Subcontract requirements

Are subcontractors selected on the basis of their ability to meet subcontract requirements ... 

The standard requires the supplier to evaluate and select subcontractors on the basis of their ability to meet subcontract requirements, including the quality system and any specific quality assurance requirements. 

Prepare procedures for producing and maintaining subcontract requirements and letting tenders. 

Provide those responsible for the preparation of subcontracts requirements to approve them prior to issue to the subcontractor. 

Provide a means for changing subcontract requirements during the contract. 

To enable those who cannot directly conduct appropriate tests to understand necessary methodology so that they can successfully subcontract required evaluations to outside professional institutions. By doing so, it is expected that use of highly hazardous reactive chemicals can be decreased and reactive chemicals can be used under safer conditions. 

Flow-down provisions Terms and conditions which must be incorporated into a subcontract or purchase order to pass down obliga-tions/requirements imposed by the prime contract. These flow-down provisions will provide for certain protections, obligations, or requirements that will modify or add to any work agreement or purchase order terms and conditions. 

If you subcontract design, you must be able to demonstrate you have the appropriate capability to ensure your subcontractor meets the design control requirements of ISO/TS 16949. 

The standard requires the supplier to provide appropriate technical resources for tool and gage design, fabrication, and verification activities, establish a system for tooling management, and implement a system to tack and follow-up tooling management activities if any work is subcontracted. 

The contractual requirements are specified, including warranty, payment conditions, acceptance conditions, customer supplied material, financial liability, legal matters, penalties, subcontracting, licenses, and design rights. 

Acceptance criteria are the requirements which, if met, will deem the product acceptable. Every requirement should be stated in such a way that it can be verified. Characteristics should be specified in measurable terms with tolerances or min/max limits. These limits should be such that will ensure that all production versions will perform to the product specification and that such limits are well within the limits to which the design has been tested (see also Part 2 Chapter 2 under Identifying verification requirements). Where there are common standards for certain features, these may be contained in a standards manual. Where this method is used it is still necessary to reference the standards in the particular specifications to ensure that the producers are always given full instructions. Some organizations omit common standards from their specifications. This makes it difficult to specify different standards or to subcontract the manufacture of the product without handing over proprietary information. 

Prepare standard requirements for subcontracted design activities which specify the documentation requirements. 

The standard does not define what the specified requirements are in this case. Elsewhere in the standard the term seems to relate to customer requirements but when purchasing you may well not be passing on customer requirements to your supplier. In cases other than when truly subcontracting work, you will in all probability be deriving your own requirements. 

Notwithstanding the guidance given below under Evaluation and selection of subcontractors, this requirement does not relieve you of the responsibility for ensuring the quality of subcontracted parts, materials, and services. Therefore, it would be unwise to place orders on a customer-specified subcontractor without first going through your evaluation and selection process. You can obviously take some short cuts but don t make assumptions. The customer will not be sympathetic when you are late on delivery or your price escalates. If you find a subcontractor that can meet all your product/service requirements at a lower price you can submit details to your customer for approval. 

Prior to orders being placed the purchasing documents should be checked to verify that they are fit for their purpose. Again this requirement is appropriate to subcontracts but only if you submit your purchasing documents to your vendors. The extent to which you carry out this activity should be on the basis of risk and if you choose not to review and approve all purchasing documents, your procedures should provide the rationale for your decision. The standard does not require that the review and approval be documented. In some cases orders are produced using a computer and transmitted to the vendor directly without any evidence that the order has been reviewed or approved. The purchase order does not have to be the only purchasing document. If you enter pur-... 

It is important that you inform the subcontractor through the contract of how the product or service will be accepted. Will it be as a result of receipt inspection at the specified destination or as a result of acceptance tests witnessed on site by your authorized representative These details need to be specified at the tendering stage so that the subcontractor can make provision in the quotation to support any of your activities on site. If you have invoked ISO 9001 in the subcontract, you are protected by clause 4.6.4.2. If you have not, you need to specify a similar provision in your subcontract, otherwise you may lose the right to reject the product later. There is no requirement for you to document your proposal to verify product at the subcontractor s premises but such a plan would indeed be a useful section in any quality plan that you produced. (See also Control of subcontractors in this chapter.)... 

The standard requires that where specified in the contract the supplier s customer or his/her representative shall be afforded the right to verify at the subcontractor premises and the supplier s premises that subcontracted product conforms to specified requirements. 

Do provide a means of apportioning the requirements of the main contract to the subcontract. 

This requirement poses something of a dilemma when purchasing subcontract labor because it cannot be treated the same as product. You still need to ensure, however, that the labor conforms with your requirements before use. Such checks will include verification that the personnel provided have the requisite qualifications, skills, and knowledge and they are who they say they are. These checks can be made on the documentary evidence provided, such as certificates, but you will probably wish to monitor their performance because it is the effort you have purchased, not the people. You will not be able to verify whether they are entirely suitable until you have evaluated their performance. Subcontract labor could be classified as product released prior to verification being performed and so you need to keep records of the personnel and their performance during the tenure of the contract. 

The subcontractor records that are delivered to you should form part of your records. However, the controls you can exercise over your subcontractor s quality records are somewhat limited. You have a right to the records you have paid for but no more unless you invoke the requirements of this clause of the standard in your subcontract. Your rights will probably only extend to your subcontractor s records being made available for your inspection on their premises therefore you will not be able to take away copies. It is also likely that any subcontractor records you do receive are copies and not originals. Before placing the contract you will need to assess what records you will require to be delivered and what records the contractor should produce and retain. 

Quality control examinations shall include the requirements of the construction organization s Quality System Program for materials, products, components, workmanship, quality documents, procedures and personnel qualifications, construction, and subcontract services. 

EPC contracts requiring that construction is subcontracted on a lump sum competitive basis. This is the approach discussed in this section. 

This factor is to be applied only to the equipment listed in the estimate under the "Materials" column that requires minimum or no assembly by the regular construction forces. Equipment that requires field assembly by the vendor, such as large storage tanks, large boilers, materials handling systems, and other complicated packages, should be listed in the estimate under the "Subcontract" column. The cost includes both materials and field costs. 

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