and its disposition shall have his approval.
2.2.7 Materials that are rejected are tagged / stamped with a red
coloured ‘REJECTED’ tag or sticker and segregated from the
‘ACCEPTED’ and ‘HOLD’ materials.
2.2.8 The Materials Inspector /s accomplish a receiving Inspection

Report after such batch lot of materials inspections. A separate
Non-conformance Report is also prepared for all non-
conformities detected. The Project Manager is furnished with
copies of these reports for their information and appropriate
action.
2.2.9 The Materials Inspector /s accomplish a receiving Inspection

Report after such batch lot of materials inspections. A separate
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Non-conformance Report is also prepared for all non-

conformities detected. The Project Manager is furnished with
copies of these reports for their information and appropriate
action.
3.0 MATERIAL TRACEABILITY
3.1 Materials that are cut into two or more pieces are properly marked and
identified in a manner that allows for easy traceability to the original
Mill Certificate and heat number of the as-received piece. Materials
covered by this procedure include plates, pipes, tubes and structural
shapes. Transfers of identification markings are carried out
immediately after layout and before cutting the as received (crude
stock) into two or more parts in accordance with the procedure
established in the succeeding paragraphs.
.2 Marking on Cut Sections
.2.1 Sections that will be cut from crude stock are marked with their
corresponding shop marks using coloured crayons after layout and
before cutting.
.2.2 Extra section or cuttings whose dimensions are such that they may,
in the future, be used for fabrication are die-stamped with the
original identification of markings of the crude stock.
.2.3 The above operations are carried out under the close supervision of
the shop layout and cutting supervisor who, thereafter, fills in the
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corresponding materials identification on the space provided for in

the Crude Stock Cutting List.
.2.4 The QC Inspector inspects the markings before cutting and signs
the accomplished Crude Stock Cutting List to signify that the
transfer of the markings were done properly. He then marks the
crude material with ‘OK fir Cutting’.
4.0 MATERIALS TRACEABILITY RECORD
4.1 The Quality Control Inspector prepares and files materials trace ability
records which shows the shop marks with their corresponding
description, dimension, heat number and Mill Certificate Numbers.
4.2 These records are made available to the client’s inspector upon request.
The complete file of these records forms part of the QC job file after
completion of the project and are stored for a period of 5 years.
4.3 SHOP FABRICATION INSPECTION
This section cover examination/ inspection requirements and procedures

commencing at materials withdrawal from stock through cutting,
forming, fabrication, pressure testing and final inspection whichever
applicable for the particular structure or sub-assembly being fabricated.
Description of technical processes, i.e. welding, heat treatment, non-
destructive testing, painting, etc., are not described in details as they are
covered by separate sections.
.4 The shop QC Supervisor sees to it that all inspection are performed in

accordance with the requirements of the general fabrication specification,
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relevant codes and standards and other client’s specification for the
project.
.5 QC Inspectors submit QC Inspection Reports and copies are furnished to

all departments concerned.
5.0 FIELD FABRICATION INSPECTION
This section covers examination/inspection requirements and procedures

commencing at materials/equipment withdrawal from stock and sub-assemblies
and pipe spools from shop through cutting, erection, pressure testing and final
inspection whichever is applicable for the particular item. This includes
structural and piping fabrication/erection and electrical, instrumentation and
other equipment installation. Description of technical processes, i.e. welding,
heat treatment, non-destructive testing, painting, etc., are not described in details
as they are covered by separate sections.
The Field Inspection Supervisor sees to it that all inspections are performed in
accordance with the requirements of the general fabrication specifications,
relevant codes and standards and other client’s specification for the project.
6.0 SUBCONTRACTORS AND VENDORS
6.1 Purpose
To ensure the quality of procured products and services the Quality

Assurance department will evaluate the subcontractors from the
following issue:
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- Is the Quality Assurance logically built ?

- Does the purchase order documents include the specified
requirements on Quality Assurance and Quality Control and
inspection milestones ?
- Will the material and equipment be delivered in accordance with the
project procurement schedule ?
- Does the sub-contractor contain those clauses required by the
client ?
6.2 Scope
The Quality Assurance activities will include the following main

activities:
- Evaluation of vendors/subcontractors
- Contract review and coordination
- Documentation requirements
- Inspection as required
- Material receipt/storage
- Release
6.3 Responsibilities
The project manager or person appointed by him is responsible for all

aspects of subcontracted service materials, components and equipment,
including the quality of the products and the relevant documentation.
7.0 DELAY IN ENGINEERING AND CONSTRUCTION STAGE
7.1 Introduction
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Delay is a common
occurrence in the construction
industry, and it is not an
exception for the oil
and gas projects. Due to the
complexity of the oil and gas
projects with long construction
cycle,
huge financial commitments,
and countless risks, it can
greatly affect the completion of
the project
adversely. There is various
causes of delay that affect the
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completions of oil and gas

projects with
the common ones being
inadequate planning and
ineffective project management
and other
uncommon examples which
are specific to certain projects
depending on project needs
and
geopolitical aspects [1,2]
Delay is a common occurrence
in the construction industry, and
it is not an exception for the oil
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cycle,
the project
projects with
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and other
and
cycle,
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the project
projects with
and other
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and
cycle,
the project
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projects with
and other
and
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cycle,
the project
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projects with
and other
and
Delay is a common occurrence in the construction industry, and it is not
exception in gas pipeline projects. Due to complexity of pipeline gas
projects with long construction cycle, huge financial commitments, and
countless risks, it can greatly affect the completions of oil and gas projects
with the commons one being inadequate planning and ineffective project
management and other uncommon examples which are specific to certain
projects depending on project needs and geopolitical aspect.
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8.0 PLANNING TO ENCOUNTER DELAY
8.1 Minimize construction delays
Expert project managers know how to identify and address each type. A
construction delay happens when things don’t go according to plan, and
since construction is often sequential, that’s often unavoidable.
For example, site supervisor were planning to pour concrete in valve

chamber but it ends up raining. Now the project must be pushed back two
days and contractors must reschedule.
Delays can also happen when a subcontractor doesn’t show up on time,

when work takes longer than expected, or when material shipments are
delayed.
8.2 Improvise management methods
Incompetent management is another major reason for project failure.

Managers are responsible for creating a project plan that includes all the
required elements and delivering the completed project by the deadline.
A construction manager is there to assign roles and responsibilities within a

project and to coordinate labour and materials to the job site so work can get
done in a timely fashion. A great construction manager can juggle several
aspects of a detailed project plan while working to minimize delays and
aggressively remove blockers that can hold up progress.
8.2 Plan
A great project plan that can easily be updated as the project moves forward
offers a bird’s eye view of the project, enabling managers to quickly
diagnose potential challenges and solve problems before they become costly
delays.
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A successful plan also contains contingencies for unforeseen circumstances,

creating clear guidelines for how your firm should respond to delays.
Commrich Sdn Bhd will use software services like Microsoft project or a
number of other popular construction project management software
options to streamline your project planning.
8.3 Assign clear roles and responsibilities
Project manager must hold people accountable by establishing roles and

responsibilities that are clear to everyone involved. Establishing
accountability is part of an effective project plan and timeline—remember to
focus not just on what needs to be done, but who will be responsible for
doing it and by when.
Get buy-in from everyone before beginning to ensure adherence to the

project plan. Project manager can do this by getting all the key players in a
room in advance of the project to talk through the idea. Always solicit
feedback — if team members don’t feel like they have input, they simply
don’t buy into a project.
8.4 Schedule contractors far in advance
To avoid a disaster, determine what contractors Commrich Sdn Bhd

need far ahead of time and start obtaining quotes as soon as possible to
ensure that Commrich Sdn Bhd won’t face delays because basically not
easy to get contractors in quickly enough.
9.0 LOCAL CONTENTS
9.1 General procurement policies, principles, and objectives
9.1.1 Local procurement policies
Commrich Sdn Bhd Procurement Policies, in general,
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provide support for the full achievement of the

objectives and aspirations of the National Development
Policy and Vision 2020 i.e. towards a developed nation
status. The principal policies are as follows:-
1. To stimulate the growth of local industries through

the maximum utilisation of local materials and
resources;
2. To encourage and support the evolvement of

Bumiputera (indigenous) entrepreneurs in line
with the nation's aspirations to create Bumiputera
Commercial and Industrial Community;
3. To increase and enhance the capabilities of local

institutions and industries via transfer of
technology and expertise;
4. To stimulate and promote service oriented local industries

such as freight and insurance; and
5. To accelerate economic growth whereby

Commrich Sdn Bhd procurement is used as a tool
to achieve socio-economic and development
objectives.
9.2 Procurement objectives
Commrich Sdn Bhd’s procurement comprises the following objectives in general:
i. To ensure continuous supply of materials and services to

meet the Commrich Sdn Bhd needs from the best and
reliable sources;
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ii. To ensure efficient, effective and ethical procurement

practices to enable the Commrich Sdn Bhd to achieve
best value for money without compromising on quality,
delivery and other price and non-price factors;
iii. To stimulate and encourage the growth and development

of local industries through the optimal usage of local
resources and materials;
iv. To expand and invigorate the local industrial sector by

means of transfer of technology and expertise to suit the
nation's needs; and
v. To promote alternative and multiple sourcing through

supplier/vendor development according to the aspirations
and vision of the company.
Page 22 of 22

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DOC. NO.

DATE : 17-06-2020 REV. NO : 05

EPCC OF NGDS OF PIPELINE PROJECT

2.0 MATERIAL INSPECTION AND CONTROL

3.0 MATERIAL TRACEABILITY

4.0 MATERIAL TRACEABILITY REPORT

4.1 Shop fabrication inspection

4.2 Field fabrication inspection

4.3 Inspection and testing

4.4 Inspection, measuring and test equipment

4.5 Inspection and test status

5.0 FIELD FABRICATION INSPECTION

6.0 SUBCONTRACTORS AND VENDORS

7.0 DELAY IN ENGINEERING AND CONSTRUCTION STAGE

8.0 PLANNING ON ENCOUNTER DELAY

9.0 LOCAL CONTENTS

Commrich Sdn Bhd prepares Procurement Control Procedure in accordance with

a. Operations are responsible for vendor selection and preparation of

b. Procurement is responsible for finalizing all purchase orders and their

c. The Quality Assurance department assists Operations and Procurement in

d. Suppliers of major materials, equipment and services are selected from

e. Other materials / equipment and services required are chosen from

f. Operations is responsible for assigning Inspectors for materials/

2.0 MATERIAL INSPECTION AND CONTROL

.2.1 The Receiving Inspection is the function of the QC Materials

a. Proper identification i.e. grade, trademark, heat number, etc.

b. Dimension i.e. width, length, thickness, diameter, etc.

c. Surface defects such as pitting, scaling, cracks, etc.

b. Repair to meet the specification, then re-inspect

2.2.6 Nonconformities are reported immediately to the client’s

2.2.8 The Materials Inspector /s accomplish a receiving Inspection

2.2.9 The Materials Inspector /s accomplish a receiving Inspection

Non-conformance Report is also prepared for all non-

3.0 MATERIAL TRACEABILITY

.2 Marking on Cut Sections

corresponding materials identification on the space provided for in

4.0 MATERIALS TRACEABILITY RECORD

4.3 SHOP FABRICATION INSPECTION

This section cover examination/ inspection requirements and procedures

.4 The shop QC Supervisor sees to it that all inspection are performed in

.5 QC Inspectors submit QC Inspection Reports and copies are furnished to

5.0 FIELD FABRICATION INSPECTION

This section covers examination/inspection requirements and procedures

6.0 SUBCONTRACTORS AND VENDORS

To ensure the quality of procured products and services the Quality

- Is the Quality Assurance logically built ?

The Quality Assurance activities will include the following main

The project manager or person appointed by him is responsible for all

7.0 DELAY IN ENGINEERING AND CONSTRUCTION STAGE

completions of oil and gas

and gas projects. Due to the

ineffective project management

huge financial commitments,

depending on project needs

adversely. There is various

Delay is a common occurrence

completions of oil and gas

8.0 PLANNING TO ENCOUNTER DELAY

8.1 Minimize construction delays

For example, site supervisor were planning to pour concrete in valve

Delays can also happen when a subcontractor doesn’t show up on time,

8.2 Improvise management methods

Incompetent management is another major reason for project failure.