sub contractor management procedure

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Document Title: Sub contractor management

procedure

AGL-GIL-AUH-IMSP-QHSE-023

Revision # Effective date Prepared By Reviewed By Approved By Page

2 18 October 2011 Process Analyst QHSE Manager CEO 2 of 7

1 OBJECTIVE

This document aims at outlining the principles of sub contractor management for Agility (Abu Dhabi) PJSC. The main objective of this process is to establish an effective frame work for:

1. Selection and pre-qualification of the sub contractors 2. Managing the sub contractor to ensure operational quality, health and safety

requirements expected out of the outsourced scope of activity

2 TECHNICAL AND NORMATIVE REFERENCES

Integrated Management System Manual AGL-GIL-AUH-001/Rev - 1 Procurement and evaluation of vendors AGL-GIL-AUH-IMSP-FIN-001

3 ABBREVIATIONS

IMS Integrated Management System QMS Quality Management System HSEMS Health, Safety, Environment Management System QHSE Quality, Health , Safety and Environment HSE Health, Safety and Environment KPI Key Performance Indicators LPO Local Purchase Orders SLA Service Level Agreements

4 PROCESS

4.1 SUB CONTRACTOR QUALIFICATION

All sub contractors that Agility (Abu Dhabi) intends to outsource some scope of work activities shall be approved by the Head Of the Department (HOD), Procurement Executive, Finance Manager & QHSE Manager (AGL-GIL-AUH-QHSE-039 Vendor Approval Form) Following table illustrates the elements to be covered by each approval authorities: 1 Head of the

Department HOD Operational & technical adequacy of services if required the approvals can be supported by an experts technical advise on services

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2 Procurement Executive

Procurement terms and conditions

3 Finance Manager Invoicing and payment terms 4 QHSE Manager Confirming conformance to the vendor

qualification process & receipt of QHSE records (if required)

The qualification criteria are as follows:

1. The sub-contractors should have a valid trade licence to operate in UAE to provide

outsourced scope of activities. 2. The sub-contractors should have all the relevant legal approvals as required by UAE

law 3. The sub-contractors shall have suitable and sufficient experience in the outsourced

field of activity The subcontractor shall also be asked to submit the following (not limited to) for review and assessment, if the outsourced scope of activity is major and has significant impact on business, operations, quality, health, safety and environment 1. Technical bid

a. Company registration documents (Trade license & Chamber of commerce

registration credentials) b. Sub contractors on QMS & HSEMS certification status and details c. Job specific experience history d. Method statement / Execution statement e. Coordination procedure f. Subcontractors HSE and Quality Plan g. Suitable and sufficient risk assessment records h. Incident statistics and KPI (details & reports) i. Financial statements last 3 years

2. Commercial bid

a. Pricing & price break up (If required) b. Invoicing, credit and payment details

Vendor evaluation and approval guidelines as stipulated in AGL-GIL-AUH-IMSP-FIN-001 Procurement and evaluation of vendor procedure shall be conformed at all times.

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4.2 SUB CONTRACTOR CONTROLS

Having outsourced a specific scope of activity to a sub contractor, following management frameworks need to be established to implement proper control on the sub contractor and the outsourced activity 1. Legal framework comprises of:

a. Legal agreements b. Contracts

2. Operational framework comprises of: a. Sub contractors activity execution plan and procedures to ensure operational

and technical requirements b. Sub contractors quality plan and HSE plan to ensure QHSE requirements c. Coordination & Communication plan

3. Performance framework comprises of: a. Service level agreements b. Key performance indicators c. Periodical performance reports

4. Financial framework comprises of: a. Credit policies b. Invoicing and payment plans

4.2.1 Legal Framework

1. All sub contracts need to have required legal agreements / contracts. Major sub

contracts shall have proper contract document consented and signed by both the parties. Under following conditions, a contract agreement is mandatory: a. If the total cost impact is above AED 50000 per month b. If the requirement for outsourcing is recurring and stays over the period of an

year or above c. If the sub contracted activity is highly critical and has significant impacts on

QHSE d. If the Top / Senior management mandates the requirement of a contract

agreement 2. An open and valid LPO is considered as a business agreement. All purchases that

include cost above AED 7500 must have a corresponding LPO All original contracts / agreements must be under the custody of the procurement department and shall be available for official audits and reviews. The procurement

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department shall manage the central sub-contracting document library and monitor the expiry, renewal and re-tendering of the sub contract. Copies of the contracts / agreements must be kept at relevant departments for their reference

4.2.2 Operational framework The key elements in the operational framework will be:

1. For all major sub contracts, sub contractors must submit a detailed execution plan

and work methodology to Agility (Abu Dhabi) for review and approval. The assessment team shall ensure that the execution plan and work methodology are suitable and sufficient to meet operational and technical requirements

2. For all major sub contracts, sub contractors must submit a detailed HSE plan and

Quality Plan to Agility (Abu Dhabi) for review and approval. The QHSE and operations team shall ensure that the Quality and HSE plan are suitable and sufficient to meet QHSE requirements

3. For all major sub contracts, the sub contractor and Agility (Abu Dhabi) shall finalize an

effective coordination and communication process between both parties. The communication platforms and review meeting frequencies must be mutually agreed

4. In addition to above, contractor shall adhere to all standard HSE rules and conditions (Refer to Annexure for Standard HSE rules and conditions for contractors). Annexure A may be amended from contract to contract depending upon the nature of work carried out by a contractor

4.2.3 Performance Framework This enables Agility (Abu Dhabi) to manage performance of the subcontractors to an

agreed and acceptable level. The sub contractor performance is managed by following tools based on the technical agreement / contracts / technical bids: Service Level Agreements SLA 1. Service level agreements will be prepared and signed by both parties (Sub contractor

and Agility (Abu Dhabi)) for all major sub contracts. The SLA elements and Key Performance Indices shall be reviewed and approved by the HOD and Business

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Performance Manager. 2. The monitoring of SLA shall be done through performance dash boards managed

through periodical reports and process audits 3. In case of any deviation from agreed service levels, immediate notification must be

sent to the sub contractor and a corrective action plan shall be obtained. Business Performance Manager shall follow up with the concerned operations whether the corrective actions are in place and effective

Key Performance Indicators KPI Set of Key Performance Indicators are established to be reviewed and monitored on a periodical basis. The KPI shall include Operational and QHSE control indicators. The KPI need to be reviewed and assessed at least on a monthly basis by the Business Performance Manager and the concerned operations department. The data for KPI evaluation and monitoring shall be forwarded to the Business Performance Manager by the respective departments / sections by 10th day of each month. Performance Reports In the beginning of the sub contract execution, required performance report formats and frequency of reporting must be agreed with the Sub Contractor. The mode, information format and frequency of the reporting are finalized by the Operations and Business Performance manager. The sub contract coordination/ review meetings shall be scheduled (as a minimum) based on the following guidelines. Monthly meeting Involving operation focal points, HSE officer, Business Performance Manager and sub contractor representatives. Half yearly meeting (every 6 months) Involving the operations lead, Head of the Departments, Procurement Executive, QHSE Manager, Business Performance Manager, sub contractor management and their representatives.

4.2.4 Financial Framework The main elements in financial framework are:

Invoicing process: Agility (Abu Dhabi) need to agree with the sub contractors on a clear invoicing process.

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Credit & payment terms: All contracts shall have a firm and agreed credit and payment terms

5 AUDITS All sub contractors are subjected to internal IMS audits. Audit schedule will be notified to the sub contractor at least 7 days before the date of audit. The elements that shall be covered in the sub contractor second party audit are:

1. Contractual requirements 2. Performance requirements SLA & KPI 3. Quality Processes and Systems 4. HSE Processes and Systems

All audits need to be recorded and copy of the audit report shall be sent to the sub contractor for required actions and record.

6 DOCUMENT CONTROL

1. All contracts and agreements shall have a unique identification control number 2. All major contract documents need to be controlled and a list of controlled documents

must be kept as a record at procurement office. One copy of the list of these controlled documents must be forwarded to the QHSE department for their record and reference

3. Confidentiality of the contract contents must be ensured at all times. If documents are handed over to a third party (for business and system audits), confidentiality agreement must be undertaken

7 RECORDS

1. AGL-GIL-AUH-QHSE-038 - Vendor Approval Form 2. Contracts 3. Local Purchase Order

8 RESPONSIBILITY

1. Head of the Department 2. Procurement Executive 3. QHSE Manager 4. Finance Manager 5. Business Performance Manager

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Document Title : Annexure A Sub Contractor Management procedure




1. INTRODUCTION

Agility ( Abu Dhabi) PJSC herein after referred as Agility is responsible for establishing and maintaining safe and healthy work conditions and minimizing the environmental impact of its activities. The contractor is responsible to make sure that the personnel under their control, working at Agility/ Agility controlled premises, follow all instructions given to them and report any shortcomings or incidents / accidents. The rules and conditions given below are Standard HSE Rules and Conditions for Contractors. It is the responsibility of Contractor to ensure that their personnel are conversant with these Standard HSE rules & conditions and they comply with them. These rules & conditions do not exempt the Contractor from his duties on statutory health, safety & environmental control requirements, but are intended to assist him in attaining high standards of compliance. Sub-Contractor is any company, which has contract with the Contractor. It is the responsibility of the Contractor to ensure that their sub-contractor personnel also fully comply with these HSE rules & conditions exactly like the personnel under the direct control of the Contractor. Contractors working for Agility shall comply with all the Agility HSE requirements and procedures. It is expected that Contractors shall adhere to the best safety practices being practiced by Agility. It is also required for them to familiarize themselves with the Agility IMS policy and all relevant procedures, guidelines and work instructions so that they will not jeopardize the safety and security of the plant and its workers. This HSE Plan will likewise provide them guidelines on emergency procedures and response and emergency communication.

2. COMPANYS RESPONSIBILITIES

Agility is responsible for establishing and maintaining safe and healthy work conditions and minimizing the environmental impact of its activities. Agility responsibility also encompasses handling of emergency situations

Company representative Ensure that all Contractors personnel attend the HSE Induction Programme. Receive, from the Contractor, and handle according to Agility Incident Reporting

Procedure any reports regarding incidents and/or unsafe acts.

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3. HEALTH SAFETY AND ENVIRONMENT (HSE) RULES & CONDITIONS FOR CONTRACTORS.

The Contractor shall study all the rules & conditions before actual start of work at site. The Contractor Representative shall ensure that his personnel are aware of these conditions given below for compliance. Safe Method of Working shall be agreed with the Agility Co-ordinator / Representative at site before start of work. The HSE rules and conditions are given below:

4. HSE ISSUES FOR CONSIDERATION

Contractors are required to develop their own HSE Management System. The contractor HSE management system shall be in proportion to the risk encountered during a contract period, so as to reduce the risks to As Low As Reasonably Practicable (ALARP). The adequacy and effectiveness of the HSE management System is dependent on the extent of risks the Contractor encounters during the entire duration of contract.

5. CONTRACTORS RESPONSIBILITIES:

The contractor is responsible to make sure that its employees, working at Agilitys premises, shall follow all instructions given and report any noticed shortcomings or incidents/accidents. Before commencing the work, the contractor shall develop a method statement and an HSE plan.

5.1 HSE plan

The Contractor shall prepare detailed work execution plan and submit for approval to the Agility coordinator/representative on site before actual start of work operation. The outcome of the plan includes, but not limited to: Identification of Risks involved Preventive / Mitigating actions to be taken based upon identified risks Actions in case of emergency / accidents / near miss HSE Tours in the work area Short but frequent HSE meeting with their personnel and as deemed

necessary for Safe Work Plan Follow up of Work Progress How to handle deviations from the agreed plan The Contractor shall identify their representative with the responsibility for health, safety and environmental protection.

The contractor shall ensure that critical tasks are identified and method

statements are prepared to discuss in detail the methodology and techniques necessary to do the job in the safest possible manner.

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These method statements shall include all job sequences, procedures and instructions, calculations, plans and drawings and reference standards and codes.

These documents shall be reviewed by qualified contractor management

personnel and should be properly signed by an authorized contractor representative.

Contractor has to ensure that the method statement includes required HSE

precautions and Safe Work Plan.

Contractor personnel and equipment comply with the Contract HSE specific requirements. This involves but is not limited to:

Ensure that the contractor personnel coming to the plant are thoroughly

informed about the job, the risks involved and the required precautions. Ensure that contractor personnel fully know and understand Agility

procedures. Ensure that the equipment/tools brought in by the contractor fulfil Agility

requirements. Ensure that the required certificates are valid. This is applicable to

equipment as well as the competence of the workers. Ensure that the entire contractor workforce is properly informed with respect

to whom to contact and how to reach the contacts. Ensure that the commitments of Agility are carried out.

5.2 Employee details

The contractor shall provide details of employee to be contacted in the event of an emergency. Such details must be provided prior to arrival on Agility premises.

6. SAFETY & ENVIRONMENTAL PRECAUTIONS

6.1 Risk assessment/job safety analysis

The Contractor shall ensure that Task Risk Assessments (TRA) / Job

Safety Analysis (JSA) is conducted for all work activities in the project. Task risk assessments/ job safety analysis shall be prepared by a contractor

TRA/JSA team which will identify all possible hazards and risks associated with the works and recommends safety measures to minimize or eliminate the risks so that workers can do the job safely

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6.2 Contractor supervisor / First man

Inform the workforce thoroughly about the work, the identified risks and required/agreed precautions.

Ensure that personnel follow the agreed rules/regulations for the work. Follow the work plan and report any need of changes to the plan to company

representative before implementing such changes. Report any incidents/unsafe acts to company representative. In case of an emergency situation ascertain the work force follows Agilitys

Emergency Preparedness & Response plan

7. PERSONAL PROTECTIVE EQUIPMENT

Personal Protective Equipment (PPE) shall be in accordance with Agilitys requirements with respect to use and type for the designated work area and work execution. This includes compliance with national and international standards. PPE to be used by the contractor shall be stated in the contractors HSE plan and agreement has to be obtained from the company representative. The contractor personnel shall always wear the PPEs as appropriate.

The contractor shall ensure that all personal protective equipment under his

control conforms to the relevant BS, OSHA, ANSI or other equivalent.

8. WORK IMPLEMENTATION Implementation of the work shall follow the established plan. Should need for any change to the plan or additional work arises, the contractor shall inform the company representative. The new situation shall be assessed regarding risks and the corresponding preventive measures implemented before work is allowed to continue. Contractors supervisor or First man at the work place shall give thorough information regarding identified risks and agreed preventive actions to the workers. He shall also ascertain that the work is carried out according to Agilitys HSE requirements. Contractors supervisor/First man shall report any accident or near miss to the company representative, who is responsible to initiate remedial actions. The handling of the incident report shall follow Agilitys procedure for Accidents / Incidents Investigation & Reporting. In case of an emergency the contractors supervisor/First man shall report to the company representative and the contractor personnel shall follow Agilitys Emergency Preparedness & Response plan.

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9. DEVIATIONS FROM PROCEDURE

Deviations from the requirements of these terms and conditions or IMS policy and procedures are not permitted without a written waiver formally authorized and recorded.

10. SECURITY CONTROL

All contractor personnel must comply with the security regulations as applicable. Contractor personnel shall have access only to those areas that are necessary in connection with their work.

11. COMPLIANCE WITH STATUTORY REGULATIONS AND STANDARDS

Contractor shall carry out his work in accordance with relevant provisions of the statutory legislation including but not limited to:

11.1 Local legislation

Federal Law No.(24) for 1999 for Protection and Development of Environment.

Federal Environmental Agency (FEA) Regulations on Air Pollution Limits, Ambient Air Quality Standards, Noise allowable limits, Assessment of Environmental Effects, Handling Hazardous Materials & Wastes, Insecticides & Fertilizers, Protection of Maritime Environment & Protection of Natural Reservations.

Any other pertinent legislations / regulations.

12. COMPLIANCE WITH AGILITYS, IMS POLICY, PROCEDURES, SPECIFICATIONS, OPERATING INSTRUCTIONS, RULES AND CONDITIONS

Contractor employees shall at all time carry out his work in accordance to the IMS Policy and procedures.

12.1 Use of chemical

Contractor who proposes to use any hazardous chemical should first inform the Agility co-ordinator / representative along with the Material Safety Data Sheet (MSDS) and obtain approval in writing prior to its first use.

12.2 Operation of vehicles

Agility shall not tolerate breaches of statutory requirements. Wilful violation by contractor personnel in Agility premises can result in immediate removal of the negligent driver/personnel and replacement thereof with another person or even early termination of contract. Contractors motor vehicles shall only be parked in the places provided for the purpose. Working vehicles, trailers and other driven equipment are permitted to operate within the site on assigned areas only and shall not access other locations without written authority.

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All Vehicles shall be equipped with an efficient lighting, warning alarms and must be in a good condition. Personnel driving any vehicles shall be in possession of the appropriate and current UAE Driving license.

12.3 Traffic rules and regulations

Contractor drivers shall adhere to Agility speed limits when entering company premises.

Heavy/Light duty vehicle driving speed limit is 20 Km/hr.

12.4 Contractors equipment

Contractor is responsible for ensuring that their equipment brought to site conforms to acceptable standards of safety. Agility representative shall reserve the right to inspect the equipment and reject any equipment considered unsafe. Such inspections shall in no way limit the contractors responsibility for the operational safety of the equipment.

12.5 Environmental protection and waste disposal

Contractor shall pay due regard to environment by preserving air, water, soil, and animal and plant life from adverse effects of the activities performed by the contractor. In cases where there is possibility of discharge to the environment because of the specific contractor activities, the contractor shall provide details, as applicable, on: Air emissions /pollution Waste water discharges Wastes, if any, generated by the operations of the contractor Noise Any other parameter that has the potential for environmental impact Potential environmental impacts, if any Contractor shall provide adequate procedures for protecting and monitoring the environment and disposal of wastes prior to starting work on site.

12.6 Storage of flammable liquids and gases

Supplies of engine fuel, solvents, flammable liquids and gas cylinders etc. shall not be brought on site without prior agreement with the Agility HSE Officer. All stocks of flammable materials are to be stored only in places designated by the Agilitys HSE dept.

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12.7 Work above ground level

Contractors are required to take adequate precautions to protect personnel from injury due to falling objects in all instances where work is carried out above ground level. Adequate fall protection / safety harness / PPE for personnel working at heights shall be provided by the Contractor.

12.8 Utilities and services

Any connections or disconnection for the contractors use in the process area / restricted area shall only be made to electrical, water, air, gas, steam or any other utility installation and that too only with the written permission of the head of the department. Prior to use of any utilities, the contractor shall notify and obtain authorization from the operations department.

12.9 Isolation and de-isolation of electrical installations

Specific precautions shall be taken while working on live electricity. Permissions shall be taken from Agility representative for isolation and de-isolation of electrical installations prior to commencement of work. Agility representative should be notified immediately of any breakdown of, short circuit, or damage to any electrical equipment, cables or installations on the site.

12.10 Use of portable engines, vehicles / cranes

Prior to first use of ay such equipment the contractor shall notify and obtain authorization from the operations department.

12.11 Emergency

In the event of an emergency alarm being sounded, contractors shall proceed to the designated assembly point. During any emergency situation, the contractor personnel should follow the written emergency procedures as applicable for Agility.

12.12 Incident reporting Incident is defined as any event or chain of events, which has caused or could have caused injury, illness, and / or damage (loss) to assets, the environment or third parties. The contractor shall promptly provide notification to Agility co-ordinator / representative and to the relevant authority (as per the relevant local legislation) of any Incidents that occur at the work-site of the Contractor personnel who have assigned duties in Agility premises.

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12.13 Housekeeping Clean and tidy work environment shall be maintained throughout the work period, both in the actual work area and in or around any concerned buildings. Access ways, particularly fire exits, shall be kept clear at all times. Attempt shall be made to remove surplus or scrap material daily. At the end of each work period, the surplus or scrap materials shall be completely removed from the work premises. It is the responsibility of the contractor to make suitable arrangements for the disposal of surplus and scrap material.

12.14 Restricted / prohibited articles

The contractor shall ensure that their personnel do not carry any restricted / prohibited articles inside Agility premises.

12.15 Smoking regulations

Due to high risk of fire associated with the use of flammable liquids and gases, SMOKING is strictly forbidden in the Agility/Agility controlled premises other than designated arras.

12.16 Stoppage of work

Any Agility employee shall have the right to suspend the work being performed by a contractor at any time, if it is felt that the contractor has or is about to violate statutory, regulatory or any Agility procedures. The cost of such stoppages of work in this regard shall be borne by the contractor.

13. DEVIATIONS FROM REQUIREMENTS

Deviations from the requirements of this specification are not permitted without a written waiver formally authorized and recorded

Please sign one copy of this document and return it. This is to acknowledge that you will comply with the requirements outlined in this document and shall be responsible for any eventualities including fatalities due to non adherence of safety rules/ regulations and safe working practices.

I, _________________________________________________________________ in my capacity as _________________________________________; understand the requirements of this document & hereby declare my acceptance on behalf of M/s.____________________________________________ Company Seal:

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Signature: ________________________________ Designation: ______________________________

Date: ________ Place: ______________________ Name: ____________________________________ Company: _________________________________ Designation: ______________________________

Date: ________ Place: ______________________

sub contractor management procedure

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