Contract Review

1
Contract Review
Contract Review
Approved for Public Release
2

• A COMPLETE AND THOROUGH CONTRACT REVIEW IS THE
  KEY TO SUCCESSFULLY PROVIDING A COMPLIANT END
  PRODUCT

Approved for Public Release
3
Topics

• Request for Quote (RFQ) vs. the Purchase Order
  (P.O.) and supplemental changes
• Purchase Order review
• Issues
• Who should perform contract review
• Process

Approved for Public Release
4
Request for Quote (RFQ) vs. the P.O. and
Supplemental Changes
RFQ vs. PO

• RFQ (Request for Quote)
• Draft P.O.
• Issued P.O.
• Supplemental Changes

Approved for Public Release
5
Topics

• Request for Quote (RFQ) vs. the Purchase Order
  (P.O.) and supplemental changes
• Purchase Order review
• Issues
• Who should perform contract review
• Process

Approved for Public Release
6
Purchase Order Review
P.O. Review
Supplier Number
Supplier Company Address
EB Buyer Contact Information
Approved for Public Release
7
Purchase Order Review
P.O. Review
Terms Conditions
Delivery Commitment
Inspection Requirements
Approved for Public Release
8
Purchase Order Review
P.O. Review
Approved for Public Release
9
Purchase Order Review
P.O. Review
Approved for Public Release
10
Purchase Order Review
P.O. Review
Approved for Public Release
11
Purchase Order Review
P.O. Review
Documents
Standard Clauses
Remarks
Buyer Standard Messages
Approved for Public Release
12
Topics

• Request for Quote (RFQ) vs. the Purchase Order
  (P.O.) and supplemental changes
• Purchase Order review
• Issues
• Who should perform contract review
• Process

Approved for Public Release
13
Issues
Issues

• Unapproved procedures
• Non conforming materials
• DFAR
• Material specification revisions
• Missing testing NDT, first article, heat
  treatment, mechanical
• Incorrect lubricant
• Certification records
• Lack of flow-down to subtiers
• Material marking

Approved for Public Release
14
Topics

• Request for Quote (RFQ) vs. the Purchase Order
  (P.O.) and supplemental changes
• Purchase Order review
• Issues
• Who should perform contract review
• Process

Approved for Public Release
15
Who Should Perform Contract Review?
Contract Review

• Contract Reviewers Need
• Experience
• Education / Training
• Attention to detail
• To be from each of the affected areas (e.g.
  Engineering, Quality, Operations)

Approved for Public Release
16
Ground Rules for Reviewers
Contract Review
IN ALL CASES THE PURCHASE ORDER IS THE
CONTROLLING DOCUMENT AND TAKES PRECEDENCE OVER
ALL OTHER DOCUMENTS, EITHER WRITTEN, IMPLIED OR
SPECIFIED.
Approved for Public Release
Approved for Public Release
17
Ground Rules for Reviewers
Contract Review

• VIR

VPAR
Approved for Public Release
18
Review P.O. for Quality System Requirements
Contract Review

• Quality System Requirements include
• EB2678 (Quality Control Requirements for Procured
  Material)
• MIL-Q-9858 (Quality System Requirements)
• Mil-I-45208 (Inspection System Requirements)
• Mil-Std-45662 (Calibration System Requirements)
• ISO Systems (Allowed per EB 2678 with
  modifications)

Approved for Public Release
19
Topics

• Request for Quote (RFQ) vs. the Purchase Order
  (P.O.) and supplemental changes
• Purchase Order review
• Issues
• Who should perform contract review
• Process

Approved for Public Release
20
Contract Review Technical Elements Must Consider
Process

• All Referenced documents and revisions (e.g.
  Dwgs., Specs, ERs, DRNs, VIRs), Standard Clauses
  and Modifications
• Testing (e.g. 1st Article, Pre-production,
  Production, etc.)
• Special processes and procedure approvals (e.g.
  Forging sketches, NDT and welding)
• Quality System Requirements

Approved for Public Release
21
Contract Review Technical Elements Must Consider
Process

• Assembly requirements
• Cleanliness
• Special Marking
• Special Certifications / Documentation / Test
  Reports
• Packaging
• Customer (EBSI) and Government (GSI) inspection
  requirements

Approved for Public Release
22
Documents to Review
Process

• RFQ (Request for Quote)
• Draft P.O.
• Issued P.O.
• Supplemental Changes

DO NOT ASSUME THAT OUR USE OF YOUR PART NUMBER
MEANS THERE ARE NO MODIFICATION
Approved for Public Release
23
Review Contract Changes in a Timely Manner
Process

• Supplements, Modifications
• Review to existing order in progress, perform
  complete review against prior order
• Does it affect work in progress or completed work
  not yet shipped?
• Resolve issues with customer via formal
  contractual correspondence

Approved for Public Release
24
Thorough Contract Review Includes All Applicable
Documents
Process

• Review all applicable documents (e.g.
  Specifications, Drawing, VIRS, and Engineering
  Reports (ERs), etc)
• Review all Standard Clauses
• Coded Notes
• Beware of revisions
• Review Remarks Section of P.O.
• Additional modifications and technical
  requirements
• Testing, acceptance criteria, mods to documents

Approved for Public Release
25
Which Documents Apply?
Process
Approved for Public Release
26
Which Documents Apply?
Process
Approved for Public Release
27
Base Material Requirements Must be Understood
Process

• DFAR compliant specialty metals
• Specification and revision (Spec. Effectivity)
• Alloy, condition, finish, heat treatment
• Testing chemical, mechanical, special processing
  (e.g. passivation)
• Test and inspection certifications

Approved for Public Release
28
Ensure All Testing Requirements are Addressed
Process

• Special fixturing or test setup needs
• Required test procedures and revision
• Test report requirements

Approved for Public Release
29
Special Processes(e.g. 1ST Article, NDT,
Welding)
Process

• Special Processing Requirements
• Welding, Nondestructive Testing (NDT)
• Heat Treatment
• 1st Article Testing
• Customer Approval of processes or procedures
• Vendor Procedure Approval Requests (VPARs) are to
  be used to obtain customer approval prior to
  processing, including subtier supplier procedures

ENSURE NECESSARY CUSTOMER APPROVALS OF PROCESSES
OR PROCEDURES IS OBTAINED
Approved for Public Release
30
Ensure All Assembly Requirements Have Been
Addressed
Process

• Special Lubrication Requirements
• Special Torque Requirements
• Special Marking
• Special Tooling
• Assembly Records

Approved for Public Release
31
Ensure All Cleanliness Requirements Have Been
Addressed
Process

• S. C. 16-16 (Steam Plant Cleanliness)
• MIL-STD-767 (Control of Hardware Cleanliness)
• MIL-STD-1330 (Precision Cleaning and Testing of
  Shipboard Oxygen-Helium, Helium-Oxygen, Nitrogen,
  and Hydrogen Systems)
• MIL-STD-1622 (Cleaning of Shipboard Compressed
  Air Systems)
• Critical Hydraulic Components Cleanliness (SC
  16-21)

Approved for Public Release
32
Special Marking Requirements Can Include Hardware
and Software
Process

• Traceability (Lot code), P.O., Item Number
  Identification
• Marking may be required on material,
• certification, and packaging
• NDT Marking
• Level 1 Material Designators
• Flow Arrows, Pressure Rating, etc.

Approved for Public Release
33
Special Certification, Documentation and Test
Reports
Process

• C of C
• Assembly Records
• Mercury Free Statement
• Vendor Procedure Approval Request (VPARs)
• Shelf Life Certification for Non-Metallics
• Cleanliness Certification
• Test Reports
• Weld / NDT Records
• Repair or Replace Certification

Approved for Public Release
34
Ensure All Packaging Requirements Have Been
Addressed
Process

• Warning Labels
• Preservation
• Protection of Noise Critical Equipment
• Electrostatic Discharge (ESD ) Packaging for
  Electrical Components
• Seals and Capping

Approved for Public Release
35
Customer (EBSI) and Government (GSI) Inspection
Requirements
Process

• Advanced notification and location
• Identification of hold points (i.e. in the
  production router)

Approved for Public Release
36
When Contract Requirements are UnclearGet
Clarification!
Process

• Preferably during the RFQ stage
• Have the contract amended by VIR or PO
  supplement. Verbal agreements are not recognized
  by EB inspection
• Points of Contact
• EB Material Management (Buyer)
• EB Supplier Quality

Approved for Public Release
37
Conclusion
Conclusion

• Success or failure is in the details
• Never consider something in the contract of being
  of little value or importance because
• Trifles are details. Details make perfection and
  perfection is no trifle
• Benjamin Franklin

Approved for Public Release