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Mellitah Gas BV- CIMS Corporate Guidelines for Contractor/Supplier Feedback

Mellitah GAS BV LIBYAN BRANCH


Mellitah Gas B V

COMPANY INTEGRATED MANAGEMENT SYSTEM

CORPORAT E GUIDELINES FOR


CONTRACTOR/SUPPLIER FEEDBACK

MG-CIMS-G-020

Written By Reviewed By Endorsed By Approved By


Rev REASON FOR REVISION
and Date and Date and Date and Date

Issued for approval and


A3 A. Ganidi F. Vergani MC Members A. Amesh
Implementations
05/02/2008 05/02/2008
Legal/Material/
Revised as corporate document and
A2 A. Ganidi MC NA NA
issued for review and comments
16/01/2008
The document was issued to speed up MC
A1 the issues as it was urgently required by
Eni 31/12/2007

MG-CIMS-P-020 Rev A3 Page 1 of 13


Mellitah Gas BV- CIMS Corporate Guidelines for Contractor/Supplier Feedback

Table of Contents

1. Introduction

2. Scope

3. Terms and Definitions

4. Responsibility

4.1 Management Committee


4.2 Legal Department
4.3 Material Department
4.4 HSEQ Department
4.5 Prequalification Committee
4.6 End Users

5. Feedback Collection and Processing

5.1 Distribution of Feedback form

5.2 Feedback collection and Database

5.3 Calculation of the Contractor/Vendor/Suppliers Capability Profile

5.4 Evaluation of Feedback


5.4.1 Contractor/Vendor/Suppliers assessment
5.4.2 Quality Audit

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Mellitah Gas BV- CIMS Corporate Guidelines for Contractor/Supplier Feedback

6. Feedback Parameters/Scores
6.1 Does the supplier instrumentally use events to request changes in price or scope?
6.2 Compliance by supplier with the Company's needs during the contract management stage
6.3 Availability regarding requests against framework contracts
6.4 Compliance of delivery times set in the contract or subsequently agreed
6.5 Conformity during inspection of supplies and/or conformity of services
6.6 Conformity at worksites
6.7 Conformity during engineering
6.8 Conformity in the use of resources (Engineers/work-site assistants)
6.9 Inspection of Works – Quality
6.10 Inspection of works – Absence of variations during the works attributable to the
contractor
6.11 Inspection of works – Observation of Contract provisions
6.12 Observance of safety laws
6.13 Compliance with contract specifications
6.14 Compliance with contract safety specifications
6.15 Is the absence of long interruptions in the work ordered by the authorities for which the
supplier is responsible confirmed?
6.16 Compliance with sub-contracting practices
6.17 Is the absence of request for payment from sub-contractors confirmed?
6.18 Is the absence of administrative fines and/or criminal convictions
6.19 Conformity in the construction of the Goods
6.20 Suitability of documents provided during the contract management stage

7. Records

8. Referenced Documents

9. Attachment

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Mellitah Gas BV- CIMS Corporate Guidelines for Contractor/Supplier Feedback

1. Introduction

This document establishes the guidelines to be followed up by all End Users of


contractors/vendors/suppliers during the evaluation process of their performance and
shows how should be filled in the feedback form MG-CIMS-F-001 to 003. These forms
should be filled in by the respective departments taking into consideration each parameter
described and finally this should be approved by department manager; the criteria used to
assign the score is then illustrated in the section six (6) below.

The required feedback activities are divided into three categories:-


1- GOODS, such as ordered material and equipments.
2- SERVICES, such as manpower services and consultations
3- WORKS installations and construction activities

2. Scope

The scope of this document is intended to cover the evaluation process of


contractors/vendors/suppliers that are currently working or have provided the company
with GOODS/SERVICES/WORKS and make sure the appropriate feedback from End
Users to company MC about their performance. This evaluation shall be carried out
every six months in order to verify deviations or bad performance and whether they
are still qualified to provide the company with the required activities or a warning
letter shall be assigned to them or completely disqualify them.

3. Terms and Definitions

Mellitah Gas B.V Libyan Branch with its Head Quarters at Dat EL-Imad
Company Complex, Wafa Desert Plant, Mellitah Complex, Cross Country Pipe
Lines, Sabratha Platform and Sub-Sea Clusters.
End Users Are the Mellitah Gas BV Respective departments
CIMS Company Integrated Management System
QA/QC Quality Assurance / Quality Control
HSEQ Health, Safety, Environment, Quality & Security
QMS Quality Management System
MC Management Committee
NCR Non-Conformance Report
Non- A situation where the system, product or material does not meet the
Conformance applicable Codes, Specifications, Standards, ITP, Drawings, Project
Requirements or QMS

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Mellitah Gas BV- CIMS Corporate Guidelines for Contractor/Supplier Feedback

4. Responsibility

4.1 Management Committee


The Mellitah Gas BV MC consists of the MC Chairman and the three MC Members are
responsible for the overall management and implementation of this document.

They are also responsible for the approval and disqualifying of the
Contractors/Suppliers/Vendors based on the evaluations and recommendations from the
Prequalification committee and HSEQ department.

4.2 Legal Department


The Legal Manager is responsible for following up the Contractors’ performance by
sending the required forms to the respective departments (end users) and reviewing their
comments and submitting them to HSEQ department.

4.3 Material Department


The Material Manager is responsible for following up Suppliers/Vendors’ performance by
sending the required forms to the respective departments (end users) and reviewing their
comments and submitting to HSEQ department.

4.4 HSEQ Department


The HSEQ manager is responsible for ensuring the quality of the evaluation is performed
in accordance to section 6 below Feedback parameters/Scores. The HSEQ department
will recommend the prequalification committee what actions to be taken:-
1- Carry out an Assessment on the contractors/vendors/suppliers and clarify the
discrepancies highlighted in the evaluation form.
2- Perform a Quality Audit.

He also responsible for forwarding the final decisions which made by the
prequalification committee to the MC for approval.

4.5 Prequalification Committee


They are responsible for evaluating the contractors/vendors/suppliers based on the
recommendation received from HSEQ department. They are also responsible for
providing recommendation to HSEQ Manager to qualify or disqualify
Contractors/Suppliers/Vendors.

4.6 End Users


They are the respective departments which being provided with such activities by any
contractors/vendors/suppliers. The End User is responsible for controlling and monitoring
their performance in order to provide a feed back on the way they performed and
behaved during mentioned period.

5. Feedback Collection and Processing

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Mellitah Gas BV- CIMS Corporate Guidelines for Contractor/Supplier Feedback

5.1 Distribution of Feedback form

The MG-CIMS-F-001 to 003 will be distributed by the Material and Legal department
to End Users to be filled every six months for each specific
contractors/vendors/suppliers and also at the end of each contract/service taking into
consideration that the contract/service provided is valid for more than six months. The
department managers will fill or assign his personnel to complete the required forms.

5.2 Feedback collection

Every six months the end user will fill the required form for each
contractors/vendors/suppliers; however, some contractors/vendors/suppliers require
filling two or three forms. These forms will be, approved by the End User
Manager and sent back to the custodian (Legal or Material). The custodian
department will send the forms to HSEQ after approving them.

5.3 Calculation of the Contractor/Vendor/Supplier capability


The analysis of the forms will produce three indexes covering most important aspects
of Contractor/Vendor/Supplier performance:

· Behaviour
· Timeliness
· Quality

Each index is calculated applying the following formula:

S (Parameter weight * parameter score)


B/T /Q= * 20

S Parameter weights
The global performance of Contractor/Vendor/Supplier Capability Profile (SCP) is
then calculated by applying the following formula:

SCP = 0.3 * B + 0.4 * T + 0.4 * Q

The below table shall be used as comparisons for the index value the reference
values; however, if the index value is below the Reference Value, this indicates a
discrepancy in Contractor/Vendor/Supplier performance, which requires a
recommendations to be submitted by HSEQ to the Prequalification Committee for
further evaluation.

Referenc
Index
e Value

Behaviour 49
Timelines
49
s

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Mellitah Gas BV- CIMS Corporate Guidelines for Contractor/Supplier Feedback

Quality 59
SCP 59

In addition, to the above discrepancies the HSEQ could submit a recommendation to


the Prequalification Committee in the following cases:

· Notifications by competent Authorities or information available to the public


potentially dangerous for the image of the Company;
· Comments in the Feedback Forms such as stoppage of the services, huge
economical damages due to defects in construction, poor performance on
safety, fines for environmental problems etc;

5.4 Evaluation of Feedback

The prequalification committee will review the recommendations submitted by


HSEQ as follows:-

5.4.1 Contractors/vendors/suppliers assessment


The Prequalification committee will carry out an Assessment on the
contractors/vendors/suppliers based on the discrepancies highlighted in the
evaluation form. They will request the contractors/vendors/suppliers for a meeting
to clarify the points that were mentioned in the evaluation form from the end user.

The contractors/vendors/suppliers shall clarify and provide evidence that clearly


shows discrepancies are solved. The committee will decide what action from the
blow listed points will be taken:-
· No action is required due to the submitted evidence.
· Conduct an audit on the contractors/vendors/suppliers
· Provide the contractors/vendors/suppliers with written warring.
· If a warring was given before then the contractors/vendors/suppliers will be
disqualified

5.4.2 Quality Audit


If the prequalification committee is not convinced with the submitted
evidence they will inform the Contractors/Vendors/Suppliers that an audit shall
be conducted. Based on results of the audit report, action will be taken.

The audit team shall be formed form the custodian department (Legal and
Material, HSEQ, Prequalification committers and the End user. This team
will be led by the HSEQ department.

6. Feedback Parameters/Scores
The three forms (MG-CIMS-F-001 to 003) consist of 20 questions and some of them
associated with sub questions. Each form has a different set of questions but the below
subsections provide a guidance on how to score on all questions regardless the type of the
form (Goods/Services/Work).

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Mellitah Gas BV- CIMS Corporate Guidelines for Contractor/Supplier Feedback

6.1 Does the supplier instrumentally use events to request changes in price or scope?

5 – No;
4 – rarely;
3 – sometimes;
2 - often;
1 - Systematically.
6.2 Compliance by supplier with the Company's needs during the contract management
stage

5 – Excellent response and/or supplier make suggestions on how to solve problems;


4 – Satisfactory problem solving without the need for the Company to intervene;
3 –The supplier generally responds to the request but the Company occasionally has to
intervene;
2 – The supplier is not always able to meet the Company’s needs;
1 – The supplier is unable to solve problems.

6.3 Availability regarding requests against framework contracts

5 – The supplier is always able to provide the goods/services/work requested with high level
of quality, demonstrating excellent planning and control capacity of the
goods/services/work; no monitoring by the Company is required;
4 – The supplier is always able to provide the goods/services/work requested in a
satisfactory way; no monitoring by the Company is required;
3 – The supplier is always able to provide the goods/services/work requested in an
adequate way; a minor intervention by the Company is required;
2 – The supplier is very occasionally unable to provide the goods/service/work requested by
the Company as indicated in the framework contract in the times and/or at the cost
established; there are sometimes additional costs;
1 – The supplier is seriously in breach of the indications in the framework contract for the
supply of goods/services/works.

6.4 Compliance of delivery times set in the contract or subsequently agreed

5 – Proactive approach, demonstrating to have excellent control of planning and delivery; no


intervention by the Company;
4 – Completion according to the programme without the Company’s intervention;
3 – Completion within the deadline of most of the items to be supplied with limited
intervention by the Company;
2 – Delays in delivery of a considerable number of items to be supplied; Company has to
bear some intervention costs;
1 – Late delivery of most of the items to be supplied with the need for significant intervention
and ensuing higher costs and delays in the project as a whole.

6.5 Conformity during inspection of supplies and/or conformity of services

5 – Complete conformity, the functional parameters and specific requests are easily
achieved;
4– The functional parameters and specific requests are achieved with a minor intervention by
the Company’s technical office;

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Mellitah Gas BV- CIMS Corporate Guidelines for Contractor/Supplier Feedback

3– Functionalities achieved as requested, all important requisites (musts) are fulfilled, some
small but acceptable deviations from the standard requested;
2– Functionalities achieved with major modifications or repetition of the work or with the
acceptance of forced modifications;
1– Complete non-conformity during inspection with the requirements of the Company’s
technical specifications.

6.6 Conformity at worksites

If you want to assign a score of 3, 4 or 5 to the question, DO NOT fill in the sub-questions;
if the score to assign is less than 3, sub-questions a) b) c) must be answered by placing a
cross (x) where a non-conformity has been reported; this will result in the automatic
calculation of score 2 or 1. Values in numbers MUST NOT be used for the sub-questions.

5 – Complete conformity at the worksites, personnel and documentation available at the


worksite to fulfil any requests, equipment in excellent condition and always reliable; the
supplier is able to make suggestions to improve the work;
4 – Personnel and documentation available as requested, flexibility in responding to
unplanned requests, the supplier is able to satisfy the indications given by the Company;
3 – Small non-conformities which can be easily rectified.

d) Is the absence of major economic damage caused by construction and/or execution


defects confirmed?

YES – No economic damage;


NO – Presence of economic damage.

6.7 Conformity during engineering

If you want to assign a score of 3, 4 or 5 to the question, DO NOT fill in the sub-questions;
if the score to assign is less than 3, sub-questions a) b) c) must be answered by placing a
cross (x) where a non-conformity has been reported; this will result in the automatic
calculation of score 2 or 1. Values in numbers MUST NOT be used for the sub-questions.

5 – Highly specialised personnel with cutting edge tools, the supplier is able to develop the
project in a fully autonomous way and/or propose improvements;
4 – Autonomous personnel in the development of the project; the supplier is able to solve
problems;
3 – Adequate engineering systems and staff; needs Client supervisions.

6.8 Conformity in the use of resources (Engineers/work-site assistants)

If you want to assign a score of 3, 4 or 5 to the question, DO NOT fill in the sub-questions;
if the score to assign is less than 3, sub-questions a) b) c) must be answered by placing a
cross (x) where a non-conformity has been reported; this will result in the automatic
calculation of score 2 or 1. Values in numbers MUST NOT be used for the sub-questions.

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Mellitah Gas BV- CIMS Corporate Guidelines for Contractor/Supplier Feedback

5 – Personnel with excellent know-how and experience, number of dedicated resources


higher than requested (not to cover any shortcomings but to provide a better service to
the one offered contractually);
4 – Personnel with good know-how and experience for the key points of the project that,
however, needs a minimum level of supervision; number of resources used is
adequate;
3 – The personnel’s technical level does not entail risks for the Company; Company
supervision required; number of resources used is adequate.

6.9 Inspection of Works – Quality

a) Repair and/or completion works requested


5 – Excellent performance - specific requests are easily implemented
4 – Good performance, specific requests are implemented with a little intervention by the
Company’s technical office;
3 – Acceptable performance, all important request are fulfilled, some small but acceptable
deviations from the standard requested;
2 – Mediocre performance, requests implemented with major modifications or repetition of
the work or with the acceptance of forced modifications;
1 – Poor performance requests are implemented only with direct intervention of Company’s
technical office.

b) Suitability of resources used


5 – Excellent suitability of resources
4 – Good suitability of resources
3 – Acceptable suitability of resources
2 – Mediocre suitability of resources
1 – Poor suitability of resources

c) Compliance with work completion times


5 – Work completion times achieved in advance on time schedule
4 – Complete compliance with work time schedule
3 – Work completion substantially achieved as per work time schedule but with some minor
activity to be completed
2 – Work completion not achieved as per work time schedule, minimum delay
1 – Significant and long delay in work completion

d) Accounting compliant with the works performed

YES – Accounting compliant with the works performed


NO – No compliance of the accounting with the works performed

e) Is the absence of major economic damages caused by construction and/or execution


defects confirmed?

YES – Absence confirmed


NO – Presence of major economic damages

6.10 Inspection of works – Absence of variations during the works attributable to the
contractor

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Mellitah Gas BV- CIMS Corporate Guidelines for Contractor/Supplier Feedback

5 – No variations during the works, because of the high quality of Contractor


performance
4 – No variation during the works because of Company’s Technical Office intervention
3 – Some minor variations without impact on time work schedule
2 – Presence of significant variations effecting time schedule
1 – Large numbers of variations due to Contractor negligent and careless performance

6.11 Inspection of works – Observation of Contract provisions

a) Observation of Contract clauses


5 – The supplier autonomously complies with the Contract Provision
4 – The supplier complies with the Contract Provision with a limited intervention of Company
3 – The supplier complies with the Contract Provision with direct intervention and support of
Company
2 – The supplier appears reluctant or autonomously unable to comply with the Contract
Provision and must be continuously monitored;
1 – Serious non-fulfilment of Contract Provision.

b) Observance of labour laws


YES – No reports from competent Authority
NO – Presence of reports from competent Authority.

6.12 Observance of safety laws

a) Safety Performance – Accident/injury levels


5 – Excellent performance, the accident levels are significantly lower than those envisaged
in the industry, proactive control in identifying new initiatives to maintain performance
levels;
4 – Good performance, the accident levels are significantly lower than those envisaged in
the industry, good control of performance which is better thanks to the company’s
initiatives;
3 – Acceptable performance, the accident levels are in line with those envisaged in the
industry, use of performance control to identify possible improvements;
2 – Mediocre performance, the accident levels significantly exceed the levels envisaged in
the industry; some control of performance but no use of the data;
1 – Poor performance, the accident levels significantly exceed the levels envisaged in the
industry; no control of performance;

b) Control of sub-suppliers/contractors
5 – Proactive and continuous involvement with sub-suppliers/contractors in the control with
positive outcome of the effect that their actions could have on health and safety;
4 – Effective involvement with sub-suppliers/contractors to minimise the effect that their
actions could have on health and safety;
3 – Adequate control of the actions of sub-suppliers/contractors with a potentially high
impact on health and safety;
2 – Limited control of the effects on health and safety caused by the activities of sub-
suppliers/contractors;
1 – Minimum or no control of the effects on health and safety caused by the activities of
sub-suppliers/contractors.

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Mellitah Gas BV- CIMS Corporate Guidelines for Contractor/Supplier Feedback

c) Is the absence of reports to the authorities of serious breaches confirmed?


YES – No reports;
NO – Presence of reports.

6.13 Compliance with contract specifications

5 – The supplier proposes new initiatives to improve working conditions and reduce times
and/or costs;
4 – The suppliers autonomously comply with the specifications in the contract;
3 – The supplier complies with the specifications in the contract but occasional reminders are
needed by the Company;
2 – The supplier appears reluctant or autonomously unable to comply with the specifications
in the contract and must be continuously monitored;
1 – Serious non-fulfilment of contract specifications.

6.14 Compliance with contract safety specifications

5 –The supplier proposes new initiatives to improve HSE conditions; has an updating
programme for his personnel;
4 – The supplier autonomously complies with the HSE standards specified in the contract;
3 –The supplier complies with the HSE standards specified in the contract but occasional
reminders are needed by the Company;
2 – Some minimum breaches of HSE contractual standards for which continuous intervention
of the Company is necessary;
1 – Serious non-fulfilment of HSE contract specifications.

6.15 Is the absence of long interruptions in the work ordered by the authorities for which
the supplier is responsible confirmed?

YES – There have been no interruptions of work ordered by the authorities for which the
supplier is responsible;
No – There have been interruptions of work ordered by the authorities for which the supplier is
responsible.

6.16 Compliance with sub-contracting practices

YES – The supplier complies with sub-contracting practices;


NO – The supplier does not comply with sub-contracting practices.

6.17 Is the absence of request for payment from sub-contractors confirmed?

YES – No requests for payment have been received from sub-contractors;


NO – Requests have been received from sub-contractors.

6.18 Is the absence of administrative fines and/or criminal convictions regarding


environmental problems confirmed?

YES – No administrative fines or criminal convictions;


NO – Presence of administrative fines and/or criminal convictions.

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Mellitah Gas BV- CIMS Corporate Guidelines for Contractor/Supplier Feedback

6.19 Conformity in the construction of the Goods

If you want to assign a score of 3, 4 or 5 to the question, DO NOT fill in the sub-questions; if
the score to assign is less than 3 sub-questions a) b) c) must be answered by placing a
cross (x) where non-conformity has been reported; this will result in the automatic calculation
of score 2 or 1. Values in numbers MUST NOT be used for the sub-questions.

5 – Dedicated high level resources in terms of people and means, high level Quality Control
system which tends to eliminate risks of non-conformity;
4 – The goods comply with specific conditions, at times with the Company’s intervention;
3 – Small deviations from the technical specifications required for the goods to be accepted.

6.20 Suitability of documents provided during the contract management stage

5 – Documents presented in the set times, complete, error-free, easily consultable;


4– Documents presented in the set times, mostly complete, error-free, no significant
intervention by the Company is necessary;
3 – Documents presented in the set times, some small errors which are easy to correct;
2– Documents presented late, incomplete, errors that can be corrected by means of
significant intervention;
1 – Documents presented very late, mostly incomplete; complete re-working of the
documents is necessary for them to be accepted.

7. Records

All records will be kept in the Prequalification committee; however, the QMS
requires that each department is required to have its own records for future audits. It
is recommended that a database using computer application should be utilized in
order to monitor and follow-up the process.

8. Referenced Documents

· MG-CIMS-F-0001 Feedback form for Goods


· MG-CIMS-F-0002 Feedback form for Services
· MG-CIMS-F-0003 Feedback form for Works

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