PROJECT QUALITY ASSURANCE PLAN

STATEMENT OF POLICY

This document is established by the management of Cranes Machinery Co., Ltd.(CMC) and Fabrication port side to set in-house standards and control of all activities for projects so as to meet the quality of any Contracts within its scope. The intent of this manual is to provide a basic guideline for the day-to-day operations to ensure that our high quality standards of workmanship are achieved.

In matters affecting Quality Control in the field, Quality Control teams assigned to the specific projects shall conduct all inspections as recommended by the Quality Control Manager, the Customer’s required specifications and codes, and ensuring compliance to applicable documents and codes.

All personnel shall use the contents of the Quality Assurance Manual and no deviations from the methods set forth herein shall be permitted, unless clearly authorized by the Managing Group.

PROJECT QUALITY COMMITMENT

The Quality Assurance Manual is modeled to suit the requirements of ISO standard. The procedures included in this Manual are intended to be used as a first level in the hierarchy of the Company’s Quality Assurance System. Statutory Regulations, Government Controls and other applicable local laws (which form the base level), are automatically adopted into the First Level.

The Second Level in the Quality management system is formed by the Internal Department Procedures which are developed based on the Quality Assurance Manual. The Quality Assurance/Quality Control Department also provides input at this level in terms of Audit Procedures and generation and maintenance of historical data records.

Project-specific procedures (compiled to form “Project Quality Plan”) as required may be developed based on the procedures included in this Manual. This then forms the Third Level in the Q.A. System.

Based on the Project Quality Plan described above, individual Project Engineers and Supervisors will be provided with concise instruction sheets on the implementation of relevant aspects of the applicable Quality Plans. This forms the basis of applying the precepts of the written documents to daily work practices.

Audits may be conducted on the Quality Assurance/Quality Control Department and/or its designated representatives or third party Accreditors. Deviations observed in the work system shall be reported back to the Management to concur with the Quality Assurance Department. Suitable changes as necessary may be incorporated appropriately.

1.0 GENERAL

1.1 Introduction

1.1.1    The Quality Plan is the principal quality document for all projects. The Plan sets out the Quality practices, resources and sequences of activities relevant, and at the disposal for use on projects.

1.1.2    The scope of application of the Plan are discussed in Section 1.2

1.1.3    The purpose of the Plan, the primary source documents used in its preparation, and the overall document precedence, are discussed in Sections 1.3 and 1.4 respectively.

1.1.4    The definitions of terms and references used in the Plan are given in Section 1.5.

1.1.5    Section 2.0 of the Plan covers the Project Quality system and describes the main activities at which the quality system is applicable, and defines how theses activities are verified and documented.

1.1.6    The organization projects and associated responsibilities particularly as related to the quality requirements of ISO IN Section 3.0.

1.2 Scope and Application

1.2.1    The scope of the plan includes all activities from Contract Award, up to and including Project Completion.

1.2.2    The Plan shall apply to all personnel assigned to the project, as identified with Plan, and to the associated resources and facilities employed on the contract. As delineated in the Plan suppliers, subcontractors, and sub-tiers thereof, shall be required to comply with quality system requirements and those requirements consistent with scope of work.

1.2.3 The scope includes the following main activities and deliverables.

-     Project Management, reporting and administration.

-        Engineering and Design Management and Control Procedures.

-        Placing enquiries for materials, equipment, services and subcontractors, performing bid evaluations and making recommendations for the selection of vendors and subcontractors.

-        Procurement of all equipment, materials and resources.

-        Planning and scheduling of all activities and deliverables, and coordination of resources.

-        Control of costs, accounting and finance.

-        Construction planning, performance and management of the facilities.

-        Site installation.

-        Control of documentation.

-        Source inspection and materials certificates.

-        Quality assurance.

1.3 Purpose

1.3.1    The purpose of the Plan is to define the project quality system to ensure and demonstrate that the service and facility provided under the control, confirms to the specified requirements in the Contract.

1.3.2    The Plan demonstrates that the Project Management has specified the project objective and policy (as identified in the Project Quality Commitment) and established a system of procedures and work instruction to accomplish them; has assigned duties, delegated authority, and set up suitable testing, inspection, examination and audit programmers to verify the requisite standards of performance have been achieved.

1.4 Source Documents and Precedence

1.4.1    The source documents for the Plan are the following:

-        Contract Documents.

-        ISO

-        Corporate Quality Manuals, Procedures and departmental Instructions.

1.4.2    It should be noted that other Quality System Standards will be considered as alternatives to ISO Standards, if offered by suppliers and subcontractors on individual case-by-case basis, and shall satisfy the applicable elements of corresponding ISO Standards.

1.4.3    The precedence and relationships of source documents, the Plan, and Project Procedures are as follows:

Precedence Level Document

1 Contract Document

2 ISO Standard
3 Quality Plan and Project Procedures
4 Corporate Quality Manuals,

Procedures and Departmental Instructions.

Definitions and References

Unless specified to the contrary, all Quality terms in the Quality Plan shall have the meanings described in ISO Quality – Vocabulary, and include the following.

1.5.1 Quality Policy

The overall quality intentions and directions as regards quality, is as formally expressed by the Project Manager.

1.5.2 Quality Systems

The organizational structure, responsibilities, procedures, process and resources for implementing quality management.

The concept embraces both quality assurance and quality control and applies to all activities pertinent to the quality of the products and services

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1.5.3 Quality Assurance

All those planned ad systematic action necessary to provide adequate confidence that a product or service will satisfy given requirements for quality.

This concept implies a continuing evaluation of factors that affect the adequacy of design or specification for intended applications as well as verifications and audit of all activities, and provision of confirmatory evidence, to create confidence.

1.5.4 Quality Control

The operational techniques and activities are used to fulfill requirements for quality.

The concept of quality control involves the practical means of securing the product or service quality through monitoring and checking a process or technique, and eliminating possible causes of unsatisfactory performance at any stage of project activity.

2.0 PROJECT QUALITY SYSTEM

2.1 General

2.1.1    The project quality system is applied to all project activities including overall project control and management, planning, engineering, design, procurement, construction, commissioning, inspection and testing.

The project quality system complies with ISO, and is implemented through three levels of documents:

Level 1: Quality Manuals, which defines the objectives and policy, and demonstrates how the system is applied to comply with the requirements of ISO.

Level 2: Quality System Procedures which specify the activities, responsibilities, provides guidance and quality standards necessary to meet the specified quality requirements of the contract.

Level 3, Departmental Instructions, which define the detailed methods for the performance of specific activities, preparation of project deliverables and the associated quality controls.

Project Management

2.2.1    Some of the main activities to which the quality system is applicable include:

              -      Project management organization, including organization charts and provision of project personnel.

              -      Project management procedures.

              -      Project control and coordination of all project disciplines and all on-project Vendors and Subcontractors to ensure all work is done to schedule and in accordance with the requirements of Contract.

-        Progress and special reports.

-        Liaison and correspondence with Client.

2.3 Engineering Services

2.3.1    Some of the main engineering activities to which the quality system is applicable include:

-        Developing and implementation of engineering controls.

-        Preparation of engineering procedures, specifications and instructions.

-        Controlling progress and cost.

              -      Preparation of the engineering portions of progress reports

              -      Preparation of Material Requisition for quotations and purchases.

-        Control of documentation.

-        Involvement in vendor pre-qualification, engineering evaluation of bids and preparation of bid tabulations.

-        Processing of site and vendor queries and concession requests.

-        Drawing update to reflect as-built conditions.

2.4 Procurement Services

-        Developing and implementation of procurement controls.

-    Controlling progress and cost.-Preparation of the procurement portions of progress reports

-        Pre-qualification of equipment suppliers.

              -      Preparation of bidders list for all commodities, and services.

              -      Preparation of packing tagging and shipping instructions.

-        Use of standard and specific commercial terms and conditions, including vendor guarantee and representation.

-        Bid reviews, analyses and notices of commitment for project commodities

-        Issue of Purchase Orders, Contracts and technical services Agreements.

-        Inspection and release of materials and equipment and materials from vendors.

-        Expediting of major items.

-        Preparation of transport schedules and customs clearance for major equipment.

-    Review and acceptance of vendor certificates.
Project Control Services

2.5.1 Cost Control Services

Some of the main Cost Control activities to which the quality system is applicable include:

-        Development and implementation of cost control procedures.

-Preparation of trend forecast and change orders.

2.6 Construction Services

2.6.1    Some of the main construction activities to which the quality system is applicable include:

-        Development and implementation of Construction organization and procedures.

-        Construction planning.

-        Rigging studies.

              -      Issue of monthly progress reports including forecast and actual production of manpower.

              -      Issue of certificate of insurance.

-        Ensuring availability of required materials and construction drawings at the right time.

-        Supervision, performance and inspection of site construction activities.

-        Field purchasing and material control.

-        Preparation of as-built mark-up.

2.7 Quality Assurance Services

2.7.1    This quality satisfies the essential elements of ISO, Quality systems – Model for quality assurance in production and installation.

2.7.2    The effectiveness of the project quality system will be assessed by quality audits.

2.7.3    Monitoring, overview and reporting of the quality assurance activities will be the responsibility of the project QA Manager.

2.7.4    The responsibilities and main activities of Quality Assurance are described in Section 3 below.

3.0 PROJECT ORGANIZATION AND RESPONSIBILITIES

3.1 Organization

3.1.1    The project organization charts and the interface with Company are shown in Chart 3 of Attachments. Any revisions to these charts will be issued separately to this Plan. Separate organization charts are issued of the project functional group.

3.1.2    The Quality Assurance organization consist of the Project Quality Assurance/Control Manager, and the Field Quality Assurance Engineers, or Inspection Engineers. Additional Quality assurance personnel will be employed when required.

3.1.3    The Quality Assurance team is completely independent and reports to the Project Manager through the QA Manager. The QA team members are not engaged in any Project ‘in-line’ duties and are therefore free to examine and audit all project activities and groups.

3.2 Responsibility for Quality

3.2.1    The Project Manager shall be ultimately responsible for the establishment, implementation and maintenance of the project system. The responsibility and the necessary authority shall be delegated as appropriate, to the following:

-        Project Functional Managers who are responsible to the Project Managers.

-        All other project personnel who have responsibilities for functions affecting quality.

3.2.2    The authority and responsibility delegated to the above project personnel within the scope of work (including interfaces and coordination with others) shall include but not limited to:

-        Implementing and maintaining the project quality system.

-        Identifying and evaluating actual or potential problems which can adversely affect quality.

-        Initiating, recommending, and providing effective solutions to such problems.

-        Ensuing awareness and understanding of the project quality system by all their staff for its implementation and improvement.

3.2.3    The responsibility for compliance with the appropriate quality system requirements shall be imposed on vendors, subcontractors and sub-tiers thereof, consistent with their scope of work, through the terms and conditions included in purchase orders and subcontracts.

3.2.4    The project quality responsibilities are compiled in relation and agreement with ISO.

3.2.5       The quality responsibilities of each functional group shall be identified in project procedures.

3.2.6       The Project Quality Assurance/Control Manager shall act as the management representative

The Quality Assurance Manager shall be responsible for the preparation and maintenance of the Quality Plan.

DOCUMENTATION

4.1.1    Job Completion Documentation The intent of this procedure is to outline the system to be followed for the

final inspection, documentation and acceptance by the Client of all constructed concrete works, or fabricated units and assemblies. Final Inspection Prior to the handover, the Client shall carryout the final inspection and acceptance of all constructed concrete works, or fabricated units and assemblies in accordance with the applicable specification meeting the Contractual requirements.

Documentation All documentations related to the Client’s Project shall be as follows; Materials Documentation Book.

• Material certificates (if applicable)

• Traceability / Identification drawings, etc. As-built Drawings Book.

                       Structure, electrical, instrumentation, mechanical, etc.

                       Traceability / Identification drawings, etc.

Punch Lists Final Acceptance Certificates (for structures, electrical, instrumentation, mechanical, etc.

All Documentation shall be made available to the Project Manager / Engineer for transmittal to the Client’s Representative for signature and acceptance.

Responsibility

It shall be the Client’s responsibility to carry out the final inspection prior to signature of acceptance certificate and to ensure that the work has been completed in accordance with the Specifications.

It shall be the responsibility of Project Manager / Engineer to ensue that all documentation applicable to Client’s project are compiled and signature is obtained from the Client’s representative on the acceptance certificates.

It shall be the responsibility of the Q.C. Department to compile and maintain the updated documentation issued during the construction and any associated fabrication and to prepare for final acceptance report.

Q. C. Department shall advise the Client of the time of final inspection, at least 24 hours in advance.

The Quality Assurance Manager shall carry out periodic checks and ensure that the contents of this procedure are adhered to by all concerned.

4.1.2 Retention of Records

This procedure is intended to establish a system for the retention of all forms, drawings, test reports, data reports, non-destructive examination results, etc.

Procedure

The following original files shall be retained in the departments as listed below;

              Drawings to indicate latest Engineering revision

              Customer specifications and Engineering/Procurement/Q.A /Q.C. drawings

              Purchase Orders Procurement/Engineering

              Shipping Documents Logistics/Procurement/Engineering/Q.A. / Q. A.

              Materials requisitions Engineering/Logistics/Procurement/Q. A. / Q. A.

              Mill test reports, materials Engineering/Q. A. / Q. C. certificates, etc.

              Completed Project file Project Ops/Engineering/Q. A. / Q. C.

After a project is completed and all the records have been compiled, the files shall be maintained by the respective departments, in the general archives for the duration specified in the Contract and/or handed over to the Client.