Ref. No.: MMHE/ITB/SCM/20-REV0

CONTRACT

EXHIBIT 7

Page 1 of 5

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SUPPLIER QUALITY ASSURANCE REQUIREMENTS

TABLE OF CONTENT

ITEM / SUBJECT /

PAGE

1.0 / SCOPE / 2
2.0 / DEFINITIONS / 2
3.0 / REFERENCE DOCUMENTS / 2
4.0 / RESPONSIBILITIES / 2
5.0 / CODES AND STANDARDS / 2
6.0 / INSPECTION AUTHORITY ACTIVITIES / 3
7.0 / THIRD PARTY INSPECTION AND DESIGN REVIEW / 3
8.0 / MEASURING & TEST EQUIPMENT / 4
9.0 / WELD PROCEDURES / 4
10.0 / WELDERS AND WELDING OPERATORS / 4
11.0 / OPERATORS OF NON DESTRUCTIVE (NDT) EQUIPMENT / 5
APPENDIX 13 / NOTICE OF READINESS FOR INSPECTION (NOI)

1.0SCOPE

This document details the Quality Assurance requirements applicable to SUPPLIER for this project.

2.0DEFINITIONS

DOSH / Malaysian Department of Occupational Safety and Health.
Inspection Authority / MMHE’s Representative Appointed Inspector.
MMHE / Malaysia Marine and Heavy Engineering Sdn Bhd who issues the CONTRACT.
Third Party Inspection Authority / Independent Inspector authorized by DOSH.
SUPPLIERS / Any person or MMHE to whom the CONTRACT / Purchase Order is issued for the supply of WORKS.

3.0REFERENCE DOCUMENTS

ISO 9001:2008Quality Systems.

4.0RESPONSIBILITIES

The SUPPLIER is required to implement a Quality System appropriate for the goods, equipment or services supplied as follows.

-ISO 9001 for orders containing design work.

- applicable standards in same nature.

If the SUPPLIER proposes to work to a quality system standard other than this, it shall be clearly stated in his bid as prior approval is required to work to systems other than ISO 9001:2008.

The SUPPLIER is responsible for passing on these quality assurance requirements to the SUPPLIER’s subSUPPLIERs, as appropriate.

Each Inspection Authority reserves the right to request, review and maintain for the duration of the CONTRACT a copy of the SUPPLIER’s Quality Manual and also to perform audits to verify implementation of the Quality Manual.

5.0CODES AND STANDARDS

The latest applicable issue, edition or addenda of a Code or Standard shall be followed if it is not specified.

6.0INSPECTION AUTHORITY ACTIVITIES

6.1Each Inspection Authority reserves the right to visit the SUPPLIER, and their sub SUPPLIER’s worksite at all reasonable times to verify conformance and to the constant requirements of the PURCHASE ORDER. Project specifications and requirements will be discussed in a Pre-Inspection Meeting.

6.2 Where specific hold or witness points have been assigned, the SUPPLIER shall notify for the inspection as giving at least seven working days advance notice for items supplied from Malaysia and at least ten working days advance notice for items supply from overseas. The SUPPLIER shall also confirm within 24 hours prior to witnessing that operations are on schedule, or otherwise.

6.3Notice of Readiness for Inspections (NOI) and tests shall be made as per sample Exhibit 7 – Appendix 13.

6.4Whether or not inspection is performed by the Inspection Authority, the SUPPLIER is in no way absolved from responsibility for the quality of the goods supplied or from performing those inspections which need to be performed by the Inspection Authority.

7.0 THIRD PARTY INSPECTION AND DESIGN REVIEW

7.1“Third Party Inspection” is an independent body responsible for an independent review and approval of the design and fabrication of the equipment to ensure compliance with the specified requirements for design, fabrication and testing. This is a requirement by Department of Occupational Safety and Health (DOSH) Regulations.

7.2The SUPPLIER is responsible for obtaining the Third Party approval and shall bear all associated costs including those related to meet DOSH requirements. The SUPPLIER shall nominate a Third Party Inspectorate which shall be in accordance with the Inspection Authorities permitted by DOSH Regulations.

7.3 The activities listed below are those suggested as being appropriate for the Third Party to undertake. The SUPPLIER’s appointed Third Party Inspection Authority shall mark up the SUPPLIER’s Quality Control Plan with the actual inspection activities.

7.3.1 Design Appraisal

a.Review of the SUPPLIER’s Equipment drawings for compliance with Code requirements and any specified requirements of the CONTRACT which affect the mechanical integrity.

b.Verify and approve the SUPPLIER’s calculations to confirm thickness etc. shown on SUPPLIER’s drawings is in accordance with the Code requirements and any specified requirements of the CONTRACT which affect the mechanical Integrity.

c.Review SUPPLIER’s quality plans and identify hold, witness and review points to the SUPPLIER and MMHE/CONSULTANT.

7.3.2Inspection

a.Attend Pre-Inspection Meeting

b. Review Material Certification (at the SUPPLIER worksite) to ensure compliance with specified requirements and that the material is correctly identified against certification.

c.Review Heat Treatment and Stress Relieving Records where applicable.

d.Review weld procedures, procedure qualifications and verify welder’s qualifications.

e.Review NDE as considered necessary and verify NDE operator’s qualifications.

f.Verify roundness of shells, profile dimensions of formed heads and pulled bends and weld fit-ups and edge preparations.

g.Carry out visual examination of welds.

h.Verify roundness of shells and fit-ups after welding.

i.Review radiographs and NDE records.

j.Witness pressure testing.

k.Carry out internal and external examination.

l.Sign Release Note, Code Data Reports and SUPPLIER’s Certification Dossiers and stamp name-plates.

m.Complete “Certificate of Inspecting Authority” as required by the government of Malaysia Factories and Machinery (Steam Boiler and Unfired Pressure Vessel) Regulations, 1970.

[Notwithstanding, Code-registered (i.e. National Board for ASME VIII) Third Parties must perform inspection in accordance with the terms of its registration.]

8.0MEASURING & TEST EQUIPMENT

The SUPPLIER shall provide, control, calibrate and maintain inspection, measuring and test equipment suitable to demonstrate the conformance of material to the specified requirements. Equipment shall be used in a manner which ensures that the measurement uncertainty is known and consistent with the required measurement capability. The measurement and calibration system for this equipment shall meet the requirements of ISO 9001:2008, or an equivalent standard.

9.0WELD PROCEDURES

Weld procedure shall be qualified in accordance with the standard specified in the requisition. Where no standard has been specified the SUPPLIER shall propose a standard in his quotation for acceptance by MMHE. Where weld procedure is requested for review by MMHE, manufacturing activity by the SUPPLIER must not commence until a written acceptance has been received from MMHE.

10.0WELDERS AND WELDING OPERATORS

Welders and welding operators shall be qualified to the standard specified in the requisition. Where no standard has been specified, the SUPPLIER shall propose a standard in his quotation for acceptance by MMHE. Supporting evidence shall be made available to the Inspection Authorities for review at the place of work. Each welder shall possess a valid qualification certificate covering the weld procedure to be used.

11.0OPERATORS OF NON- DESTRUCTIVE TESTING (NDT) - EQUIPMENT

NDT operators shall be qualified to the standard specified in the Requisition. Where no standard has been specified NDT operators shall be qualified to a recognised national standard, e.g. ASNT-TC-1A, CSWIP and the SUPPLIER shall state his standard in his quotation for acceptance by MMHE.

NDT procedures shall identify the qualification standard and level appropriate to the specific test being carried out.

END OF SECTION