Refinery Development Master Program Project

Refinery Unit V Balikpapan

Offsite & Utilities EPC Package

PROJECT QUALITY PLAN

EPC Contractor:

PT. PP (Persero)
Tbk.

O&U/TRI/AE/PQP/001
Purpose:
ISSUED FOR APPROVAL
Document Type:
QA/QC

Issued for
0 18-04-17
Approval
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Re
Description Date Prepared Checked Approved
v.

REVISION HISTORICAL SHEET

Rev. Date Description

No
1
2
3
4
5
6
7
8
9
10

DISTRIBUTION LIST

PP

Project Manager
Project Control Manager
Procurement Manager
Construction Manager
QC & Commissioning Manager
Admin & Finance Manager
Engineering Manager
Project Engineer
Mechanical Lead Engineer
Piping Lead Engineer
Process Lead Engineer
Civil Lead Engineer
Electrical Lead Engineer
Instrument Lead Engineer
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TABLE OF CONTENT

I. General4

II. Scope 4
III. Purposes 4
IV. Reference 4
V. Terms and Definition 5
VI. Project Quality Policy and Quality Objectives. 5
VII. Organization and Key Responsibilities 8
VIII. Resources Management10
IX. Product Realization 11
X. Corrective and Preventive Action 25
XI. Quality Control 27
XII. Quality Records 28
XIII. Quality Audit 28
XIV. Attachment 28
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I. General

This Project Quality Plan (PQP) is created as minimum guidance for the implementation of
Quality Management System (QMS) ISO 9001:2008 on offsite & utilities for RMDP project.
This PQP is briefly general guidance to be executed and effectively in order to assure the safe
and reliable quality in all project activities for Project Management, Construction, Site
Engineering (if any), Quality Control, Material handling & Control, Safety, Pre-Commissioning,
Commissioning, and Project Hand Over.

II. Scope

This Project Quality Plan (PQP) is applied to project Offsite & Utilities (O&U) for RMDP project
in Balikpapan in order to comply with client requirements stipulated in the contract
documents. This PQP will be applied with revision or adjustment depends on the nature of
project and client requirement. If this PQP has conflict with the contract document, the latest
revision of the contract document shall take precedence.

III. Purposes

This document describes the proposed QMS to be utilized by PT.PP Persero (Tbk) EPC division
for project and will be described in more detail with Project Plan and related disciplines
execution plans, project procedure which relevant with design manuals / work breakdown
structure.

IV. Reference

a. Clients requirement / Contract requirement Technical part of RFP section 9

b. Quality standard ISO 9001:2008
c. Other applicable statutory and regulatory/legal requirement related to project execution

V. Terms and Definition

The following words and phrases shall have the meanings hereby assigned to
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VENDOR / SUBCON : The supplier of equipment and materials including related

services to PP for the work under the contract.

PRODUCT : An all inclusive terms used in place of any of the following;

equipment, material, part, structure, or unit.

SERVICE : The performance of activities such as design, fabrication,

inspection, non-destructive examination, repair, or
installation.
QUALITY : Fitness for use; meets the intended purpose, satisfactory
perform in service for a specified time.
QUALITY ASSURANCE : Part of quality management to ensure the quality process
from end to end business process which is in associate with
quality.
QUALITY CONTROL : Part of quality assurance which, through check, reviews,
measurements, test, inspections, determines the
specifications are met.

VI. Project Quality Policy and Quality Objectives.

Quality Policy is established which include a commitment to comply with requirement and
continually improve the effectiveness of the QMS and provides a frame work for establishing
and reviewing quality objective. The quality objectives including those required to be met the
requirements of the project are established at relevant functions and levels within the
Project and the quality objectives shall be measurable and consistent with the PP - EPC
management system policy and clients objective. All levels within the organization have
committed in business cycle to provide the excellent services of our scopes as per contract
document to our clients which have added value for all stakeholders.

Excellent services are focused to maintaining and continually improving quality and
productivity that trigger of competitive price, on time schedule/delivery, safe, secure, health
work environment, and profitable value. Beside, excellent services are achieved through
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maintaining and developing people for multi-tasking who have competency, multi-skill, and
effective mentality for implementing, maintaining and continually improving work methods,
technology, quality management system and good client relations in running business cycle.

The quality objectives describe as follow:

Quality Objective Target Remarks

Corrective Action Closure 85%

All inspection shall be conducted as per 90%

agreed and approved ITP
Customer Complaint Max 5 Case Formal Complaint

Tools & Equipment certification and 100 %

Calibration

Other monitoring related QA/QC performance will be included on QSHE Project Assessment
Score Card System that will be conducted quarterly.

Quality policy shall be socialized to all employee in any means of communication method such
meeting, toolbox meeting etc.

Quality policy as shown below:

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VII. Organization and Key Responsibilities

To ensure the responsibilities and the authorities are defined and communicated to all
employees, brief outlines of the key personnel responsibilities associated with the project is
describe on below description for all positions / functions level is defined in this document.
The project organization had been structured to accommodate all phases of the project.
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A. Project Manager is responsible:

1. Ensure that the Project Quality Management System is implemented and maintained.

2. He shall report to client, end user and Board of Director on the performance of the
Project Quality Management System, any need for improvements and for the provision
of all necessary and appropriate action to ensure fulfillment of customer satisfaction
and compliance to the quality standard requirements.

B. Construction Manager is responsible:

1. The overall site management and project co-ordination with the Client.

2. Ensure that all the aspect of the job which are under the companys scope of work are
carried out in accordance with the approved design and specification to achieved
quality standard that is complied with clients requirement.

3. Ensure that the quality commitments described in the PQP are implemented by
various sections that are involved in the project according to their respective field of
work.

C. Engineering Manager is responsible for :

1. the overall design and engineering management and for leading and supervising a
team of engineers as they develop, test, modify, and create solutions to technical
problems.

2. Supervise and lead engineers, scientists and technicians who design machinery, plan
and develop civil projects, and oversee production and quality control.

3. Direct and coordinate production, operations, quality assurance, testing, or

maintenance in industrial plants.

4. Oversee the research and development of new products and procedures. Hire, train,
and mentor other engineers and supporting staff.

5. Write performance reviews and solve internal issues and make detailed plans to
accomplish goals.

6. Review, approve, or modify product designs.

7. Review and recommend contracts including develop cost estimates.

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8. Draft proposals and reports for clients.

9. Improve manufacturing processes and advance scientific research.

10. Check technical accuracy of work.

11. Establish administrative policies, procedures, and standards. Coordinate activities of

unit with other units or organizations. Confer with higher levels of management.

D. QA/QC Project is responsible:

1. Establish, implement, coordinate and maintain the Quality System as per this PQP
dully approved by the appropriate authority.

2. Assist the site management through regular state of inspection of field production
activities in accordance with the Inspection and Test Plan (ITP) appendix in the PQP to
ensure that work is carried out in conformance with relevant specification and
drawings.

3. Documentation, maintain of inspection and test activities as approve of quality.

4. Identify quality-relative non conformance and initiating corrective action or solution to

the quality problem to prevent recurrence finding.

5. Record and follow up the corrective action of customer complaint.

E. Project Control Engineer is responsible for:

1. Overall planning and control of schedule, progress, resources, and cash flow,
productivity, efficiency, additional work and profitability.

2. Make an analysis for any variance or project costing.

3. Check all of documents such as PO/RO, invoices, Sub-Contract Order, payroll, etc.

4. Preparation of progress reports on a regular and ad hoc basis.

F. Project Field Engineer and Supervisor is responsible for

1. Actual performance of work assigned to them and has direct control of labor working
under them.

2. Giving a feedback regarding quality-related problems in the field to the Project

Manager & Site Manager.
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3. Ensure that the drawings being used for the execution of the work are latest revision.

G. Project Logistic is responsible for:

1. Purchasing material, tool and consumable needed in the project. He also responsible
for equipment for material handling.

H. Project Material Control Engineer is responsible for

1. Receiving, storage, preservation and issuance of all material.

2. Coordinate with QC Coordinator for conducting of material receiving inspection to

make sure that the goods received are in good condition and also quantity check
whether tally with packing list or not. If any non-conformance, he shall inform to QC
section regarding the discrepancy noticed.

The organization chart for quality refer to Attachment 1

VIII. Resources Management

A. Staffing

PP EPC will provide adequate numbers and qualified personnel, to ensure that
personnel work affecting conformity to product and service requirement is fulfilled
base on contract document. Ensure that all personnel are aware of their activities to
the achievement of project objective. PP EPC also shall appoint an adequate number
of competent QA and QC to ensure an adequate Quality Management in the
execution of the contract.

B. Information Technology

It is PP - EPC policy to maximize the utilization of information technology in its daily

operations to improve the efficiency and effectiveness of its work processes. This
effort is aimed at improving the competitive value of PP - EPC to reach its objectives.

Hardware and networking infrastructure is designed in such a way to achieve a great

performance and have a long relative term that the information system would be
running well. Messaging system (e.g.: electronic mailing system, etc) is also prepared
to cover all internal and external communication.

Computer software that consist of applications that is build and developed by in-
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house (e.g.: engineering and non-engineering software) is performed in a controlled

and timely manner at predetermined intervals to ensure any anomalies are noted
and rectified immediately. To avoid any problem during operation, software, data and
working file shall be back-up periodically. Computer software used in a design process
will systematically tested to demonstrate that it is fit for the purpose intended. In
case, PP EPC use specific in-house or commercial software is used, PP EPC shall
guarantee the validation of the software and the verification of the calculation
performed.

C. Infrastructure

It is PP - EPC policy to provide comfortable, safe working environment and associated

utilities including equipments and supporting services.

PP - EPC will provide and maintain working space, office equipment and other
supporting services as required. Include For the purpose of liaison and making client
approval, intends to have a small team resident in Contractors home office(s)
supported time to time by specialist on short visit & required: office space, secretary,
filling cabinet & general stationary equipment, line telephones, internet access, fax &
photocopier, parking.

IX. Product Realization

A. Engineering and Design Change

Engineering work quality is attained by defining requirements completely before

beginning of the work, planning work effectively so that it can be done right at the
first time, identifying and correcting potential obstacles to prevent non conformance,
measuring Engineering ability to do quality work right the first time, and eliminating
the root causes of any problems encountered. The Engineering team shall control
and verify the design of the facilities to ensure that specified customer requirements
are satisfied. The following design control elements shall be used as a minimum to
provide this control and verification.

1. Design Planning
The Engineering plan, which defines the client and/or consortium and PP - EPC
requirements to the Engineering team, shall be provided. The above plans are
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updated when necessary to reflect any changes in execution philosophy

2. Design Input
Prior to start engineering activities all project and client requirements shall be
available. These inputs shall include all basic design and specification.
3. Design Output
The engineering execution is carried out in accordance with plans, input data, and
other requirements and that a quality product is delivered to the client. Provide
appropriate information for purchasing and subcontracting and construction, contain
or reference project acceptance criteria.
4. Design Review and Verification
a) Discipline Internal Design Control
Design decisions shall be made by qualified personnel who are in possession of,
or have access to, all pertinent design criteria, contractual requirements, codes,
regulations, standards and guidelines.
b) Inter-Discipline Design Review
Documents, which require review/comment by more than one discipline prior to
formal issue, shall be distributed for review in accordance with the document
control procedures. The timing of these distributions shall be made to satisfy the
project activity schedule. And physical design interface are identified by internal
coordination meetings of design groups within the design discipline.
c) Review & Approval
Review and approval between PP - EPC and client will categorize document of
engineering based on review & approval procedure: for approval, for review and
for information.
d) Establish engineering documents or construction documents and as-built.
e) Control of Vendor Designs
Vendors who provide equipment and materials for the project are responsible
for the accuracy and completeness of their designs. PP - EPC monitors and
controls the quality of the vendor designs, in accordance with vendor print
handling procedure, communication lines, key personnel, document to be
submitted, witnessing, and other information transmitted across the interface
shall be identified in the purchase specification. Where necessary, the meeting
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for engineering coordination shall be held between PP-EPC and any

subcontractor who is prepare the drawing.

5. Design Validation

Performance guarantee test runs, when required by contract or purchase order,

together with client operation feedback, provide the final validation of PP - EPC
design. Prior to commencement of test run the client and customer, or the PP - EPC
and vendor, agree on test run procedures.

6. Deviation and/ or Alternative

If it is judged by Design Engineer that any alternations to, or deviation from the
contract package or engineering documents supplied by client or consortium are
necessary, the proposed deviations and / or alternatives shall be submitted thru Job
Leader Engineer and Engineering Manager for approval with the explanatory data.

7. Design Change Control

All Design shall be approved according to client requirements and applicable

standard codes. All of design request changes should be engineering and
contractual reviewed prior to accept the design changes. A design change control
procedure should clearly define the process by which changes are requested and
approved and who is responsible for thos processes, including:

The reason for the change

Who is requesting the change
The consequences of the change, including health, safety, time, quality and
cost.
Proposal for mitigation of any consequences
The risks associated with the change
Alternatives to the proposed change.
Time by which the change must be instructed.
All approved design (Drawing and Documents) changes should be control, monitor
and distributed to related person.

B. Procurement

All materials, equipments and or services shall be procured from the appropriate
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and reliable sources / vendor comply with project specification and deliver in good
condition and in a timely manner.
Appropriate and reliable sources shall be considered with vendor quality
management procedure and customer specification shall be clearly stated on the
purchase order with full detailing of the product and or service required. Continuous
monitoring of the vendor and or sub contractor performance shall be undertaken by
means of quality surveillance and expediting. Appropriate and reliable sources shall
be considered with vendor quality management procedure and customer
specification shall be clearly stated on the purchase order with full detailing of the
product and or service required.
Continuous monitoring of the vendor and or sub contractor performance shall be
undertaken by means of quality surveillance and expediting.
The activities include preparation of procurement documents, the assessment and
selection of vendors, tendering and evaluation of bids, requisitioning, control for
quality and schedule, and control of certification documentation. Control of
purchasing materials and services shall be initiated with a kick off meeting as
required in the relevant quality programs with vendors in order to reach a thorough
understanding of the purchase order conditions and requirements.
1. Selection of Vendor
PP - EPC will select potential vendors in principle follow to the vendor list and PP -
EPC may add vendors additional to those agreed only with the express approval of
client. Procurement Manager will issue request for quotation to potential vendor,
upon request of Project Manager, QA/QC Manager shall perform QA/QC surveillance
to vendor in accordance with the QA levels of product and services to be made. The
result shall be reported to Project Manager.
2. Vendor Qualification

All Vendors/ Subcontractor shall be pre-qualified based on their capability to supply

materials and services that comply with the quality requirements stipulated. A list of
tendered shall be provided based on their proven ability to comply with the
intended use or services.

Their abilities are evaluated taking account of previous supply, quality

questionnaires, interviews, surveys, qualification audits and appraisals. Vendor
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Quality Management or evaluation shall take consideration, but not limited to the
following:

Previous work undertaken for CONTRACTOR

Quality of any work performed
Equipment and manpower resources.
Availability of acceptable quality system established
When Vendor's capabilities are not appropriate, pre award assessments shall be
carried out to ensure their technical, quality, capacity and the results of such
evaluation fully recorded on the designated format.

3. Verification of purchased material.

Verification of purchased products, goods, or services is carried out by means of

reviewing and witnessing inspection and tests, surveillance and audits. Vendor's
quality plans shall be evaluated in accordance with the criticality rating established
and the associated quality programs. Quality audits shall be conducted as planned
and when deemed necessary in order to ensure that the implementation and
effectiveness of the vendor including their sub vendor's quality plan. Audit reports
shall be issued on the findings and necessary corrective action shall be recorded to
rectify non-conformance, and closely followed and monitored. Items and notification
points of the inspection and test shall be identified and mutually agreed and
confirmed by the vendor, Contractor and the Client.

4. Material Delivery

After materials and equipments have been verified and ready to delivered, traffic
department will arrange and controlling the materials and equipments delivered till
destination safely and accordance to the project schedule. PP - EPC shall comply with
all the requirements of Government of Indonesia's UU 10 /1995 (Customs
inspection of foreign goods by the appointed surveyor), as it applies to the project.

5. Material Handling and Storing

The efficient and proper handling and storing are vital to successful of the project.
Proper material storage system must be designed to accommodate the loads of the
materials to be stored, the sensitive environmental needs for different materials, the
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functional, efficiency, safety and the protection of the materials from fire, water and
local disturbance. Prior to material arrive at site, method of handling and storage
area has to well prepare to avoid any impact from bad handling and storing,
including Material Damage, Loss Material and Safety Issue.

PT PP Divisi EPC should be able to implement the best practice of handling and
storing of material and methods for eliminating the occurrences of such accidents.

6. Client Supplied Product

All products supplied by Client are handled in a controlled manner and Subject to
inspection on receipt to verify conformance to the specified requirements and
conditions. All products that are received in a damaged state or without the relevant
documentation shall be segregated and the cause recorded and reported to the
Client.

C. Construction

"PP - EPC commits to construct a safe and quality product, within schedule and
budget, to fully meet clients requirements".

To ensure accomplishment of PP - EPC policy, construction works shall be planned,

executed, controlled and verified thoroughly. Construction planning shall be
conducted to detail all aspects of construction: SHE plan include Environmental
control at site that accordance to the statutory regulation and the work environment
shall be maintained clean and tidy to assure that the work is performed under well
controlled conditions for work and safety, site quality plan, mobilization and progress
plan, execution strategy, construct ability studies, testing and pre-commissioning
plan and the necessary logistical supports. Besides the contract scope of works, the
planning shall be based on specific ate condition, geographic as well as socio
economic conditions of the area with considered to employ directly or indirectly, all
local personnel required for project (except for that to be performed under sub-
contract) including, but not limited to, labors, skilled craftsmen, electrical, technical,
supervision and management staff. Coordination with other divisions shall be made
to streamline the plans to meet the project's objectives. Construction works shall be
carried out in accordance with drawings and specifications. No material shall be
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installed unless it has passed from materials receiving inspection.

Detailed planning shall be made prior to start with any work, to ensure safety,
quality and its target progress. Evaluations during performing the works shall be
conducted periodically to maintain the project objectives.

A corrective action shall be made if actual performance of the works so indicates a

potential problem. All resources: manpower, equipments, subcontracts, shall be pre
qualified to perform their duties.

PP - EPC may need involvement of sub-contractor in the execution of construction

works is generally performed by Indonesia subcontractors, except for those part of
the work which are technically complex (heavy lift activities and the like) and where
Indonesian subcontractors do not have adequate experience.

Any sub contractor shall be pre qualified prior to be included in the bidder list of any
project to ensure their capabilities to deliver quality products to fully meet the
projects and customers requirements. Subcontractor performance during project
execution shall be monitored and evaluated thoroughly to assess their qualification
for any future relationship.

D. Commissioning

PP - EPC commits to perform commissioning, start up, performance test and also
maintain a safe and quality product during warranty period to full meet project
requirement. The detailed requirements for mechanical acceptance shall be agreed
between PP - EPC and client.

PP - EPC shall supervise client operating personnel to commissioning, start-up and

performance test for the supplied packaged equipments, including arrange vendor
serviceman PP - EPC shall designate a person to be assigned essentially full time
from the appropriate time. After final acceptance, PP - EPC shall assist client
operating and maintenance personnel as required to meet the requirements of
satisfactory plant operation within the supplied equipments up to end of warranty
period.

E. Project Coordination
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To achieve the project's objectives, coordination during the execution of the project
shall be managed with primary concern on safety, quality, schedule and cost. The
coordination procedure between client, PP - EPC and Subcontractor shall be
established, in which each scope of work, line of communications, information
transmissions routes, etc. are defined. All procedures shall be subject to agreement
and approval of client in so far as such procedures related to client's rights and
responsibilities under the contract. The procedure shall be issued to all relevant
parties. Information of project status; Inquiries; contras or order handling, and
feedback, shall be communicated and treated effectively. Project document shall be
prepared, issued and updated in timely manner. The project scope and requirements
shall be clearly defined and communicated to the project team member and that the
execution is consistent.

Interfacing activities among department and or work group shall be done in a

systematic and controlled manner. All input required for design, procurement and
construction activities shall be controlled and maintained. Contractor shall arrange
regular meeting with client to review the status of the Project. These meetings shall
be held generally in site office. An overall coordination meeting to review Project
status shall be arranges at approximately a month intervals.

1. Project Control

Project control system is establish and implement to provide guidance for the
execution of the project and to anticipate and minimize project cost, potentials cost
trouble and schedule delay.

2. Schedule & progress activity

Activities within project shall be monitored, schedule and the actual progress is
controlled against the current plan, an early warning shall be provided as well as the
corrective action in case of any deviation from the plan. Appropriate alternative
solution shall be introduced to minimize schedule impact. These schedules shall be
updated in accordance with project developments, and issued to client monthly
intervals.
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3. Project Report

The Project status shall be periodically reported in order to give clear picture for all
relevant parties on the ongoing progress and fore casting all projects area of
concern. The project report shall contain adequate project status and list significant
information of the project work activities. Fixed Assets and Cost Report are also
prepared and as necessary will be submitted to client for their accounting record. PP
- EPC shall highlight which activities are behind schedule and demonstrate in detail
by reference to individual networks or bar line schedules how such delays impact on
the final completion of the project, at the same time outlining steps being taken to
correct such delays.

4. Material Control

All material, which designed, purchased, delivered and installed shall have controlled
and systematic identification and traceability for ensuring that correct materials of
right quality are used in the product and that the individual items and the final
products are in full compliance to the specified quality requirements and are
provided with relevant material certification as necessary.

5. Positive Material Identification

To facilitate effective management and control of purchased materials, the material

control plan should be developed based on information obtained from the
contractual scope of work and the project master schedule.

The plan should address but not limited to the following Subject:

Material classification execution philosophy and methodologies.

Strategy that promotes the use of correct specification, coding and

quantification of materials.

Bulk material take-off philosophy and methodologies.

Early material order.

Definitive estimate.

Fabrication status.
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Construction / commissioning material allowances.

Overall coordination for bulk materials across EPC

A system to monitor the material status will also be develop and frequently updated
to provide current information and early warning in case of potential delivery
schedule delay and over-shortage material is observed. Traceability requirements
the materials/products shall remain identified throughout the work execution for
ensuring and maintaining accuracy and correctness during application and
installation of these at the designated places and that the materials/products and
their elements are traceable to their respective quality records. The degree and or
stringency of traceability are determined according to the quality classification of the
product and project requirements.

6. Document Control and Quality Records

All documents affecting quality whether its come from client, vendors, and
subcontractor and internally located at site shall be suitably controlled to ensure that
sufficient and correct information is available at all times, and any obsolete
documents are removed from use.

Quality records are the documented evidences that processes are executed
according to the quality systems plan and requirements, such as inspection results,
audit results, calibration data, data sheets, technical specifications, engineering
changes, corrective action request, etc. In the ISO Standard, Quality records are kept
to demonstrate conformance to specified requirements and to the effective
operation of the Quality Management System. PP - EPC shall maintain complete
records of all materials and documents received, and appropriate filling and storage
system. In addition to the above, this policy is intended to structure, standardize and
control all contractors level of information that directly impacts the quality of
product. All incoming and outgoing document are handled in a systematic and
controlled manner to ensure that appropriate edition of the pertinent documents
are available at all relevant locations for the personnel concerned and obsolete
documents are removed from all points of use. The Document Management System
provides registers to identify documents and, where applicable, showing status of
the document such as revision, purpose of the issue, preparation schedule / actual
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and control distribution.

a) Document changes

Ensure that all changes to documents and data are reviewed and approved by the
same function / organization and authorized personnel that performed the original
issue. Where revisions have been undertaken, the new revision number shall be
stated and the previous revision shall be clearly stamped as superseded. Certain
copies of preceding issues may be retained for reference purposes but these shall be
stamped as superseded, as noted above.

b) Revision status

All documents subject to revisions may whenever possible, have the relevant
sections marked to indicate the revision, and the relevant control sheet completed
stating the revision.

c) Document issuance

Quality Management System document shall be distributed in a controlled manner.

The Distribution system, in which each recipient of the document is ensured to
receive the correct and latest revision of the document, is established, maintained
and continuously improved. A master list of all recipients is an example of such
system. The documents shall be distributed using PP - EPC document distribution
system. PP - EPC shall make or distribute the number of copies required for
construction.

d) Contract Management

Prior to and during the execution of the project, contract with the partner and or
client shall be reviewed in depth in order to avoid any dispute and to ensure that the
scope of work stipulate in the contract is within PP - EPC competencies, when
incomplete, ambiguous or conflicting inputs are found in course of the contract
review, contractors project manager will discuss with client to draw up
requirements, and result shall recorded for confirmation.
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The order of precedence in descending order to be used in issues relating to the

implementation of the contract shall be as follows:

Contract

Contractors Proposal

Minute of Meetings held by client and contractor

This shall also be applied to contract with vendor and sub-contractor engages in the
project. Contract manager shall be responsible as the focal point to perform the
contract review from all aspect, i.e.: technical, commercial and legal. QA/QC
Coordinator, and/or job leader shall review the contract with respect to activity
related to their scope of work.

All clarification, negotiation and response shall be compiled and made form apart to
the contract. Any development to the contract during the project execution due to
changes of the scope shall be governed as the original contract review and the result
shall be amended.

All documentations relevant to the review of the contractual requirement including

any clarification and negotiation obtained by the use of the contract review shall be
filed in the project contract review file; this shall include minutes of clarification
meeting.

7. Inspection, Testing, and Product Quality

All activities relate to inspection and testing shall be performed in a systematic and
controlled manner in order to provide confidence that the products and or services
is delivered with the desire quality level All materials and workmanships shall be
subject to inspection, examination and test by client in accordance with establish
procedure.

a) Inspection and Test Methods

A variety of methods are used during the execution of inspection and testing
activities to verify the integrity of the product during the manufacturing, or
construction/ installation stages. These methods shall be utilized in a controlled
manner to assist with the interpretation of the results and shall include but not be
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limited to: Non Destructive Examination, Dimensional Verification, Pressure Testing,

Functional Testing, and Material Validation.

b) Receiving Inspection and Testing

All received goods shall be inspected on receipt and verified for acceptability.
Receiving product may not be used or processed without prior verification, in
accordance with the relevant procedures to ensure that it conforms to the specified
requirements.

c) In process Inspection and Testing

During the processing of the product, it shall be subject to a variety of inspection

and tests to verify its conformance with the requirements and determine and
acceptability. The product may not be allowed to proceed to the next activity until all
the subsequent tests and inspections have been performed and proved acceptable
and that all the objective evidence to support the acceptance have been reviewed
and signed off where required, by the relevant authorized personnel.

d) Final Inspection and Testing

Final inspection of the product / item shall ensure that all the appropriate tests, such
as Non Destructive Examination / NDE, pressure testing, visual and dimensional
checks have been carried out and that the inspection and test plans applicable to the
product / item have been signed as necessary and that all objective evidence
required has been provided and is acceptable to the requirement No product shall
be released until all the inspection and testing has been verified.

e) Inspection and Test Status

Throughout stages of production and installation, the inspection and test status will
be maintained as necessary to identify the status of verification activities and
illustrate any failure of the product to meet the required criteria. The status of
inspection and test shall be dearly marked to ensure that the products have passed
the required subsequent inspections and test.

f) Control of non-conforming product

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Any product or service that fails to meet the requirements will be suitably controlled
and rectified to ensure that no defective products and or services are delivered to
client. The non conformance and its resolution shall communicate to all relevant
parties and as necessary including the client. Rejected material shall be satisfactorily
replaced with proper material without charge therefore by PP - EPC, and PP - EPC
shall promptly segregate and remove the reject material. Any non-conforming
product shall be identified and segregated with other product.

8. Product Preservation

All products: equipments, materials and spares items shall be suitably protected at
all times to prevent product degradation. All materials and equipment shall preserve
and have adequate protection during transportation, storage, and installation prior
to start up to ensure that the condition would allow it to function as per the initial
requirements. Vendor/subcontractor shall provide methods and means of handling
to prevent damage or deterioration.

9. Monitoring and Measurement of Processes

PP - EPC applies suitable methods for monitoring and measurement of processes to

demonstrate the ability of the process to achieve planned results. The following
processes will be monitored and measured, but not limited to:

a) PP - EPC'S management system objective, progress, schedule, and budget

performance, nonconformity work process, vendor and subcontractor
performance etc.

b) Tools & Measuring Instrument

PP EPC will provide list of measuring instrument (including tools and

equipment), Instrument calibration status log shall be created contain
information as follow, when applicable:

Instrument type,

Manufacturer, serial number and type of calibration

Instrument uncertainty/resolution/measuring range

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Reason for calibration

Last calibration date

Calibration certificate expiry date

Measuring instrument shall be identified by a serial number at minimum

information: serial number, reference number of calibration certificate,
calibration date, and expiry date.

X. Corrective and Preventive Action

All quality problems which are require investigation and corrective actions to eliminate and
minimize a recurrence of the problem. Any non-conformance will be investigated to
determine the root cause, and various data available will be used to determine opportunities
for improvement through CA Tracker form. Comments on the causes any corrective actions
shall be distribute to the relevant groups who perform similar work. Work processes,
records and Client's feedback are analysed to detect any sources of potential problem, and
preventive action is implemented before the problems occur. Control is applied to ensure
that corrective and preventive action is implemented and that they are effective. The cause
of non-conformance shall be investigated and corrective actions shall be undertaken by
authorized personnel to prevent repetition. Audits and or analysis of all processes, work
operations, concessions and quality records shall be made to detect and eliminate potential
and actual causes of non-conformance. All investigations shall be conducted through the
corporate and/or project quality system to identify any common causes.

1. Corrective Action

The corrective actions shall be implemented to ensure that:

Apply the necessary controls to ensure that corrective actions undertaken

are effective

Implement and record all necessary changes to the documentation of the

quality management system

Shall be at a level that corresponds to the risks encountered and address such
factors as safety, production costs, quality costs and performance and shall be to the
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satisfaction of the interested parties and adequate in their content to ensure that
persons are fully aware of the requirements and methods to be implemented to
ensure satisfactory rectification of the non conformance.

2. Preventive Action

The preventive actions shall be implemented to ensure that:

Use any appropriate sources of information to detect, analyse and eliminate

potential causes of non-conformity.

Initiate any appropriate preventive actions against any possibility of

occurrence of defective products.

Implement quality-planning, quality control including inspection activities

and quality audit to prevent quality deficiencies and quality problems
systematically.

Maintain and submit the relevant records of all investigations and analysis
on actions taken for management review.

3. Follow Up Corrective and Preventive Action

To monitor status of corrective action or preventive action status, CA tracker will be

used as tools to monitor the progress of corrective action and preventive action.
PM/Manager will responsible to close any corrective action and monitor the
effectiveness of corrective or preventive action.

XI. Quality Control

Quality Control consists of the implementation of the Project Quality Plan (PQP), Site Quality
Control Procedures, Inspection and test plans with Client Specification and requirements.
1. Inspection and Test Plans (ITP)

Inspection and test plans identify inspection, surveillance, witness, documents

review and hold points in accordance with the guidelines of these documents. These
ITP documents shall be approved by Client if requires as per contract. If the ITP
already provided by Client, PP - EPC shall be fully understood and shall be clarified to
Client if it is not clear.

2. Inspection Testing
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Receiving inspection and testing Incoming material, fabricated item and equipment
will not be processed until it has been inspected or otherwise verified as conforming
to specified requirements.

a) In-process inspection, testing and surveillance.

The QC Personnel is responsible for ensuring the status of inspection and test of
construction activities is monitored and report of such inspection shall be verified
before proceeding with the remaining job. When sample inspection/ test are
conducted, each lot is clearly defined and traceability between representative
sample and items included in the lot is established.

3. Final Inspection & Testing

No processed item shall be dispatched until approval of final inspection has been
satisfactorily completed.

4. Control of Inspection, Measuring and testing Equipment (MTE)

QC Personnel shall ensure that equipment is appropriately calibrated, in good

condition and ready to use. All record of measuring and testing equipment including
calibration shall be record.

5. Inspection and Test Status

Inspection report result & summary data of its which will identified that the product
is verified and already comply with inspection and test requirement. The PM/ CM
shall be the person authorized to release the product for further processing to use or
install and shall be in consultation with QC Personnel.

6. Non-conformity

The QC Personnel responsible for ensuring non-conforming product is reported and

processed. And the report for ensuring records are prepared and maintained in
accordance with site quality control procedures.
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XII. Quality Records

All managers and supervisor should maintain the records pertinent to his department to
provide evidence of conformity to requirements. Records shall remain legible, readily
identifiable and retrievable. On completion of erection and start up, appropriate documents
shall be collected and passed to client as turn over package (TOP). Records required to be
turned over to client shall be defined at an early stage of the work by mutual agreement
between client and PP EPC. Records shall be made available to client upon request within
the retention period
XIII. Quality Audit

Internal quality audit will be conduct at minimum once per project. The schedule shall be
defined on proposed quality program on project or follow EPC division quality audit.

XIV. Attachment

The following attachments template forms shall be a part of these procedures.

1. Quality Management Organization Chart

2. Quality Management System Certificate ISO 9001 : 2008

3. Business Process Quality

4. Sample of Existing Inspection Report

Attachment 1. Quality Management Org. Chart

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Attachment 2. Quality Management System Certificate ISO 9001:2008

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Attachment 3. Business Process Quality

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Attachment 4. Inspection and Test Plan

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Attachment 4. Sample of Existing Inspection Report

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