Qualified Vendor list For EPC Contracts in Oil and Gas Construction Project

Qualified Vendor List:

In this Article we will focus on about EPC Contracts and the qualified vendor list indicated in EPC contracts between The owner and the contractor, we will understand what is a qualified vendor and what is a qualified vendors list and what is the procedure to qualify vendors?

Qualified vendors list contains a detail of vendors who meet the organization's requirements, I mean the requirements of the owner because in the EPC Contract the owner provide to the contractor a list of Qualified vendors for material and equipment procurement and he provide also a list of subcontractors for performing the activities of construction such us welding, testing, erection of equipment and other activities.

Requests for quotations, RFQ or RFP Request for Proposal Or invitation for bids shall be sent only for the qualified vendors or subcontractors which are indicated in qualified vendor list provided by the owner to the contractor.

Qualified vendors list contains vendors who are meeting the owner requirements in the previous project, and we will send them our RFP so they can cote. They can give you their proposals for the services or the products that you need.

Qualified vendors list can be created based on historical information about different vendors who delivered materials, services or equipment for prior projects. So, if the owner had a successful experience with one of the vendors, he adds him to vendor list. So, the vendor list will have the vendors and your feedback about Them, and these are approved vendors, and you will contact them in the future project.

Qualification of vendors:

Vendors will be selected from Vendor list that includes only Vendors / Suppliers already qualified by Contractor and approved by Owner. Vendors have been qualified through review of performance on Owner’s past pojects.

If they are new to Owner, they will be qualified through qualification process including desk and physical surveys:

1- Desk Survey: The Owner and contractor shall review the documents and all information about the vebdor listed below:

a) Qualification from Quality point of view: In general, this step of qualification is performed by QC Department.

- Company Brochure

- Reference list

- Shop survey report (including, but not limited to, Number of employees, shop layout, shop facility details etc.)

- Quality manual in accordance with ISO 9001 or equivalent

- Sample documents for the similar projects (Inspection & Test Plan, Inspection Procedures, WPS/PQR, General Arrangement Drawings, Fabrication Procedures, Material Purchase Specification, Fabrication Schedule, etc.

b) Qualification from commercial and design point of view: This step of qualification is carried on by Procurement department and shall include:

- The name, contact information, subcontractor plant location(s) and capacity, workload, performance/delivery history, references with names.

- HSE policies and performance.

- Quality Assurance certification.

- Verification that the proposed vendor can, if required, provide the requested amount of technical support and after sales service.

- Information relating to the financial status of the supplier and/or subcontractor and copies of its accounts for the last three years;

- The supplier’s and/or subcontractor’s previous experience in the country of project; •

- Copy of its legalized commercial register.

Based on this document / information verified by the QC and Procurment Département , Contractor will evaluate whether Vendor has system where quality of equipment and materials are produced with a proven track record or not.

2- Physical Survey:

After confirmation of Vendor’s documented Quality and commercial capabilities by desk survey, Contractor may visit Vendor’s shop to survey their design, fabrication and quality control capability for critical/major equipment and materials.

Physical survey will be performed by a team consisting of project Procurement manager, Buyer, Discipline Engineer such mechanical engineer, electricity engineer, instrumentation engineer and Quality control Manager. The main purpose of physical survey is to confirm whether Vendor implements his work in accordance with his documented manual/ plan/ procedure, even if it has appropriate documented system. Followings are typical areas to be reviewed during shop visit. - Safety Implementation - Interview appropriate disciplines (project manager, engineering, management, fabrication engineers, supervisors etc.) in regard to specific implementation of the quality manual requirements. - Material lay down yard and storage conditions - Traceability - Fabrication implementation (material handling, welding, heat treatment, material segregation, machining, forming, assembling, etc.) - QC system (Organization, manager, NDE, calibration, test facilities) - Control of Design Change (how engineering change is transferred to manufacturing) - Quality control of Sub-orders (Sub-vendor selection process, existence of approved vendor list, transfer of specifications and/or specific requirements)

At the end of the desk and physical survey’s the contractor can decide whether the new vendor is qualified or not.

After the acceptance of the contractor to the new vendor, he shall demand the approval of the owner to accept the new qualified vendor by submitting a request to add vendors in Qualified vendor list, the request shall be supported by the vendors Evaluation Report,in some cases, vendors are qualified by contractor but owner refuse these vendors or subcontractors,