PT.

CHEVRON PACIFIC INDONESIA

MFU UPGRADE PROJECT

APPENDIX 1 TO EXHIBIT A OF CONTRACT FOR PROVISION OF MECHANICHAL FLOTATION UNIT (MFU) UPGRADE PROJECT SERVICES No.5748-OK QUALITY ASSURANCE PLAN

A Quality Assurance (QA) manual, procedures, instructions checklists, etc. may be used to provide detail if referenced in the QA Plan; however, the QA Plan shall clearly identify and reference sections of the QA manual, procedures, instructions, and checklists applicable to a particular class of equipment, material, engineering activity, etc. Control of corrections, revisions and distribution of the QA Plan, and its supporting Manual, revisions and distribution of the QA Plan, and its supporting Manual, procedures, instructions and checklists shall also be defined. The QA Plan shall describe the Quality Assurance Program that will be used in the execution of the Work. It shall describe how the CONTRACTOR will fulfill the applicable requirements of the following paragraphs. When accepted by COMPANY, the QA Plan will become the basis for evaluating quality assurance activities on the project. 1. Organization The QA Plan shall contain an organization chart showing CONTRACTORs total organization responsible for performing the Work and clearly showing the assignments and number of personnel responsible for CONTRACTORs QA program for all phases of Project Work. The chart shall show reporting relationships from inspectors up to and including Senior Project Management as well as the interface between CONTRACTOR and subcontractors/vendors. The organization chart shall be supported with a description of each persons reporting and functional responsibility. o All disciplines essential to accomplish the Work shall be staffed with an adequate number of qualified inspectors. Prior to staffing, an organizational schedule identifying people, their responsibilities, and duration of Work shall be submitted to the COMPANY for review and approval. CONTRACTOR and each major subcontractor shall have as a minimum one (1) experienced Quality Assurance Supervisor assigned to the projects Quality Assurance Program. COMPANY will determine which subcontractors are major subcontractors and whether or not an assigned Quality Assurance Supervisor shall be dedicated solely to COMPANYs project. The Quality Assurance Supervisor shall report to an organizational function not directly responsible for performing the Work and to an organization level with authority at least equal to that of the supervisor of the line manager directly responsible for performing the Work. Individuals other than those who actually perform the Work or who are responsible for performing the Work shall perform inspection activities. All personnel responsible for quality assurance and all quality control inspectors performing Work on COMPANYs project shall be competent and fully qualified to perform their duties. If any are deficient, CONTRACTOR shall explain how he intends to

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provide training or otherwise secure competent personnel (third party if necessary) to perform the Work. 2. Design Control CONTRACTOR shall establish and clearly identify organizational design interfaces. The design control procedures shall describe how subcontractors and consultants are to be used in executing project design responsibilities. The specific techniques for identifying and coordinating physical design interface location plans shall be described. The relationship between the design organization and the field construction shall be described. o CONTRACTOR shall develop and maintain a register control system for the preparation, review, approval, distribution, revision and closed-loop control of drawings, specifications, procedures, manuals, instructions and sketches whether originated by CONTRACTOR or others. Procedures are required for controlling design reviews, checking engineering calculations and drawings, controlling design changes, and the issuance of specifications and drawings. The procedures shall clearly delineate the sequence of actions to be accomplished in the preparation, review, and control of these documents. CONTRACTORs qualified personnel shall review COMPANY-supplied design documents for accuracy, completeness, and fulfillment of project design criteria, unless specifically advised otherwise. The method used to document disposition of deficiencies and deviations in design discovered by verification, checking, or design review shall be described. CONTRACTOR shall notify COMPANY immediately of any discrepancies found in COMPANY-supplied design documents by written communication or oral communication followed by written documentation. CONTRACTOR shall assure that personnel performing the Work according to such documents have the latest approved information. Design documents and revisions thereto shall be distributed to responsible individuals in a timely manner and controlled to prevent inadvertent use of superseded material. Obsolete information shall be clearly identified as such and/or removed from Work area and destroyed if no longer required.

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Control of Purchased Materials, Equipment and Services The QA Plan shall contain procedures that clearly delineate the sequence of actions to be accomplished in the preparation, review, approval, and control of procurement documents, including the measures which assure that changes or revisions to procurement documents are subject to the same review and approval requirements as the original documents. Documents for procurement of material, equipment, and services, whether purchased by the CONTRACTOR or by his subcontractors, shall include, but not limited to the following: o o o o Applicable project codes, standards and design specification requirements referenced in procurement requisitions. Listing of Vendor documents such as instructions, procedures, drawings, specifications, Vendor inspection plans, inspection and test records, and Vendor QA records to be prepared, submitted, or made available for the CONTRACTORs review or approval. Listing of inspections that shall be exercised over the sub-suppliers and sub-vendors by the Vendor. The requirement that the events defined in the Inspection Plan and other special inspections that may be exercised over the Vendors sub-suppliers and sub-vendors by the CONTRACTOR or by the COMPANY be incorporated in Vendor purchase orders to sub-suppliers and sub-vendors. Identification of those records that shall be retained, controlled, maintained, or delivered to the COMPANY and/or CONTRACTOR prior to use or installation of the procured item. Provision for COMPANY/ CONTRACTORs right of access to suppliers Facilities and Work documents for inspection and audit.

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CONTRACTOR shall initiate procedures ensuring the qualifications and controlling the selection of all vendors. Suitable requirements for documented satisfactory experience in supplying similar materials, equipment, services to the petroleum, chemical, power, etc. industries and/or physical surveys of the suppliers manufacturing Facilities are required. All major equipment and materials vendors are required to submit evidence of a Quality Assurance Program, satisfactory to COMPANY per this Contract, with bid proposals. The purchaser and supplier shall establish schedules for inspections, surveillance, witness points, hold points, tests, and final inspections for release of equipment for shipping. The CONTRACTOR shall maintain receiving inspection to ensure that arriving materials and equipment are properly identified and conform to the requirements of the purchase documents. All nonconforming items shall be controlled by clearly identifying and segregating them into a quarantined area until proper disposition is made. Similarly, documentation shall be maintained confirming that services purchased directly or through subcontractors conform to procurement requirements. Certification documentation from vendors or suppliers shall either be originals or verified copies noting the actual location of where the originals are held. Identification and Control of Materials, Parts, and Components CONTRACTOR shall maintain an identification procedure of all materials, parts and components, including partially fabricated assemblies. Traceability shall be maintained on all equipment, materials, parts and tags, stamps, stencils or labels or by records traceable to an item throughout fabrication, shipment, erection, installation, repair, modification and use of the item. The location and the method of identification shall not affect the function or quality of the item being identified. The procedure shall require that verification of correct identification of material, parts, and components be made and documented prior to release for fabrication, assembling, shipping, or installation.

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Control of Special Processes CONTRACTOR shall identify those special processes, such as welding, heat treating, nondestructive testing and cleaning, etc., which require procedure qualification and qualification of the personnel using them. Procedures shall be in accordance with applicable specifications. Qualifications of special processes, personnel performing special processes, and equipment shall be kept current and record files thereof shall be maintained. Procedures and personnel qualifications shall be subject to the approval of COMPANY. Special process testing control shall identify the work performed and inspected, and shall be accepted/rejected by using reports, checklists, or other suitable documentation.

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Dimension Control CONTRACTOR shall develop and implement effective procedures for controlling the dimensions of major fabricated equipment and modules as well as all field installations. Such procedures shall provide for witness/hold points to independently verify critical dimensions, such as module interface, castings, pipe bends, anchor bolt locations, etc. before proceeding with work that would increase the cost of correcting possible errors or that would lengthen the construction schedule if error were discovered later in the construction sequence. Inspection The QA Plan shall require that manufacturing and construction inspection and test plans be prepared. Inspection plans shall include all requirements as decreed by all governmental and other authorizations having jurisdiction, such as MIGAS. Plans shall describe the methods and procedures to be employed to assure and verify conformance and quality of the item. The plans shall consist of a flow chart, status sheet, or narrative description of the sequence of activities or operations to be performed and characteristics to be measured. The method of examination, the applicable Acceptance criteria and the documentation requirements shall also be included in the inspection plan.

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The plan shall establish those inspections, tests and hold points from raw material through fabrication, erection or construction, at which conformance to requirements will be verified. Hold points and those inspections rendered inaccessible by subsequent operations shall be verified before start of the next operation. Records of the inspection shall, as a minimum, identify: a) The inspector; b) Type of test or observation; c) Inspection procedure; d) Type of test equipment used and valid traceability certificates where applicable. e) Acceptance criteria; and f) Results. Inspection records shall be signed or stamped and dated by the CONTRACTORs representative. The status of inspections and tests shall be readily determinable. Application and removal of status indicators such as tags, routing cards, traceable records, or other suitable means shall be controlled. 11. Test Control CONTRACTOR shall perform functional testing, including storage/preventative maintenance testing, proof testing, Acceptance testing, and operational test procedures. These procedures shall incorporate requirements and accept or reject criteria contained in applicable specifications, standards, and other design documents. Test control prerequisites shall include at least: Calibrated instrumentation including loop checks; Adequate and appropriate equipment; Trained, qualified and/or appropriately licensed and/or certified personnel; Preparation, condition and completeness of item to be tested; Suitable and controlled environmental conditions; Mandatory inspection hold points where applicable, for witness by CONTRACTOR or COMPANY; Acceptance and rejection criteria; Certification Authority Acceptance arrangements.

Test results shall be documented, evaluated and Acceptance status identified by a qualified individual or group. Where field testing is required, system test plans shall be developed. A pre/post-test checklist containing test control prerequisites shall be developed and used to ensure that systems are properly prepared for tests and test media and testing equipment are removed after the tests are completed. 12. Use, Control, and Calibration of Tools and Measurement Devices and Test Equipment CONTRACTOR shall implement a system for control of measuring and testing equipment. Specific tools and equipment shall be identified to make and perform tests in the field with instructions for their use, calibration and storage. CONTRACTOR shall identify, maintain, control, adjust, and calibrate tools, gauges, instruments, and other measuring and testing devices used for activities controlling quality. Calibration shall be performed at established periods against certified equipment or references, or valid standards where these exist. The calibration records shall be easily traceable to the
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device and shall be maintained at the job-site. Provisions shall be identified for correction of measuring and test equipment found to be out of calibration. 13. Subcontractors Work CONTRACTOR shall maintain procedures for assuring the quality of work done by subcontractors. The procedures shall incorporate the requirements, as defined in the Project specifications, with special emphasis on the qualification of the subcontractors welders, inspectors and testing personnel. The CONTRACTOR shall review and formally concur with his subcontractors QA programs and conduct surveillance and audits of the program activities. CONTRACTORs quality surveillance personnel shall be qualified to perform their assigned tasks and the schedule of subcontractor surveillance visits shall be defined. Materials Handling, Storage, and Preservation CONTRACTOR shall maintain and implement procedures for the handling, cleaning, storage, shipping, preservation and preventative maintenance of materials and equipment. The procedures shall list all work and inspection requirements for maintaining the quality of the material or equipment as well as provide for documentation that the required activities have been performed. Special handling, preservation, storage, cleaning, packaging, and shipping requirements shall be accomplished by qualified individuals in accordance with predetermined work and inspection instructions Nonconformance and Corrective Action CONTRACTOR shall implement procedures to prevent inadvertent use of design documents, materials, parts, components, services or workmanship not conforming to requirements. Procedures shall include closed-loop control for disposition of nonconforming materials, for corrective actions and for waiver of specifications and/or contract requirements and provide for physical segregation of nonconforming materials to preclude their inadvertent use. Conditions adverse to quality shall be identified and reported to appropriate levels of management for correction. Nonconformance reports shall be numbered; identify the Vendor/contractor, the equipment, materials, and/or activity, and the specific problem; give reasons for the problem and indicate how it might have been and will be avoided. To the extent possible, they should indicate what impact the problem will have on project costs and schedule. 16. Documentation CONTRACTOR shall maintain and control all documentation, including that of vendors and subcontractors. Documentation control shall include identification, retrievability, filing, indexing for fabrication records books, quality of reproductions, number of copies, archive requirements and final disposition at completion of the Work. Records shall be protected from destruction by fire, flooding, tornadoes, insects, and rodents; from deterioration by extremes in temperature and humidity; and against theft. Regulatory and COMPANY requirements for permanent records shall be identified and include the responsible author and source of information and indicate format, type of information required and distribution, as well as outline provisions for retention, including possible microfilming. Suitable documentation procedures shall be developed by the CONTRACTOR and implemented to ensure that all pertinent performance criteria and design factors have been considered and that appropriate instructions and procedures are developed and followed. Checklists should be used to acknowledge in writing that the required activities have been completed. Retained records shall include operating logs; result of reviews, inspections, tests, audits, and materials analyses; monitoring of Work performance; qualification of personnel, procedures, and equipment; and other documentation such as drawings, specifications, procurement documents, calibration procedures and reports, and non-conforming and corrective action reports.
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Charts, reports and other engineering data, including photographs, shall: a) b) c) Be processed to produce an agreed upon archival life; Be stored and filed in a controlled manner; and Become the property of the COMPANY upon completion of the Work.

Reporting and communication procedures shall be established to provide timely quality assurance information at COMPANY project meetings. Such procedures shall identify and give reasons for procurement/construction problems and provide for feedback to subcontractors, suppliers and vendors. CONTRACTOR shall issue a monthly Quality Program Report identifying quality problem areas and corrective measures. As a minimum, the Report shall include Governmental regulation status, completed and proposed audits, major engineering, procurement and construction problems and action taken as well as an overview of nonconformance reports. 17. Audits An Audit program shall be developed and implemented to ensure that all elements of the quality assurance plan are being carried out in a timely manner. The CONTRACTORs Quality Department or an approved contracted agency shall execute all audits. Audits shall be performed in accordance with pre-established written procedures or checklists and conducted by trained personnel not having direct responsibilities in the areas being audited. Audits shall be scheduled regularly on the basis of the status and safety importance of activities being performed and shall be initiated early enough to assure effective quality assurance during the design, procurement, and construction activities. The COMPANY shall be informed of all scheduled audit events on a monthly basis and shall be copied on all audit reports. Additional Requirements CONTRACTOR shall incorporate into his Quality Assurance Plan any additional requirements that he considers necessary to properly manage the quality of the Work and meet all applicable Indonesian governmental authorities inspection requirements.

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