PURCHASING STANDARD

GENERAL PURCHASING REQUIREMENTS FOR

API STORAGE TANKS MF40-1PS

DATE: 01 MAY 2003 ENGINEERING SERVICES BY KBR TECHNICAL SERVICES, INC. PAGE 1 OF 5

TABLE OF CONTENTS

Section Title Page No.

1. GENERAL ......................................................................................................................................1
1.1 Scope..............................................................................................................................................1
1.2 Data Furnished by the Purchaser ...................................................................................................1
2. QUOTATIONS BY BIDDER ...........................................................................................................1
2.1 Required Base Quotation................................................................................................................1
2.2 Alternate Quotations .......................................................................................................................2
2.3 Quotation Requirements .................................................................................................................2
2.4 Purchaser's Approval ......................................................................................................................3
3. SELLER'S RESPONSIBILITY .......................................................................................................3
3.1 General ...........................................................................................................................................3
3.2 Quality Control ................................................................................................................................3
3.3 Documents to be Submitted by the Seller.......................................................................................3
3.4 Documents to be Retained by the Seller ........................................................................................3
4. INSPECTION AND REJECTION BY PURCHASER......................................................................4
4.1 General ...........................................................................................................................................4
5. DEFINITIONS .................................................................................................................................4
5.1 General ...........................................................................................................................................4
5.2 Material Record Definitions.............................................................................................................5

1. GENERAL

1.1 Scope

This standard covers purchasing requirements related to bidding, documentation, quality control, and
inspection of API storage tanks.

1.2 Data Furnished by the Purchaser

1.2.1 Project-specific requirements and instructions are contained in other documents in the Order.
Except where requirements conflict, these project instructions shall be complied with in the following
sequence:

a. Purchase order
b. The Requisition sheets
c. Tank drawings or data sheets
d. Specifications and Standards attached to requisition
e. Referenced industry standards.

1.2.2 The Seller shall refer all conflicting requirements contained in the Order to the Purchaser, in writing,
for clarification and resolution before proceeding with the manufacture or procurement of the affected part.
The Seller is not at liberty to assume which instruction shall govern.
2. QUOTATIONS BY BIDDER
2.1 Required Base Quotation

2.1.1 The Bidder shall submit a base quotation in complete compliance with the Inquiry. Failure to submit
a base quotation in complete compliance with the Inquiry may result in rejection of the bid.
 PURCHASING STANDARD
GENERAL PURCHASING REQUIREMENTS FOR
API STORAGE TANKS MF40-1PS

DATE: 01 MAY 2003 ENGINEERING SERVICES BY KBR TECHNICAL SERVICES, INC. PAGE 2 OF 5

2.1.2 The following statement shall appear on the first page of the base quotation:

THIS QUOTATION IS IN COMPLETE COMPLIANCE WITH THE INQUIRY.

2.2 Alternate Quotations

2.2.1 In addition to the base quotation, the Bidder may submit alternate quotations which take exception to or
deviate from the requirements of the Inquiry.

2.2.2 The following statement shall appear on the first page of the alternate quotation, and all deviations,
exceptions, and substitutions to the Inquiry shall be listed or indexed immediately thereafter:

THIS ALTERNATE QUOTATION IS IN COMPLIANCE WITH THE INQUIRY EXCEPT

FOR THE FOLLOWING EXCEPTIONS, DEVIATIONS, AND SUBSTITUTIONS:

2.3 Quotation Requirements

2.3.1 The quotation shall state that transmittal dates for documents required to be submitted to the Purchaser
will be in accordance with the requirements of the Inquiry.

2.3.2 The scope of work shall be as outlined in the Inquiry, but generally the quotation shall include the cost of
providing design, detail drawings, documentation, material supply, transportation, shop and field
fabrication/labor, construction tools, equipment, supplies, power, and facilities, etc. necessary to perform all
work, examination, inspection, and testing.

2.3.3 Quotations on tanks required to be designed or manufactured to meet codes or governmental rules or
regulations shall include the cost of the required inspections.

2.3.4 The Bidder shall be responsible for complying with the mandatory requirements of all codes, regulations,
ordinances, and statutes of municipal, provincial, state, and national bodies having jurisdiction at the location
where the tank is to be installed.

2.3.5 If the Bidder's operational warranty or guarantee requires the presence of his start-up supervisor or
witness to accept any operating test, the cost for these services shall be included in the base quotation and not
quoted separately.

2.3.6 When noted in the Inquiry, the Bidder shall quote separately the cost of furnishing the services of qualified
personnel to assist during start-up and initial operation, and to witness and accept any operating test. The
Purchaser reserves the right to reject such services.

2.3.7 The quotation shall include unit prices for additions and deletions of roof or shell nozzles (NPS 1 through
NPS 24) and roof or shell manways and any other attachments as may be indicated in the Inquiry.

2.3.8 For purposes of the quotation, the Bidder shall assume that the Purchaser will furnish the following:

a. Tank foundations

b. Water for testing purposes within 200 feet (60 meters) of a tank or group of tanks. Assume pumping of test
water is required to fill the tanks. (Any heating or pumping of the test water is the responsibility of the tank
manufacturer. Test water shall be reused to the maximum extent possible for testing adjacent tank.)

c. Anchor bolts or straps, when required, embedded in the foundation in accordance with the tank
manufacturer's requirements. Anchor bolts will be furnished and installed by the Purchaser; anchor straps
shall be furnished by the tank manufacturer for installation by the Purchaser.
 PURCHASING STANDARD
GENERAL PURCHASING REQUIREMENTS FOR
API STORAGE TANKS MF40-1PS

DATE: 01 MAY 2003 ENGINEERING SERVICES BY KBR TECHNICAL SERVICES, INC. PAGE 3 OF 5

2.4 Purchaser's Approval

2.4.1 Upon issuance of a Purchase Order (Subcontract), the successful Bidder becomes the Seller
(manufacturer), and will be so notified by the Purchaser.

2.4.2 The Bidder shall obtain written approval from the Purchaser before any work is performed or procurement
action initiated relative to the base or alternate quotation.

3. SELLER'S RESPONSIBILITY

3.1 General

3.1.1 The Seller shall assume responsibility for designing and fabricating the tank to perform in accordance with
the specified design conditions as indicated in the Order.

3.1.2 The Seller's responsibility for complete compliance with the specified design requirements shall not be
relieved, in whole or in part, by anything contained in the Order.

3.2 Quality Control

The Seller shall have as part of his usual business practice an established, routine, and documented quality
control program. When requested, the Seller shall submit his quality control program to the Purchaser for review
and acceptance.

3.3 Documents to be Submitted by the Seller

3.3.1 The Seller shall submit the drawings and data of the type and quantity specified on the Supplier Data
Requirements form (SDR-2MF).

3.3.2 All drawings and data shall be sent to the address shown in the Order.

3.3.3 When required on the SDR-2MF form, Welding Procedure Specifications (WPSs), Procedure Qualification
Records (PQRs), and weld maps shall be submitted to the Purchaser for review prior to the start of fabrication.

3.4 Documents to be Retained by the Seller

3.4.1 All records to be retained by the Seller shall be available for examination by the Purchaser or the
Purchaser's representative at the time and place of inspection.

3.4.2 The following records are required and shall be retained by the manufacturer for a period of five years after
the item is completed. They shall be submitted to the Purchaser when specified in the Order. This submittal
may be for the Purchaser's records only, or for review and acceptance by the Purchaser as noted on the Supplier
Drawing and Data Requirements form.

a. WPSs, PQRs, weld maps, welder and welding operator qualification test results

b. Procedure Specifications, Procedure Qualification Records, and Operator Qualification Records for all
applied nondestructive testing

c. Certificates stating the results of all required nondestructive testing

d. Pyrometer charts or other detailed records for all heat treatment performed, such as postweld, normalizing,
and heating for forming
 PURCHASING STANDARD
GENERAL PURCHASING REQUIREMENTS FOR
API STORAGE TANKS MF40-1PS

DATE: 01 MAY 2003 ENGINEERING SERVICES BY KBR TECHNICAL SERVICES, INC. PAGE 4 OF 5

e. Charts or other records of required hydrostatic, pneumatic, or other tests. Test logs shall include the test
date, testing fluid, duration of the test, temperature of the test fluid, test water height, gauge pressure (if
any), a traceable identifying number such as a shop order number and equipment item number, and the
signature of the manufacturer's inspector witnessing the test.

f. Certified Material Test Reports or Certificates of Compliance which fully identify the specific materials they
represent.

1. Material Test Reports are required as follows:

i. when required by the applicable code or material specification

ii. for all impact tested materials (impact test results must be included)

iii. for all roof, shell, bottom, and annular plates

iv. for all non-impact tested pipe, fittings, valves, and flanges that are not made and marked in
accordance with an acceptable industry standard (such as ASME).

2. Certificates of Compliance are permitted in lieu of Material Test Reports as follows:

i. for bolting material and pressure and non pressure part material acquired from stock for which
Material Test Reports are not obtainable, except when certification in lieu of Material Test Reports
is not permitted by Subparagraph 1 above.

ii. for all non-impact tested pipe, fittings, valves, and flanges that are made and marked in
accordance with an acceptable industry standard (such as ASME).

3.4.3 Radiographic film shall be retained by the manufacturer as required by the applicable code and made
available for review by the Purchaser or a designated third-party inspector.

4. INSPECTION AND REJECTION BY PURCHASER

4.1 General

4.1.1 All tank fabrication is subject to inspection and rejection by the Purchaser in accordance with the
requirements of the Order.

4.1.2 Items not in accordance with the original Inquiry may be rejected after award if the Seller did not submit a
proper base quotation or if all deviations were not properly indicated in accordance with Article 2.2.

5. DEFINITIONS

5.1 General

5.1.1 "Inquiry" is defined as the package provided to the Bidder, which includes:

a. The actual Inquiry

b. Terms and Conditions
c. The Requisition
d. All included documents, such as Specifications, Standards, drawings, and data sheets
e. All referenced documents, such as industry codes and standards which are not included in the package.
 PURCHASING STANDARD
GENERAL PURCHASING REQUIREMENTS FOR
API STORAGE TANKS MF40-1PS

DATE: 01 MAY 2003 ENGINEERING SERVICES BY KBR TECHNICAL SERVICES, INC. PAGE 5 OF 5

5.1.2 "Requisition" is defined as the requisition sheet and all attached and referenced documents.

5.1.3 "Order" is defined as the package provided to the Seller, and includes the actual Purchaser Order
(Subcontract) and all included and referenced documents noted in Subparagraphs 5.1.1 b through 5.1.1 e.

5.1.4 "Purchaser" includes any KBR office or the Purchaser-of-Record noted in the Order.

5.2 Material Record Definitions

5.2.1 "Material Test Report" (also known as "Mill Test Report" or "Test Report") is a document certified by an
authorized agent of the material manufacturer on which the results of tests required by the basic material
specification are recorded. In addition to the test results, the document shall also:

a. Identify the material represented and the applicable material specification, including year of issue

b. Show the heat, lot, or melt identification number

c. State the type of heat treatment, if any

d. State results of tests, including chemical analyses, mechanical tests, and nondestructive tests, required by
the basic material specification

e. Include on or with the Material Test Report any supplementary or special requirements of the material
specification or the Order

f. Be certified and signed by an authorized agent of the material manufacturer who can attest to the
authenticity of the report and the data contained therein.

5.2.2 "Certificate of Compliance" (also known as "Certificate" or a "Certification") is a document by which the
material manufacturer (or Seller to the extent that the applicable construction Code allows) certifies that the
material represented has been produced and tested in accordance with the requirements of the basic material
specification shown on the certificate. Objective evidence of compliance with the requirements of the material
specification shall be maintained in the records of the material manufacturer. However, certificates of
compliance shall include reports or results of tests required by the material specification or the Order.