[ RDMP RU-V BALIKPAPAN PROJECT ]

Subcontractor
SUBCONTRACT NO. : RDMP-H-SC-XX-XXX Logo

Special Conditions of Quality Management

Clause 1 Quality Management Organization

1) The Subcontractor shall establish and operate an organization dedicated to quality management
(in case of plant related work, at least one (1) person for every 50 laborers) befitting the size and
type of work subcontracted, and the work scope of such personnel shall specifically be limited to
quality management. Such personnel shall be experienced quality engineers or inspectors;
document controllers and IT system operators shall not be subject to such designation.

2) The person responsible for quality management of the Subcontractor shall have not less than
five (5) years experiences in work related to quality management of the relevant construction
work and shall be designated as such prior to commencement of the relevant construction work.

3) The quality management organization of the Subcontractor shall be subject to approval of the
Contractor. In the event the Contractor requests the removal and replacement of any quality
management organization personnel due to improper quality management, the Subcontractor
shall do so immediately, at its cost.

4) The quality management organization of the Subcontractor may be subject to management of

the quality management organization of the Contractor.

Clause 2 Assignment and Transfer of the Quality Management Task

The quality management task of the Subcontractor shall not be assigned and transferred to a third
party in part or whole under any circumstances.

Clause 3 Documents for Submission

The Subcontractor shall submit the following within thirty (30) days of the effective date of the
Subcontract:

1) Project Quality Plan (PQP)

2) Inspection and Test Plan (ITP) & Inspection Checklist

3) Quality Management Organization:

A. Organizational chart;

B. mobilization plan; and

C. resume of the quality management organization personnel

Clause 4 General

The Subcontractor shall secure satisfactory quality levels during the construction work by complying
with the quality standards defined below:

1) The Subcontractor shall ensure that the Quality Assurance (QA) and Quality Control (QC)
activities are implemented based on the PQP established and submitted to the Contractor. The
Contractor may conduct, at its discretion, quality audits in accordance with the PQP.
 [ RDMP RU-V BALIKPAPAN PROJECT ]
Subcontractor
SUBCONTRACT NO. : RDMP-H-SC-XX-XXX Logo

2) The Contractor shall have the right to comment at any time on quality management work
performed by the Subcontractor through the issuance of a nonconformance report (NCR) and/or
the corrective action report (CAR). If the Subcontractor is issued the NCR and/or CAR, the
Subcontractor shall submit to the Contractor a detailed remedial action plan within one week
from issue date of the NCR or CAR, and take remedial actions as soon as possible according to
the submitted plan. In case the CAR is issued, the root cause analysis of nonconformity and
measures to eliminate root cause shall be included in the remedial action plan.

3) The Subcontractor shall be responsible for the care and maintenance of all materials,
components, tools and equipment received from the Contractor at the same level of quality as
received, from the date in which the equipment/machines were handed over by the Contractor
until the date in which the subcontracted construction work is completed.

4) The Subcontractor shall supply materials for the works after obtaining the Contractor’s approval.

5) The Subcontractor shall use the latest and up to date engineering documents when performing
the works, and guarantee an older version is not being used.

6) The Codes & Standards applicable for the works shall be kept on site.

7) The Subcontractor shall secure personnel to maintain and utilize Contractor’s IT program, with
competent personnel deployed to ensure the smooth operation of the PICS/C-Space Program.

Clause 5 Quality Inspection and Payment for the Subcontractor

1) The Subcontractor shall carry out and complete its own inspection before requesting inspection
by the Contractor.

2) The Subcontractor shall secure and use measuring & test equipment (M&TE) for self-inspection
to be carried out within a valid calibration period.

3) The inspection and test reports (ITR) shall be submitted to the Contractor’s quality management
personnel, and the amount of payment for the performance of the Subcontract work shall be
calculated based on the submitted documents/reports approved by Contractor after completion of
inspection.

4) The Subcontractor shall submit documentary evidence to accurately and easily review
completion of inspection about items included in payment claim to the Contractor.

Clause 6 Quality Training

1) The Subcontractor shall establish annual training plan and submit approved plan to Contractor.
The Subcontractor ensure that all its Manager, Engineer, Supervisor, Laborer including those of
its Subcontractors are trained. The Subcontractor should train their personnel by using the
available Contractor and Subcontractor training materials.

2) The training record should include the name of those trained, course content, date and time. The
Subcontractor shall submit training record to Contractor on a monthly. The Contractor will
periodically review the Subcontractor’s training records to verify that training is being conducted.

3) All Subcontractor’s personnel shall receive quality induction training prior to job site mobilization.
Only personnel who had successfully completed quality induction training is allowed to carry out
associated work.

4) In cases where any work of Subcontractor is found to be deficient or training is requested by

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Subcontractor
SUBCONTRACT NO. : RDMP-H-SC-XX-XXX Logo

Contractor, Subcontractor shall conduct relevant training to prevent reoccurrence.

Clause 7 Compensation for Damages

Any amount incurred by the Contractor as a result of the Subcontractor’s failure to abide by the
clauses defined in this Special Conditions of Quality Management shall be payable by the
Subcontractor on demand or deductible from any amount due to the Subcontractor.

Clause 8 Priority of Application

In case there is any conflict between these Special Conditions of Quality Management with other
subcontract documents, the more restrictive conditions shall prevail.

Attachment #1. Quality Minimum Requirements For Subcontractors