Bechtel Limited

COMPANY QUALITY SYSTEM PROCEDURES

PROCEDURE NUMBER QAP-214

CORRECTIVE AND PREVENTIVE ACTION

4 Jan 97 Amended to comply with new JJL DB KQ

Company Procedures
3 Nov 94 To comply with ISO9001:1994 DB PKG CGM
2 Oct 92 BS5750 Part 1 changed to ISO 9001 DB TEO ML
1 Sept 89 Company Implementation ABH DB KT
0 May 89 Interdepartmental Review DB RK
REV DATE REVISION BY CHKD APPR

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Procedure Number QAP-214 Rev 4
THIS IS A CONTROLLED COPY. IF PRINTED, THE HARD COPY WILL BECOME NON-CONTROLLED
Bechtel Limited
Company Quality System Procedure No: QAP-214

CONTENTS

1. PURPOSE....................................................................................................................
2. SCOPE.........................................................................................................................
3. REFERENCES.............................................................................................................
4. DEFINITIONS.............................................................................................................
5. RESPONSIBILITIES...................................................................................................
6. INSTRUCTIONS.........................................................................................................

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Procedure Number QAP-214 Rev 4
Bechtel Limited
Company Quality System Procedure No: QAP-214

1 PURPOSE

The purpose of this Procedure is to establish systems for implementation of corrective or

preventive action to eliminate or reduce the recurrence of product non-conformities (see
QAP-213) detected during audits, inspections or by other means.

2 SCOPE

This Procedure applies to the Engineering, Procurement and Construction Departments

on projects.

This Procedure addresses the requirements of ISO9001:1994 Section 4.14 as defined in

the Company Quality Assurance Manual QAP-101 Section 8.14.

3 REFERENCES

National and International Standards

ISO9001 : 1994 Quality systems -

Model for Quality Assurance in Design/Development, Production, Installation

and Servicing

Management Documents

QAP-101 Quality Manual

Quality System Procedures

QAP-213 Control of Nonconforming Product

QAP-216 Control of Quality Records
QAP-221 Handling Client Complaints

Standard Project Procedures

GPP 7EG 617 Control of Non-Conformances

GPP 7EG 621 Contract/Subcontract Management

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Procedure Number QAP-214 Rev 4
Bechtel Limited
Company Quality System Procedure No: QAP-214

4 DEFINITIONS

Company - Bechtel Limited and the EAMS Execution Unit

5 RESPONSIBILITIES

Department Managers are responsible for ensuring that personnel working under their
control are aware of and apply the requirements of this Procedure and resulting
work instructions.

Project Engineering Managers, Project Procurement Managers and Project

Construction Managers are responsible for ensuring that the requirements of this
Procedure are implemented on projects.

Detailed responsibilities for the various departments involved are given in Section 6.0.

6 INSTRUCTIONS

General

Evaluation of Importance

Once a product nonconformity or the potential for nonconformity has been

identified, its importance shall be evaluated in terms of its effect upon the
following:

a. Cost, schedule and Client satisfaction in the completion of a project.

b. The immediate and long term performance, reliability and safety of a

plant.

c. Any other item of importance in the production of a quality service to

Clients.

Analysis of the Problem

The problem shall be analysed to determine its root cause or causes, and
consideration shall be given to the following lines of enquiry:

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Procedure Number QAP-214 Rev 4
Bechtel Limited
Company Quality System Procedure No: QAP-214

a. Obtaining from the personnel involved in the work process or

operation, at all levels, their opinion of what has been the cause of
the problem.

b. Checking with other Bechtel personnel and companies to establish if

similar problems have occurred in their operations.

c. Checking within the involved profession to establish if similar

problems have occurred elsewhere.

d. Making a statistical analysis of the frequency of occurrence if the

problem has repeatedly appeared in the past.

e. Checking audit reports, historical reports and data from past projects
including Client complaints to establish whether the problem has
occurred before, or whether the problem is associated with particular
suppliers or subcontractors.

Decision on Corrective or Preventive Action

After the evaluation of importance and analysis of the problem, a decision

shall be made, and documented, as to the corrective or preventive action to
be taken. This shall take into account the likelihood of recurrence and
shall normally involve one or more of the following, depending on the
particular problem:

a. Revision of existing Procedures or the writing of a new one.

b. Training of in-house personnel to prevent recurrence.

c. Intensification of, or variation in quality control practices.

d. Notifying other Bechtel Group companies so that they may avoid the
problem.

e. Change of supplier or subcontractor.

f. In the case of significant problems having a wide effect within the

industry, publishing in technical journals or lecturing to learned
professional bodies on the problem and solution, so that others may
benefit from the experience

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Procedure Number QAP-214 Rev 4
Bechtel Limited
Company Quality System Procedure No: QAP-214

Where there is a likelihood of recurrence of the non-conformance, the

corrective or preventive action applied shall be followed up, to ensure
effective implementation.

Records of Corrective and Preventive Action

Records shall be maintained of corrective and preventive action decisions

and approvals, and of the results obtained. These records shall form part of
the quality records for the project in accordance with QAP-216.

Project Management

Where necessary, Project Management shall exercise a co-ordinating role with

Engineering, Procurement and Construction and the Client in the actions to be
applied to actual and potential non-conformities.

Where there is a dispute with a supplier or subcontractor over a nonconformity,

Project Management shall, in liaison with Procurement and/or Construction,
determine the appropriate action.

Where the Client advises Company of non-conformities, then in accordance with

QAP-221, Project Management shall review the relevant data and take the
necessary corrective action through the applicable Project Functional Manager.

Project Management shall approve specification waivers, where required by the

project Procedure, prior to any submission for Client approval.

Engineering

Engineering shall review requests for concessions and specification waivers from
Construction and from suppliers and subcontractors, for technical acceptability.
Such requests shall be individually evaluated and disposition advised and an
analysis made if a significant number arise from one cause. (Corrective action
may in this case involve either changing a design, specification requirement and
specified work method, or confirming the need for compliance with the original
requirements.)

Engineering review of requests for concessions and specification waivers shall be

in accordance with this applicable project Procedure and shall be in liaison with
Project Management, Procurement and/or Construction.

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Procedure Number QAP-214 Rev 4
Bechtel Limited
Company Quality System Procedure No: QAP-214

Procurement

Non-conformities not previously identified at suppliers by the supplier's quality

system and disclosed by Procurement Supplier Quality Representative shall be
documented, analysed, corrected and followed up.

Where there is a dispute with a supplier or subcontractor over a nonconformity,

Procurement shall liaise with Project Management to resolve the matter as
identified in Section 6.2 above.

Procurement shall input into project weekly and monthly reports information
concerning significant non-conformities at suppliers and subcontractors.

Requests from suppliers or subcontractors for concessions and waivers to

specifications received by Procurement shall be passed to Engineering for
assessment.

Construction

Where manufacture and construction are performed by Company personnel,

corrective or preventive action shall be carried out in accordance with this
Procedure and GPP 7EG 617. Nonconforming items shall be segregated, where
practicable, from conforming items. Non-conformities shall be recorded on non-
conformance reports. Reports on significant nonconformities shall be transmitted
to Project Management for input into project records.

Where manufacture and construction are performed by subcontractors, corrective

or preventive action shall be carried out in accordance with GPP 7EG 621 and
GPP 7EG 617.

Nonconformities not previously identified by the subcontractor's quality system,

but disclosed by Construction Field Engineers shall be recorded on non-
conformance reports. It is preferable that these NCRs be raised by the
subcontractor. The analysis and agreement on corrective action shall be conducted
in liaison with the subcontractor and documented in site meeting reports
transmitted to Project Management for input into project reports.

Where there is a dispute with a subcontractor over a nonconformity, Construction

shall raise a non-conformance report and, where necessary, liaise with
Procurement and Project Management to resolve the matter as identified in
Section 6.2 above.

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Procedure Number QAP-214 Rev 4
Bechtel Limited
Company Quality System Procedure No: QAP-214

Where nonconformities are disclosed on materials or equipment inspected on

receipt at site, Construction shall raise Over/Short and Damage (OS&D) reports
which shall be analysed with Procurement for action to be taken by Procurement
with the supplier.

Where requests for concessions and specification waivers arise from either
Company or subcontractor manufacture and construction operations, such
requests shall be transmitted to Engineering for assessment.

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Procedure Number QAP-214 Rev 4