SHELL RESTRICTED

Project Management Discipline Guide

Inspection Strategy Framework for Projects

Project Guide 13c

Document History

Date Issue Reason for change Author/ Verifiers Approver

Contributor
May 2013 A Original Document Simon Marsh / Greg Arnold / Mark Ravenscroft Nick Smallwood
Neil McQuinn /
Pete Powery
July 2013 B Document reference in Michele Reed Greg Arnold / Mark Ravenscroft Nick Smallwood
Section 2.0 and word
corrections in Section 4
and 10.

The approved copy of this document is held in iPMS by the PTP-G group. All paper copies are
uncontrolled. Not subject to EAR – No transfer of Technology

Table of contents
Project Guide 08g Selection of Standards & Specifications Value Improving Practice

0. Purpose 1
1. Expectations, Guiding Principles and Quality Challenges 3
1.1. Expectations 3
1.2. Guiding Principles 4
1.3. Quality Challenges 5
2. Initial Engineering Criticality Assessment (ECA) 7
3. Basic Inspection Plan 8
4. Resource Allocation Based on Inspection Requirements 10
5. Initial Scope Discussion with Inspection Service Providers 11
6. Selection of Inspection Service Provider 12
7. Equipment/Package Kick-off Meeting 13
8. Engineering Quality Risk Sheet (EQRS) Development 14
8.1. EQRS development process 14
8.2. EQRS Topics 15
8.2.1. Assessment Categories on EQRS 15
8.2.2. Residual Technical Risks on EQRS 15
8.2.3. Shell Project Team Monitoring Plan on EQRS 16
8.2.4. Overall Risk Mitigation plan 16
8.2.5. Conclusion 16
8.3. EQRS Assurance Meeting 16
9. Inspection and Test Plan (ITP) Update 18
10. Inspector Selection 19
10.1. Induction Programme 19
10.2. Inspector performance 20
11. Pre-Inspection Meeting 21
12. Execute ITP 22
13. Inspection Reporting 24
14. Equipment Acceptance 26
15. Inspection Release Note (IRN) 27
Appendix 1. SIPOC Overview of Inspection Strategy Framework 28
Appendix 2. SIPOC Overview of Inspection Service Provision 29
Appendix 3. Flowchart showing interlinks with overall procurement activities 30
Appendix 4. Engineering Quality Risk Sheet (EQRS) template 31
Appendix 5. Pre-Inspection Meeting (PIM) Agenda 32
Appendix 6. Source Inspector Responsibilities template 33

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 Restricted

0. Purpose
In accordance with Shell Project Standard PS13 and Shell Project Guide 13a – Capital
Project Quality Management, quality planning shall commence as early as possible,
preferably during the Identify and Assess phase, and be continually updated until final project
delivery and hand-over to the Asset. The primary output of this process is the Project Quality
Plan (PQP) which is a mandatory deliverable for all projects. The PQP shall indicate how the
required quality activities shall be performed either directly, or by reference to appropriate
organisation, documented processes, procedures or other documents (e.g. project plan, work
instruction, checklist, etc).
In the PQP, an appropriate level of quality monitoring and surveillance of the various
activities shall be described based on project CAPEX and risks.
The extent of involvement by a Capital Project Team will be influenced by the contract
strategy and whether Shell is to provide furnished items (equipment and materials). The
PQP shall define the level of quality monitoring and surveillance based on capital exposure
and risks. This shall be based on criticality assessment and with involvement of contractors
and suppliers as appropriate.
The PQP may be supported by lower tier quality plans, procedures and/or work instructions
specific to discrete aspects of the project, such as the development of a specific Inspection
Strategy for the project.
A specific project Inspection Strategy is required to be developed in the Define phase such
that appropriate budgets can be allocated for the Execute phase (and for long-lead items if
already started to be procured in Define) to provide a timely and adequate level of hands-on
quality assurance to procurement, fabrication and construction activities on behalf of the
Shell Project Team

This Project Guide provides the basis for the development of an Inspection Strategy for a
project and is primarily to be used by Shell Project Teams.
The LEAN methodology has been applied to the overall process steps presented in this
document, and these overall process steps are also presented using the Supplier-Input-
Process-Output-Customer (SIPOC) approach.

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SIPOC flowchart for the Inspection Strategy Framework

INSPECTION STRATEGY FRAMEWORK

Section 1 Section 2 Section 4
Section 3
Expectations and guiding Initial Criticality Assessment Resource Allocation Based
Basic Inspection Plan
principles/Quality Challenges ECA on Inspection Requirements

Section 5 Section 6 Section 7 Section 8

Initial Scope Discussion with Selection of Inspection
Kick-Off Meeting Development
Inspection Service Providers Service Provider

Section 9 Section 10 Seection 11 Section 12

ITP Update Inspector Selection Pre-Inspection Meeting Execute ITP

Section 15
Section 13 Section 14
Inspection Release Note
Inspection Reporting Acceptance
(IRN)

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1. Expectations, Guiding Principles and Quality Challenges
The Project Inspection Strategy needs to strike a balance between the activities of the
various entities involved in equipment procurement, such as the EPC Contractor and any
relevant authority notified bodies. It shall not be the intent of the Shell Project Team to
duplicate inspection activities that are performed by those parties, but to provide assurance
that these parties are delivering as promised. The procurement and subsequent inspection
approach by the Contractor may differ between project work streams, and may even be sub-
divided for work streams into procurement and construction phases, and as such the quality
assurance inspection approach for Shell will need to be adapted to these potential
differences. The work stream Contractor has the responsibility to provide sufficient quality
control to ensure that the Project scope is delivered conforming to the specified
requirements, and do so in a fully transparent way.

Robust and effective methods shall be established to assess, monitor and control
contractors, sub-contractors, equipment vendors and service providers at a very early stage
in the project life. The focus shall be determined by the quality risks to the project and
measures established to ensure effective delivery of all products, services and materials.
Key quality inputs to contracting and procurement activities shall include:
 Contractor quality appraisal and evaluation
 Utilising, where possible, established Shell quality contract language templates/model
tailored to the risks of the contracted and supplied services and quality risks
associated with the specific scope of work.
 Contract language stating many requirements including and not limited to: quality
intervention levels, traceability, auditing, reporting, non-conformance approvals,
competency, Flawless Project Delivery (FPD) requirements, Technical Integrity
Verification (TIV), and Shell approvals.
 Conducting a criticality assessment of equipment to determine equipment intervention
levels required
 Monitoring of supplier sub-contractors
 Quality review of contracts and critical purchase orders
 Implementation of Technically Accepted Manufacturers and Products (TAMAP)
listing.
o Ensure Selection from and feedback provided to TAMAP listing, or
o How to manage the potential use of non approved suppliers by Shell, Joint
Ventures or contractors by applying equivalent principles to non-listed
vendors, including use of the Fast-Track process under TAMAP

1.1. Expectations
In the Project-specific Inspection Strategy, the Project’s expectations shall be defined and
recorded.
The Project’s overarching inspection quality expectation shall be set out in line with the
Project Quality Policy. The expectation, in terms of inspection, is to oversee the Contractor
and ensure that a product is delivered that conforms to the specified requirements. Group
Quality practices and procedures shall be followed; this includes the application of the
Enterprise Framework Agreement (EFA) for Inspection Services. Where Project venture

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structure does not commercially allow, inspection activities carried out in a similar manner to
meet the intent of the requirements of the EFA for Inspection Services.
Shell will ensure technical integrity verification throughout the lifecycle by defining clear
inspection and test requirements and including learning’s from other Projects and Assets.
This will enable the right level of surveillance and inspection at the right time for equipment,
materials and services, thereby demonstrating robustness and integrity for the Project.

1.2. Guiding Principles

The Project’s Guiding Principles on inspection shall be defined and recorded in the Project-
specific Inspection Strategy. The Guiding Principles shall as a minimum contain the
following ‘ways of working’ for the fulfilment of the Project expectations:
 Use a risk-based approach;
 Have a hands-on (5% minimum) and eyes-on when and where needed;
 Work together with the Engineering Contractor;
 Take no, nor accept any, short-cuts in quality;
 Find the ‘devil in the detail’ to determine conformance;
 Use Shell market intelligence and learning’s from other projects and vendor
assessments;
 Inspection process shall be capable of being implemented consistently across all
regions;
 Shall be more than a paperwork exercise.

An inspection strategy will therefore revolve around four key elements:

Drive quality interventions by assessment of criticality and risk

 Assess risk and criticality of equipment and services on a continuous basis (pre/post
PO-award)
 Address cross-work stream oversight and equipment interconnectivity (interface
management)
 Address risks to include life-cycle aspects as well as fabrication/construction
 Allow a tailored approach to quality interventions depending on work stream
arrangements

Utilise competent and committed inspection resources effectively

 Implement the Inspection Services EFA or for joint ventures where EFAs cannot be
used an equivalent commercial arrangement that delivers the same quality and
expectations on inspectors
 Avoid repeating routine inspections that will be performed by the Contractors and
Notified Bodies
 Perform a 5% minimum hands-on verification of work scope
(manufacture/construction)

Embed Shell driven experiences

 Incorporate Flawless, Lessons Learned from past Shell projects and global quality
incident learning’s

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  Verify DEM-1 process safety requirement compliance, as instructed by the relevant
Technical Authorities
 Focus on identification of rogue and counterfeit items
 Pay close attention to novelty and complexity of items, watch new materials for
casting and weldability
 Pay close attention to non-TAMAP approved (sub-)vendors
 Ensure suppliers are held accountable for effective preservation of equipment

Engage relevant stakeholders

 Actively involve Project Engineers and Discipline Engineers in quality process
 Provide complete and easily accessible information to inspection resources
 Promote close communication between Engineers and inspection resources
 Corroborate the message from the Shell Project Team management to the shop-floor

1.3. Quality Challenges

In the Project-specific Inspection Strategy, there should be an evaluation and listing of the
quality challenges and issues that the Project may be faced with. This may include items
such as:
 Quality of Invitations To Tender (ITT)
 Supply chain issues
o Contractor cascade of project specific requirements
o Weaknesses of vendor/sub-vendor quality assurance, inspection and testing
capability
o Dilution and weakening of control at sub sub-vendors
 Vendor issues
o Lack of confidence in known vendor capabilities (i.e. past performance does
not always equal present capability)
o Robustness of vendor Inspection and Test Plans (ITP)
o Novelty items and step-outs from existing product capability
o Lack of vendor awareness with duty and end service of
product/material/equipment
o Vendor own quality control skills and knowledge
 Understanding of the notified body’s deliverables, if applicable, in terms of
classification and certification
 Completeness of deliverables
 Rogue and counterfeit items.

The objective of the Project-specific Inspection Strategy is to address these challenges by

keeping them central to the Engineering Quality risk assessment processes described in
Sections 2 and 8 of this Project Guide. The risks are mitigated by an effective implementation
of the Inspection Services EFA or for joint ventures where EFAs cannot be used an
equivalent commercial arrangement that delivers the same quality and expectations of
inspectors.

Contracting risks and opportunities for inspection shall be summarised in the Project-specific
Inspection Strategy. Such risks and opportunities may include the following:

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 Table 1: Example Risk and Opportunity table
Risk Opportunity

 Shortage of competent skilled personnel  Early engagement of

– operating in worldwide locations Stakeholders and
 Potential poor performance from the understanding of inspection
contractors and inspection resources requirements
 Significant failures due to poor or lack of  Incorporate lessons learned
inspection from Shell global inspection
 Failure to understand and implement “In practices
Country” requirements  Long term repeatable inspection
 Ineffectiveness of Contractor quality activities on future work
systems – over and/or under inspection  Using the inspection capabilities
 Ineffective communication of the regions including
 Inadequate Shell verification and experiences gained in other
recording of inspection and testing Projects
 Failure to recognise lessons learned for  Local content use and
other Projects development

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2. Initial Engineering Criticality Assessment (ECA)
Document PTE-QIPS-TP-006 “Equipment Criticality and Intervention Assessment” evaluates
the criticality of procured equipment and commodities. The application of this procedure in a
project shall be defined in the Project Quality Plan and captured as a step in the Inspection
Strategy.
Commodities are included in the assessment because:
1) they are typically purchased in large quantities,
2) an impact on the project could lead to delays in sourcing;
3) there may be a direct economic cost of the bulk re-order or repair of commodities in a
single purchase order (PO);
4) most projects do not perform criticality assessments on commodities;
5) may only witness the final acceptance test,
6) a significant proportion of detected problems with quality have been found on
commodities.
This procedure is applicable either if the procurement is done directly by Shell or by its
FEED/EPC Contractor(s). Refer to PTE-QIPS-TP-006 “Equipment Criticality and Intervention
Assessment” for more details.

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3. Basic Inspection Plan
Generic inspection and test plans (ITPs) for each package shall be prepared by the entity
procuring the equipment (e.g. Contractor) for each package as part of the invitation to bid.
The relevant levels of inspection, expected Hold, Witness, Monitoring and Review Points will
be identified.
The Contractors and Certifying Authority, if applicable, will be focussed on classic inspection
activities and quality control whilst the Project’s intervention shall focus on Shell-driven
experiences and processes, and assurance of Contractor’s performance.

The Project shall base the inspection approach on the same criticality levels as the
Contractor, and shall participate in selected Pre-Inspection Meetings (PIM), in-process
inspections, factory acceptance tests and final inspection of the critical equipment.

The table below shows an example overall inspection/intervention scheme for Contractors,
Certifying Authority and the Shell Project Team:

Contractor
Criticality Activities
- Attend PIM
- Witness / Hold in-process
inspections per the agreed ITP
A – Resident Inspector
- Attend FAT
- Final Inspection
-Attend PIM
- Witness / Hold in-process
inspections per the agreed ITP
B - Surveillance or in-progress
inspection
- Attend FAT
- Final Inspection
- Attend PIM (option)
- Surveillance or in-progress
C inspection- Attend FAT
- Final Inspection
- Final Inspection
D
- Review Final Document
Certifying Authority
Shell Project Team (Classification & Certification)
Category Activities
- Attend PIM - Design Appraisal
- Attend FAT - Attend selected inspection
- Attend Final Inspection as per the agreed Inspection
and Test Plan
- Monitoring (Level of Intervention for in- IA
process inspection is based on risk and
criticality as per initial ECA.)
Focus areas:
- Attend selected inspection
- Shell Driven Process and learning as per the agreed Inspection
- Lessons Learned from other projects and Test Plan
- FPD (Flaws) IB
- Step out expertise (Novelties)
- Counterfeit Items
- Market Intelligence
- Minimum 5% Hands-on verification - Review Final Document
II

The output of the initial criticality assessment and the equipment list, are the inputs to the
basic inspection plan for the Project.

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The table below shows an example of the Project’s level of inspection and intervention for
procurement activities, based on the initial criticality assessment.
Inspection Proposed
Criticality Level Activities for Shell Project Team (Note 2, 3) Intervention Inspection Parties
(Note 1) Level (%)
Pre-Inspection Meeting 100
In-Process Inspection(Monitoring 5% min/Witness/
Hold point per the approved Inspection and test EFA Inspector,
75 (note 4)
A 1 plan), assurance of Contractors’ Inspection Engineer / CSU
performance (audits, review of reports) Support
Factory Acceptance Test 100
Final Inspection 100
Pre-Inspection Meeting 100
In-Process Inspection(Monitoring 5% min/Witness/
Hold point per the approved Inspection and test EFA Inspector,
50 (note 4)
B 2 plan), assurance of Contractors’ Inspection Engineer / CSU
performance support
Factory Acceptance Test 100
Final Inspection 100
Pre-Inspection Meeting
In-Process Inspection(Monitoring 5 % min/Witness/
Hold point per the approved Inspection and test EFA Inspector,
C 3 plan), assurance of Contractors’ Inspection 25 Engineer / CSU
performance support
Factory Acceptance Test
Final Inspection
D
4 Final Inspection 5 EFA Inspector
(Equipment)
Spot checking (i.e. first, second, and last two
D (Bulks and
4 shipment, 5% min), assurance of Contractors’ 5 EFA Inspector
commodities)
Inspection performance
Note 1: Intervention level can be changed as a result of risk assessment.
Note 2: Level of detail intervention will be marked on supplier ITP.
Note 3: Some of inspection activities may be duplicated with Contractor and Certifying Authority.
Note 4: Including sub-suppliers.

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4. Resource Allocation Based on Inspection Requirements
The basic inspection plan will allow the determination of an inspection and intervention
budget for the Project.
The Enterprise Framework Agreement (EFA) for Inspection Services shall be used where
possible.
During the Define phase of the project, the vendor selection process will be incomplete, A
degree of uncertainly will exist (actual hourly rates, travel burden, increased intervention
requirements, etc) and will need to be built into the cost estimate for procurement activities
and request for resource allocation. Long-lead items will have been ordered and inspection
costs can be calculated.
There would also be value in benchmarking the resource allocation against similar projects.

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5. Initial Scope Discussion with Inspection Service Providers
The Enterprise Framework Agreement (EFA) for Inspection Services will be used wherever
possible. Key to the overall success of obtaining successful provision of Inspection Services
is the early engagement (Define phase) with the potential Inspection Service Providers.
Projects shall share demand forecast data and discuss project requirements with the
relevant Inspection Service Providers.
A select number of the Inspection Service Providers shall be invited for separate initial scope
discussions, with support from the Regional or Global Technical Focal Point for Inspection
Services and Category Manager. The Project Quality Lead shall chair this meeting, and
selected members of their team and the relevant Project C&P staff shall attend. Any relevant
discipline, package or lead engineers may also be included.
Due to anti-competition/anti-trust legislation, it is imperative that the Inspection
Service Providers are not invited to a single meeting together where technical work
scopes or commercial arrangements are discussed.
General non-disclosure agreements (NDAs) are already in place with the EFA Inspection
Services Providers and, subject to any additional project-related NDAs, the agenda for such
a scope discussion shall include:
1. Presentation of the general project description and expected timelines, by the Project
Team.
2. Quality assurance/inspection provision premise and expectations, including the work
scope, by the Project Quality Lead or member of their team.
3. Description of the anticipated contractual arrangements, by the relevant Project C&P
staff.
4. Expectations on additional key performance indicators (KPIs), above the general
contractual list as per the Inspection Services Enterprise Framework Agreement.
5. Presentation by the Inspection Service Provider on their capabilities, including how
they envisage organisation, coordination and execution of the anticipated work scope.

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6. Selection of Inspection Service Provider
The allocation of scope amongst the EFA Inspection Service Providers must remain, within
the boundaries of commercial confidentiality, as transparent as possible and auditable. Any
project or local tendering rules must be fully adhered to.
Overall accountability for the allocation of Inspection Services requirements rests with the
Project Quality Lead, supported by the Project C&P staff, in consultation with the Regional or
Global Technical Focal Point for Inspection Services and Category Manager.
The process by which a Project selects an Inspection Service Provider will be based on their
offer on the scope of work and previous performance in delivery to Shell Projects.
Supplier selection shall be based on analysis of the Preferred Suppliers’ presence,
capabilities, headcount and rate proposal in each country, including discounts and other
incentives. This must include guarantees of skilled available staff, a presence close to the
relevant locations, experience, technical capabilities, terms and conditions and rates. The
method by which they intend to organise and coordinate the work scope, must also be
considered.
Where feasible and where valid in terms of overall cost and effort, the number of Inspection
Services contracts for the global scope of that project (procurement/construction) shall be
minimised and in principle limited to one. Global procurement activities on large-scale
projects may require a contingency in the supply of inspection personnel:
 identification and selection of cross-border personnel (“flying squad”),
 commercial retention of a back-up Inspection Service Provider may be required to
ensure that there will be no gaps to the level of support.
The Project Quality Team and Inspection Service Provider shall hold a specific Inspection
Kick-off meeting and agree the finalised details of organisation, coordination and notification.
Performance monitoring in the form of a Contract Management Plan (CMP) shall be
implemented using the standard set of Key Performance Indicators set in the EFA, and any
additional Project-specific requirements..

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7. Equipment/Package Kick-off Meeting
The entity procuring the equipment (e.g. Contractor) will place a purchase order (PO) and
announce the name of the selected vendor. This PO will be made available to the Shell
Project Team. A complete suite of technical documents for the equipment will be provided.
The Project Quality Team shall set-up a folder in an agreed accessible location (extranet,
document server, etc.) for access by the inspectors.
A Kick-off Meeting for the equipment/package will be arranged by the entity procuring the
equipment (Engineering Contractor, Shell, etc), usually at the Project Office, and shall also
be attended by the Equipment/Package Vendor and the Shell Project representatives.
One of the key outputs from this meeting of relevance to inspection will be the
announcement by the vendor of the manufacturing locations and identification of (sub-)
suppliers.

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8. Engineering Quality Risk Sheet (EQRS) Development
One of the key elements of the Project-specific Inspection Strategy should be to drive the
quality interventions on purchase orders by performing assessments of criticality and risk on
a continual basis. This process shall be formalised by the use of Engineering Quality Risk
Sheets (EQRS) and their review. EQRS can also be managed in the Quality Inspection
Reporting Management System (QIRMS).
The EQRS review allows the relevant stakeholders of purchase order (P.O.) to discuss and
document the threats and opportunities for assuring the quality of the deliverables for that
P.O. By repeating the process on a frequent regular basis, emerging risks can be added,
and a document trail is created for future reference, not only during the Execute phase but
also into Operate and also for the use by other projects as part of Lessons Learnt.
The Project Quality Team shall organise an initial EQRS review. This process encourages
an active connection between the Project Package Engineers, the Project Discipline
Engineers and the Quality Assurance Engineers, and the relevant information that needs to
flow from Shell to the inspection staff is largely condensed. The technical risks and concerns
for a package are captured in a structured way. Risks and concerns emerging from vendor
selection and manufacturing changes can be identified and a mitigation action plan can be
developed. Monitoring inspection levels are determined and reviewed to ensure they
continue to address the risks.
The EQRS remains ‘evergreen’ throughout the lifetime of the Package.

The level of intervention on any package may be increased:

 Where non-approved suppliers are utilised. This includes vendors qualified to
equivalent standards as demanded by TAMAP such as the Fast-Track Process;
 As a result of the Engineering Quality Risk Assessment review after the vendor has
been selected;
 During the lifetime of a package through to delivery where additional risks to the
equipment type or vendor offering are identified, or obtained from Lessons Learnt on
other projects. The Project Quality Team shall ensure the uptake of lessons learnt
through inclusion in the audit/EQRS processes and inspection requests to the
inspection resources;
 Where scheduling aspects or factory load present a risk to quality.

8.1. EQRS development process

An Initial Criticality Assessment is carried out during the Define phase in accordance with
Section 2 of this Project Guide. This leads to a four tier criticality level, each warranting a
level of quality invention for the entity procuring the equipment, as well as the basis for
Shell’s quality assurance surveillance activities.
A first-pass EQRS Review shall be organised by the Project Quality Team. As a minimum,
this session shall be attended by:
 QA/QC Engineer
 Project Engineer
 Lead Discipline Engineer
It is the responsibility of the Project Engineer to obtain input from the Project Discipline
Engineers prior to the meeting and to have available the information from the Kick-off
Meeting. The EQRS will be pre-populated by the Project Quality Lead with the relevant data
from the PO.

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The outcome of the EQRS review could be that the risk has significantly increased so as to
warrant additional quality intervention. This may include additional controls/visits/review by
the Project/Discipline Engineer or by increasing the site inspection activities. These actions
shall be captured in mitigation plan that forms part of the EQRS and remain evergreen.

8.2. EQRS Topics

8.2.1. Assessment Categories on EQRS

The topics that need to be addressed in the EQRS session are:
1. Vendor selection
 Qualification and selection process of vendors and sub-suppliers, including link back
to TAMAP assessment (if available) and any requirements of TAMAP Fast-Track
Process
 Sub-vendor selection
 Schedule/cost risk exposure with selected vendor
 Previous Shell Projects performance of vendor
 Market intelligence on performance of vendor
2. Inspection quality
 Qualification looked for in the various inspectors (vendor, contractor procuring, Shell’s
2nd party inspectors)
 Involvement of notified-body/certifying authority
3. Quality Assurance Effectiveness
 Robustness of vendor’s QA/QC procedures and any known non-conformances or
corrective actions
4. Flawless Project Delivery (FPD)
 Equipment/package FPD requirements and implementation at vendor
 Novelty
5. Commodities/bulks
 Any known issues in commodities/bulks and Rogue and Counterfeit materials
6. Sustainability/repeatability
 Incorporation of lessons learnt
All fields in the EQRS shall be completed, even if they are currently not applicable.
Statements such as, “No identified issues to date” shall be used in those cases; this depicts
that the topics of each field has at least been considered and evaluated.
The traffic light system (red/amber/green) shall be used to visualise risk and areas requiring
(additional) attention.

8.2.2. Residual Technical Risks on EQRS

The EQRS shall contain a section to note any other technical risk that has not addressed in
the categories shown in 8.2.1. For this section, it is imperative that the input from the Project
Discipline Engineers is sought. The following disciplines shall be considered:
 HSSE
 Mechanical
 Materials

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  Piping
 Rotating
 Electrical
 Instrumentation
 Process
 Structural
 Flawless
 Operations/readiness
 Layout / Footprint
 Weight Control
 Human Factors Engineering
 Technical Interfaces
 Logistics.

8.2.3. Shell Project Team Monitoring Plan on EQRS

This section contains the details of the attendance of Shell Engineers and inspection
personnel at set quality intervention points such as:
 Pre-inspection meetings, HAZOPs, Factory Acceptance Tests, etc.
 Engineering and execution progress meetings
In addition, this section contains the details of additional inspection interventions above the
marked-up ITP items:
 Additional monitoring visits by Shell Engineers
 Additional monitoring by 2nd party inspectors from the Inspection Service Provider.

8.2.4. Overall Risk Mitigation plan

For each of the above categories that are designated as a “red” or “amber” risk, a mitigation
action needs to be formalised, with a recognised action party and a due date for completion.

8.2.5. Conclusion
The final action from the EQRS review is to re-assess the overall criticality of the equipment.
As a general practice, the criticality rating shall not be lowered from the original rating
determined before the purchase order was placed. Any increase in the revised criticality
rating shall be reflected in the assurance and inspection levels.
The timing of the next EQRS review shall also be captured.

8.3. EQRS Assurance Meeting

The progress overview of all of the EQRS for the project shall be recorded (e.g. in a
spreadsheet) and reported in the central Project information storage. The overall status shall
be reviewed in a regular EQRS assurance meeting in which the relevant Project and
Discipline Engineers, the Project Engineering Manager and the Project Quality Team
participate. This meeting is intended to challenge the content and validity of the EQRS
sheets, and the overall progress. Some highly critical package EQRS may be discussed in

16
detail and decisions can be made to shift the focus and budget of the quality interventions
between higher and lower risk packages.

17
9. Inspection and Test Plan (ITP) Update
The Inspection and Test Plans (ITPs) shall define all key fabrication steps, the accept/reject
criteria associate with each step, and the specific methods and procedures to be used to
ensure that all contractual requirements are met. This includes all equipment, packaged units
and commodity/bulks supply. ITPs shall be monitored to closure.
Post-award, generic ITPs developed during the Define Phase shall be used to update the
Vendor-specific ITPs with the determined inspection interventions.
Once the Vendor ITP is issued, the entity procuring the equipment shall perform a gap
analysis with their interventions and then \forward the gaps to the Project Quality Team.
The Project Quality Team shall coordinate the marking-up of the ITP for Shell, taking into
account criticality, information coming from the EQRS and the determined inspection levels.
Where Shell has only an assurance role in the procurement process, the use of Hold Points
shall be minimised; Pre-Inspection Meetings and Inspection Release shall generally be
considered Hold Points.
First-of-a-kind activities also require a higher level of intervention than standard
manufacturing steps.
The marked-up ITP shall be transferred back to the entity procuring the equipment, prior to
the Pre-Inspection Meeting.

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10. Inspector Selection
Inspector and competence attributes are outlined in the Inspection Service EFA. All
inspection personnel shall meet the minimum requirements for competencies, skills,
experience, and verified qualifications that have been agreed between the Inspection Service
Provider and the Project prior to bringing them onto the Project.
The Shell Project Team shall reserve the right to screen CVs and interview inspection
personnel from the list of those proposed by the Inspection Service Provider. The interview
can be omitted at the Quality Lead’s discretion, based on previous experience or knowledge
of the inspector. The Project Quality Team shall approve all inspection resources and
maintain a register of approved personnel.
The Inspection Service Provider shall minimise the changeover of inspection personnel
during an assignment. Whenever changeover during an assignment does occur, the
Inspection Service Provider will be required to give the Technical Focal Point for the Contract
(e.g. the applicable Project Quality Engineer) a minimum of two weeks advance notice and
ensure that there is a seamless handover of all activities.
The Inspection Service Provider is responsible to provide competent inspectors. The Shell
Project Team shall reserve the right to implement additional ‘competency gate keeping’. This
may include specific additional testing on the awareness of Shell standards, particularly on
DEM1 aspects, using the DACSi system. For Non-Destructive Evaluation (NDE) operators,
an additional practical examination may need to be completed prior to mobilisation.

The Inspection Service Providers’ Project Coordinator will submit suitable CVs using an
agreed template. The template will include:
 Type of equipment;
 Number to be inspected;
 Country;
 Discipline;
 Specific competencies in relation to the standard Inspection Services EFA job
descriptions;
 Job grade;
 A short description of the item;
 Service and criticality.
 Inspector Contact details i.e. contact no and email
The Project Quality Lead and the Responsible Engineer will review the CVs using their own
criteria identifying the most suitable candidate. This shall be recorded on an evaluation form
and the Inspection Service Provider’s Project Coordinator notified. Back-up inspection
personnel may also be selected.

10.1. Induction Programme

All inspection personnel working on Shell Projects shall go through the Inspection Services
EFA induction programme, prior to mobilisation. This also applies to the supervisors of the
inspection personnel, inspection coordinators and their direct management. The Inspection
Service Provider’s Project Coordinator shall be responsible for ensuring that all parties
complete the induction programme. The induction certification will expire one year after the

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DACS - DEP Awareness Competency System, with a global go-live in 1H 2013

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last day worked under the Inspection Services EFA. The induction shall consist of two
primary parts: the general working-for-Shell induction and a Project-specific induction.
The general working-for-Shell induction covers the following topics:
 Shell Life Saving Rules, Shell General Business Principles and Code of Conduct
 Shell organisation (project specific, if applicable)
 Shell global quality policy, practices and objectives
 Shell standards (DEPs, DEM1)
 Shell Flawless Project Delivery (FPD)
 Recognising rogue and counterfeit items
 Inspection Reporting
 Requirements and expectations of inspection personnel
 Inspection Service Provider’s own policies and expectations (HSSE training,
insurance and medical coverage, logistics, transport, journey management,
communication, etc.).
The Project-specific induction shall also cover the following topics:
 Project specific HSSE requirements
 Project description
 Project Team Charter
 Project Quality Policy
 Key challenges of the project
 Project Quality Team Organisation Chart with roles and responsibilities
 Organisation chart with contact point, including the Inspection Service Provider’s
Project Coordinator
 Communication protocol, including requirements on Entry- and Exit-calls.
 Project-specific non-conformance reporting and tracking
Depending on the size and global spread of the inspection resource, the induction may be
given using a web-based learning platform provided by the Inspection Service Provider or in
a classroom setting. Induction in a classroom environment is the preferred method, unless
demonstratively impractical due to the remoteness of the inspection personnel. The
induction must be successfully completed prior to initial mobilisation. Demonstration of
successful completion may be in the form of a written test.
The induction sessions shall be given by the Inspection Service Providers at their offices. A
‘train the trainer’ approach, given by the Project Quality Lead, may be required to ensure
expectations are clearly communicated for more complex projects.

10.2. Inspector performance

Inspector performance shall be monitored as part of the contractual arrangements between
the Shell Project Team and the Inspection Service Provider. Periodic auditing of inspectors
shall also be performed by the Shell Project Team, alongside the contractual obligations
under the EFA of the Inspection Service Provider to visit and audit their personnel.

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11. Pre-Inspection Meeting
Pre-Inspection Meetings (PIMs) shall generally take place four weeks before the start of
manufacture. Manufacture shall not commence prior to the PIM, unless explicitly agreed by
Shell.
The inspection notification period shall be formalised as part of the contractual
arrangements, and shall not be shorter than ten successive days. However, it shall be
established that the entity procuring the equipment indicates a tentative date for the PIM on a
4-week inspection look-ahead, which shall be updated on a weekly basis. This look-ahead
will be provided to the Inspection Service Provider to allow pre-selection of CVs and the time
for the selection of inspection personnel to be completed.
On selection of the inspection personnel, the Project Quality Team will provide access to the
data relevant to the PO and PIM.
The selected inspection personnel shall be expected to attend the PIM. Attendance at the
PIM by the Shell Engineer will be in accordance with the EQRS mitigation plan.
Pre-Inspection Meetings shall be chaired by a representative of the entity procuring the
equipment, and held at the Vendor’s premises. The Vendor documents shall be checked for
completeness and the ITP agreed between all parties before or during the PIM.

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12. Execute ITP
Responsibility for the manufacture and fabrication of equipment and commodity items in
accordance with the purchase orders and Project requirements lies with the Vendor. The
entity procuring the equipment shall provide or obtain 3rd party inspection in accordance with
the requirements of the ITP, to oversee the Vendor’s own quality activities.
In a large number of Project-execution strategies, Shell is not the entity procuring the
equipment but it is considered necessary to provide an additional level of assurance, through
the use our own or 2nd party Inspection Service Provision. In addition, it is necessary for the
Shell to have its own ‘eyes and ears’ to oversee critical Vendor activities, and provide a
verification of accurate quality control results. This additional assurance shall be captured in
the ITP.
Quality control inspection results shall be verified “hands-on” at a minimum rate of 5% for
manufactured and fabricated products. This verification may be via a third party, through re-
measurement and testing or through a witness point. In order to classify as a verification
step, inspection personnel must re-perform the step or witness the step and conclude with
the same/similar results. Project Quality Teams shall be cautious of verification activities of
paper records and witness/monitoring points. Some witness/monitor points only ensure that
that step was actually conducted but do not always ensure that the step was conducted
correctly.
In line with Shell’s HSSE expectations of its vendors, inspection personnel are required to
pay close attention to the safety situation at the work site visited. Inspection personnel must
be encouraged and be empowered to intervene if any unsafe situation occurs.
Prior to the mobilisation of inspection personnel, the Project Quality Team together with the
Inspection Service Provider’s Project Coordinator shall establish the ways of working and
instigate an Entry- and Exit Calls process between the inspection personnel and the
Responsible Engineer. As a basic contractual expectation, Entry- and Exit-calls shall be held
for all inspection activities.
With the Entry Call, both parties can confirm that the latest information has been received
and understood prior to the visit. The Exit Call is held prior to inspection personnel leaving
the site of the inspection after completion of the inspections step. A quick summary of the
inspection findings and observations is communicated, for action if required. Where time-
zones do not permit timely conversations, and the process has been formally agreed
between the inspector and the Responsible Engineer and documented, , the Exit Call can be
replaced by other forms of immediate electronic communication. The Exit Call process is in
addition to, and not a replacement of, the agreed formal inspection reporting requirements.

The start of manufacture shall be announced in a regular (weekly) Procurement Meeting

between the entity procuring the equipment and the Shell Project team.
Notifications for Witness (“W”) or Hold (“H”) points on the approved Inspection and Test Plan
shall be communicated by the Vendor to the entity procuring the equipment. These
notifications shall be indicated on an inspection look-ahead plan, and forwarded to the Shell
Project Team taking into account the minimum contractual notification period (minimum 10
days). The Project Quality Team will share this information with the Shell Project Engineers
and Inspection Service Provider’s Coordinator. Shell will then call-off the previously selected
inspection personnel to attend the inspection Hold/Witness point.
Call-off sheets shall be established between the Project Quality Team and the Inspection
Service Provider’s coordinator. Call-off sheets shall contain the following information:
 PO information
 Duration of the inspection assignment
 Vendor details and address of inspection location

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  Contact details of the Shell Project Quality Team and relevant Engineer
 Description of the work to be carried out
 Any additional areas of concern that the inspector needs to pay attention to
 Description of the deliverables of the inspection
The estimated cost/time/resource information shall be completed by the Inspection Service
Provider’s coordinator. The duration of an inspection assignment can be for a period a one
day (“ad-hoc” type inspection) to up to one year, for a resident inspector.
A monitoring inspection regime shall be instigated in accordance with the EQRS. Inspection
personnel will be called-off on a long-term basis to visit the vendor sites at a regular interval
(e.g. monthly, fortnightly, weekly) and are to undertake the Review (“R”) steps as per the
Inspection and Test Plan, as well as a check on general manufacturing progress and the
behaviours of the Vendor at the shop floor. Inspectors will be expected to carry out a
minimum of 5% hands-on verification of the inspection activities of the other parties.
All proof-tests (final pressure tests, FATs, etc.) and 5% hands-on verification of the
inspection activities will be marked-up on the Inspection and Test Plans as Hold points. Hold
points are to be attended by the inspection personnel and in some cases the relevant Shell
Engineer. A proof test attendance schedule for the Shell Engineers should be drafted by the
Project Quality Team.
Special attention shall be paid to the preservation and packaging requirements for the
equipment or items, as they may be subject to extended storage or lay-down prior to use.

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13. Inspection Reporting
Inspection personnel are expected to provide inspection reports that contain, as a minimum,
the following information:
 Project name
 Equipment Purchase Order number and/or tag
 Report number
 Report date
 Date of visit
 Name of Inspector, including contact details
 Name of vendor or construction firm
 Location
 Persons present during the visit
 Purpose of visit
 Page of inspection report
 HSSE issues
 Equipment, materials and/or activities inspected during the visit (item number,
quantity, description, tag number/batch number/serial number/heat number)
 Detail of inspections carried out (reference to Inspection and Test Plan)
 Result of inspection
 Documentation and procedures used (number, revision, title)
 Documents/radiographs reviewed, including their references/numbers
 Markings
 Areas of concern
 Actions to be taken
 Date and intent of next visit
 Flawless Project Delivery aspects
All inspection reports shall be entered into the Quality Inspection Reporting Management
System (QIRMS). Inspectors shall report observations from in-process visits and inspections
(including hold points, witness points and random surveillance-type inspections) into the
Inspection Reporting System on a daily basis. The record will provide a representative
picture of the performance of the overall vendor manufacturing process ..
QIRMS shall also be used to document, track and record dispositions on all non-
conformances.
A minimum of one meaningful surveillance observation shall be reported into the Inspection
Reporting System per eight hours worked. Some non-destructive evaluation techniques may
have limited results and data available in that period as the individual inspection duration
may exceed eight hours. This should be managed by agreed exception on a case-by-case
basis considering the scope of the work..

The types of observations to be recorded will be expected to include, but not be limited to:

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 Result of in-process inspections

 Difficulties observed in the vendor manufacturing process and/or the resolution of

these difficulties

 Any concerns expressed by vendor personnel as it relates to the manufacturing

process (e.g. change in supplier, key personnel, fabrication method, inspection or
testing method, tools or machinery, storage location, documentation requirements or
processes)

 Novelties, i.e. any use by the vendor of new components, tools, suppliers, work
processes, personnel, or other new elements that could directly or indirectly have an
impact on product quality, that were not previously identified

 Any sub-standard practice or conversely any practice worth replicating

 Any leading indicators for product quality issues

 Any special points of attention and/or specific requests for inspection coming from the
Shell Project Team.

 Materials that are sub-standard and do not meet the requirements of the job
specification, i.e. an item that is a copy or substitute without legal right or authority to
do so or one whose material, performance, or characteristics are knowingly
misrepresented by the vendor, supplier, distributor, or manufacturer; and/or an item
or a material that is sub-standard (does not meet the industry and/or procurement
specifications); and/or an item that is suspected, but not confirmed, to fall under any
of these categories.

 Saves, i.e. cases where the Inspection Services Provider’s inspection personnel
catches a deficiency that was not caught by the designated vendor quality control
process.

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14. Equipment Acceptance
Clear agreement on the acceptance criteria shall be obtained prior to the start of
manufacture. This shall be captured as part of the Inspection and Test Plan. Inspection
release shall be considered a Hold Point, and must include details on the packaging and
preservation requirements.
No equipment shall leave the Vendor premises unless all inspection and testing
requirements as per the ITP have been successfully completed and the Manufacturing Data
Record is completed.
The transfer of responsibility (responsibility of the package, responsibility of the inspection
activities) shall also be clearly defined between all parties, and included as part of the
Project-specific Inspection Strategy.

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15. Inspection Release Note (IRN)
The IRN shall be issued by the responsible engineer once the equipment is ready for delivery and
under following condition where all the key documents, procedures, drawings reach code 1 (approved
with no comments); NCR/deviation approved or closed and compilations of MDR reach at least 95%.
Note: Key documents, procedure, drawing shall be identified by Package responsible engineer or
Package engineer.

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Appendix 1. SIPOC Overview of Inspection Strategy Framework

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Appendix 2. SIPOC Overview of Inspection Service Provision

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Appendix 3. Flowchart showing interlinks with overall procurement
activities

...

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Appendix 4. Engineering Quality Risk Sheet (EQRS) template

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Appendix 5. Pre-Inspection Meeting (PIM) Agenda

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Appendix 6. Source Inspector Responsibilities template

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