VES-1100

GENERAL REQUIREMENTS FOR THIRD PARTY INSPECTION SERVICES

TABLE OF CONTENTS
Page

1.0

SCOPE

2.0

DEFINITIONS

3.0

GENERAL REQUIREMENTS

4.0

DOCUMENTATION

5.0

COMMUNICATION WITH COMPANY

6.0

COMMUNICATION WITH VENDOR

7.0

COST OF INSPECTION SERVICES

8.0

PROPOSAL DOCUMENTATION

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VES-1100
Rev. 7, 11/02

1.0

SCOPE
This standard defines the minimum requirements for inspection of equipment and materials by a
third party inspection company. This standard must be used in conjunction with the latest
revision of Company Standard VES-1000 and all the requirements defined in the Purchase Order
for the material and/or equipment.

2.0

DEFINITIONS
Throughout this Standard, the terms used shall be as defined in VES-1000 with the following
exceptions:

3.0

Inspector

The third party inspection company and all his subcontractors, if any,
and all employees of these contractors responsible for performing the
services defined in this Agreement.

Agreement

Company's "Contract Short Format", or any other type of contract

between Company and Inspector which includes this Standard, VES1000, and all terms, conditions, documents, drawings, etc. referenced
therein.

GENERAL REQUIREMENTS
3.1

Inspector shall furnish international third-party inspection services to perform progress

inspection and expediting, to witness testing and to perform final inspection services in
the various manufacturing facilities associated with the Company Purchase Order(s) as
defined in the Inspection Document (See Section 4.0) and as specified on the Third Party
Inspection Services Data Sheets. These inspection services are required to ensure that
the goods to be supplied for Company's use are in complete compliance with the
requirements defined in the Purchase Order, and all specifications, data sheets,
standards, codes, drawings and other documents referenced therein.

3.2

The various types of inspection and expediting services required have been divided into
the following general categories:
a)

Final Inspection - Inspector shall provide the services necessary to visually

inspect all the equipment, materials and supporting documentation at point of
manufacture, after manufacturer has stated that the equipment is complete and
ready to ship to ensure that all the requirements of Company's Inspection
Document, including all referenced specifications, drawings and other documents
referenced herein, have been satisfied. Final inspection typically includes
dimensional checks, inspection of mill certificates, material test reports, test
reports for hydrostatic and performance testing and visual inspection of
completed equipment to verify compliance with Company's requirements.

b)

Progress Inspection - Inspector shall provide services for the inspection of

equipment and materials during the manufacturing process which shall include
witnessing of tests performed by the manufacturer on various components and
assemblies of the equipment and visual inspection of the manufacturing process
of the equipment and its components to satisfy the requirements defined in
Company's Inspection Document. When Progress Inspection is specified, the
services specified above for Final Inspection shall also be provided by Inspector.

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Progress inspection typically includes such activities as welding inspection/NDT,

witnessing hydrostatic and performance testing, inspection of mill certificates and
material test reports, dimensional checks and functional tests.
c)

Packing Inspection - Inspector shall provide inspection services during the

preparation of equipment and materials for shipment, including visual inspection
of the packing operations, physical checking of all packing lists and review of all
shipping documentation.

d)

Migas Certification - Inspector shall provide all the services necessary for
verification and compilation of all documents, calculations, radiographs, hydrotest
reports and all other documents necessary to obtain certification of equipment by
BP MIGAS, for further transmittal to BP MIGAS by Company. Inspector shall
provide all additional information and answer all questions or comments as
required by MIGAS until such time as the certification is officially approved.

e)

Expediting - Inspector shall provide expediting services to ensure timely

completion of the manufacturing process. These services shall include meeting
with manufacturers to establish production schedules, telephone progress checks
(minimum once per week), visits to location of manufacturer and sub-suppliers
(minimum once every 2 weeks) to verify actual progress and preparation of weekly
expediting reports for Company.

3.3

The type of services required will be specified on the Third Party Inspection Services Data
Sheet. Inspector shall perform all the services described in Section 3.2 for the types
specified on the data sheet plus all other inspection and testing requirements defined in
Company's Inspection Document.

3.4

Inspector shall be authorized to act as Company's inspection representative during any

inspection at Vendor's manufacturing facility, within the limits defined in the Purchase
Order. Inspector will have the authority to stop manufacture if non-compliance with the
Purchase Order is discovered. However, a delay in manufacture of more than four
working days resulting from such an action will require written concurrence from
Company. It is preferred that inspection visits not be scheduled on Fridays due to this
four day turn around.

3.5

Inspector is not authorized to approve any changes which affect the price, delivery,
technical or commercial requirements defined in Company's Purchase Order. However, in
the event that changes which may improve price and/or delivery come to the attention of
the Inspector, he shall immediately notify Company that such changes are possible.
During or upon completion of inspection of items under manufacture, Inspector shall
immediately notify Company, by telex, of any deficiencies which may have been
discovered during the inspection.

3.6

3.7

Inspector shall not, under any circumstances, release goods for shipment until he has
received written or telex permission from Company to do so.

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VES-1100
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4.0

DOCUMENTATION
4.1

For each Purchase Order, Company will furnish Inspector with an Inspection Document
consisting of the following:
a)
b)
c)
d)
e)
f)
g)
h)
i)

Complete copy of the Purchase Order and all Change Orders, if any.
Complete set of specifications and all other documents and/or drawings
referenced by the Purchase Order.
Complete copy of Vendor's proposal.
Complete set of all correspondence between Purchaser and Vendor.
Complete set of Vendor drawings, if available.
Name, address, telephone number and telex number of Vendor's contact.
Letter from Company outlining Contractor's authority.
Name of Company's authorized project representative.
Company's Third Party Inspection Services Data Sheet.

4.2

This document shall be in the possession of the Inspector's representative at Vendor's

facility during each inspection visit.

4.3

For progress inspections, some of the information, such as Vendor's drawings, may not be
available. It will be Company's responsibility to update and revise the Inspection
Document as required throughout the term of the Agreement.

4.4

Inspector shall furnish all referenced international (principally American) codes and
standards, such as those published by the American Petroleum Institute (API), American
National Standards Institute (ANSI), American Society of Mechanical Engineers (ASME),
American Society of Testing and Material (ASTM) and other international standards
organizations when these documents are referenced on Company Purchase Orders,
specifications and drawings. Inspector shall be familiar with the requirements of these
various codes and standards and shall have access to the referenced documents at all
times during each inspection visit.

4.5

All visits by Inspector to any Vendor's facility and all Final Inspections shall be documented
by an Inspection Report prepared by Inspector. These reports shall include, but not be
limited to the following information:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
m)
n)

Purchase order number

Manufacturer's order number, shop order number, etc.,
Name of Inspector
Name of manufacturer's representative
Location of manufacturer's facility (address, telephone number, telex number)
Date of inspection
Production status of order at time of inspection
Complete description of all inspection activities and the result of these inspections
Certified copies of all Vendor's test records, radiographs, instrument calibration
sheets, loop test sheets, etc.
Inspector's update of Vendor's fabrication schedule and best estimate of Vendor's
completion date
Complete description of any defects, deficiencies, deviations from specifications or
any other irregularities discovered
Inspector's interpretation of any NDT results including radiographs
Photographs of the equipment and/or materials during the various phases of
fabrication including a complete set of as-built photographs
Inspector's signature

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4.6

The Inspection Report from each visit must be mailed by Inspector via a courier service to
the attention of Company's project representative no later than three working days after
completion of the inspection. The Inspection Report must reach Company within seven
working days after completion of the inspection. Inspector may request additional time
only if required for test result interpretation, or because of unusual circumstances
surrounding inspection activity.

4.7

When Migas Certification (Section 3.2, d) is specified, Inspector shall provide the following
documentation, in addition to all other documents which may be required by Migas for
issue of an operating license:
a)

Manufacturer's Data Reports

b)

Assembly and Detail Drawings

c)

Calculation Sheets - signed by engineer

d)

Welding Procedure Specifications, Qualification Test Records

e)

Inspection Specifications

f)

List of Material Mill Certificates (Showing location, heat number)

g)

Mill Test Certificates

h)

Manufacturers Inspection Results - signed by inspector

-

i)

5.0

Actual Dimensional Records

NDT
Hydrostatic/Pneumatic Test Record Charts
Post Weld Heat Treatment Record Charts (when applicable)
Hardness Test Records (when applicable)

Name Plate Rubbing

COMMUNICATION WITH COMPANY

5.1

All communication between Inspector and Company shall be through Company's Project
Representative as defined on the Third Party Inspection Services Data Sheet.

5.2

Inspector is required to notify Company's Project Representative by telex prior to any

inspection visit. Company will then authorize the inspection by return telex. Any
inspection visit not previously authorized by Company will be for Inspector's account.

5.3

Upon completion of each inspection visit, Inspector is required to notify Company by telex,
within one working day after completion of the inspection. This telex notification shall
include a brief summary of the inspection visit, including an outline of any proposed
shipping schedules.

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5.4

Company's address and telex number are as follows:

VIRGINIA INDONESIA CO., LLC
c/o Supply Chain Management
Plaza Kuningan Menara Selatan, Lantai 6,
Jln. H.R. Rasuna Said, Kav. C11-14,
Jakarta.
Telex :
62458, VICO IA
Fax
:
(021) 523-6340/6100
Attention :

6.0

7.0

(Project Representative as defined on Third Party Inspection Services

Data Sheet)

COMMUNICATION WITH VENDOR

6.1

Upon award of this Agreement, Company will notify Vendor(s) that Inspector has been
appointed as Company's Inspection Representative.

6.2

Subsequent to this notification by Company, all future communication required to schedule

and coordinate inspection and testing visits shall be by Inspector, with a copy of all
communications to Company's project representative.

6.3

Once a tentative inspection date has been agreed upon by Vendor and Inspector,
Inspector shall telex Company as required by section 5.2 of this standard. Inspector shall
allow at least one week after notification of Company for receipt of approval to proceed
with the inspection visit.

COST OF INSPECTION SERVICES

7.1

Bidders shall submit a lump sum price to perform all the inspection services required by
Company's Inspection Document and by the Third Party Inspection Services Data Sheet.
This lump sum price shall cover all costs to perform the services, including transportation,
living expenses, correspondence (letter/telexes/phone calls), testing equipment and all
other costs associated with providing the inspection services.

7.2

The nature of third party inspection requires a means to provide for additional services
when problems, such as failure of a test which then requires repair and reinspection,
occur. To provide for such an occurrence, Bidder shall include a Provisional Sum in his
lump sum price equal to the percentage defined on the Third Inspection Services Data
Sheet. This Provisional Sum will only be paid if additional services are authorized in
writing by Company and then only for the additional services actually performed. If no
additional services are required to complete the work, then the Provisional Sum will not be
paid.

7.3

Bidders shall define units rates on the Third Party Inspection Services Data Sheet in terms
of Transportation Costs per inspection visit, Operating Cost per day at site of inspection
and Living Cost per man-day basis, in the proposal. Provisional Sums, if authorized, will
be based on these unit rates for only those services actually performed.
a)

Transportation cost shall be defined as a single per round trip cost to cover all air
and surface transportation costs for Inspector to travel to Vendor's manufacturing
facilities.

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b)

Living Cost shall be defined as a single per man day cost to cover all living
expenses, including housing, meals, laundry and all other costs necessary to
provide the services specified in this Standard.

c)

Operating Cost shall be defined as a single per man day cost for Inspector's
personnel, including all inspection and test equipment, telex, telephone, courier
service and all other costs necessary to provide the required inspection services.

7.4

Since Company requires telex notice before and after any inspection visit, these costs can
be easily verified. However, Inspector is required to document each invoiced inspection
visit against the Provisional Sum with copies of airline tickets, hotel bills, and other receipts
to verify physical presence at site during time for which the invoice is applicable.

7.5

Inspector shall not, under any circumstances, perform services which exceed the maximum
lumpsum price as defined in the Agreement. Any invoices submitted by Inspector which
cause the price for these services to exceed this maximum lumpsum value will be to
Contractor's account.

7.6

Invoicing for all services rendered shall be submitted to Company, Attention: Accounts
Payable, with a separate copy to Company's Project Representative. All invoices shall
show the following:
a)
b)
c)
d)
e)
f)
g)

8.0

AFE No.
Service Agreement No.
Purchase Order No.
Project Title
Type of Equipment or Material Inspected
Completion Report
Inspectors Name

PROPOSAL DOCUMENTATION
8.1

8.2

Bidders shall provide the following information in their proposals:

a)

Completed copies of Company's Third Party Inspection Services Data Sheets.

b)

Company's Inspection Document furnished with Request for Quotations.

c)

Completed copies of Company's Contract Short Format "Request for Quotation"

Forms.

d)

A written resume defining the expertise and experience of the inspector(s)

proposed for this work.

e)

A written document defining the scope of services which Inspector proposes to

satisfy Company's inspection requirement. This document will be used to evaluate
the Inspector's interpretation of Company's Purchase Order requirements and his
ability to provide the inspection services required.

f)

Name and address of Inspector's facility nearest to Vendor's facility from which
services will be provided.

Bid received which do not include all this information may be disqualified.

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VES-1100
Rev. 7, 11/02

VICO INDONESIA
THIRD PARTY INSPECTION SERVICES DATA SHEET
AFE No.

Revision

Date

Prepared By
Approved By

:
:

Company Project Representative

Title

:
:

-----------------------------------------------------------------INSPECTION SERVICES
-----------------------------------------------------------------LOCATION
P.O. NO.

DESCRIPTION OF
EQUIPMENT AND MATERIALS

QUANTITY

MFRG.

TYPE OF SERVICES REQUIRED

[
[
[
[
[
[

]
]
]
]
]
]

Final Inspection Only

Progress Inspection
Packing Inspection
Migas Certification
Expediting
Other :

LUMPSUM PRICE INCLUDES

TAG NO.
INSPECTOR'S
POINT OF ORIGIN

NO. OF TRIPS

UNIT RATE

LUMSUM PRICE COMPOSITION

Price Unit
Transportation
Living
Operating

:
:
:

NO. OF DAYS

Total Quantity
Per Trip
Per Trip
Per Trip

Transportation
Living
Operating

:
:
:

Trips
Days
Days

Sub Total
Provisional Sum

TOTAL LUMPSUM PRICE

Notes :

1)

This Data Sheet must be used in conjunction with Company Specification VES-1100.

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VES-1100
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% of Sub-Total
:

Total Price

NO. OF
PERSONNEL

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