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BN-CO-107 Standard Procedure for Material Control and

Warehousing

Table of Contents

1. Introduction
2. Receipt of Material
3. Material Checking
4. Daily Material Receiving Record
5. Material Receiving Notice (MRN)
6. Equipment not Completely Acceptable
7. Material Delivered to Third Parties
8. Material Certificates
9. Material Certificate Register
10. Material Receiving Notice Register
11. Over, Short and Damage Report
12. Over Short and Damage Report Register
13. Recording of Material Stocks
14. Storage of Material at Site
15. Material Issue at Site
16. Access to Company Warehouse
17. Outshipment of Materials - Outshipment
18. Out-Shipment Report Register
19. Other Material Registers
20. Warehouse Purchase Order and Requisition Files
21. Vendors Cards
22. Disposal of Surplus
23. Scrap Control and Disposal
24. Special Piping Materials
25. Equipment Protection During Construction
26. Q.C. Procedure
27. Flow Scheme Material Handling Procedure
28. Material Control by Means of Computer (Piping)
29. Attachment summary

Material Control and Warehousing

1. Introduction

The purpose of this section on material control and warehousing is to define the standard procedure for receipt, checking,
storing, protection and issue of materials for construction as well as to outline the administrative procedures for material
control. In addition a procedure is included for piping material control by making use of a computer.

The procedures in this section are written for a fairly large job. On smaller jobs, there may not be the same numbers or titles
of personnel available as are depicted here. Nonetheless, the same administrative and operating procedures must be
followed unless the Project Procedure Manual calls for something different, or if permission is received from Home Office
Construction Department to vary from the procedure.

2. Receipt of Material

Prior to arrival of material on site, "advice notices" or other shipping notifications will be received by the Material Supervisor.
He will record the volume and nature of the shipment and assign a storage location. These documents will be transmitted by
the Material Supervisor to the Warehouse Supervisor with a copy to the related subcontractor(s) (so they can arrange for the
off-loading facilities).

Upon arrival, the material is off-loaded onto the foundation or at the storage location previously determined, in the presence
of one or more checkers.

Whenever material arrives on site without advance notification, the Material Supervisor will (if necessary in cooperation with
the Project Construction Manager), allocate storage and unloading location without any delay, to avoid demurrage on
vendors transport.

All truckdrivers will be directed by the guards to report to the warehouse first. If material is to be unloaded at a point other
than Company Central Storage the Warehouse Supervisor will direct the trucks to the off-loading location. A Material
Checker must be present during off-loading. Truckdrivers delivering a large piece of equipment will be met at the gate by
warehouse personnel to guide them to the designated unloading area.

3. Material Checking

The shipment must first be checked to see whether it conforms with "Packing Lists and the Marking, Shipping and Invoicing
Instructions" issued to vendors by the Home Office Procurement/Shipping Department, being a part of the Purchase Order.
Also the Purchase Order, Purchase Requisition plus attachments for specific instructions on loading, unloading, delivery,
required official documentation, material certificates, etc., must be checked. On some projects a Purchase Order has been
placed with a Shipping Agent, to what extent the Shipping Agent is involved must also be checked.

If the shipment consists of unpacked goods, such as structural steel, pipe, etc., each bundle or piece is checked off the
carrier by the Checker. The same applies to boxes, crates or other packed goods.

The Checker signs for the goods that are actually received, and not necessarily those shown on the delivery document.

Whenever a subcontractor receives Material/Equipment directly, then a copy of the delivery ticket signed by an authorized
subcontractor's representative must be retained by Company's Warehouse Supervisor and all administrative work performed
as if Material/ Equipment was received in Warehouse and issued to Subcontractor.

If it is not possible to check materials during off-loading the Material Checker signs carrier delivery slip for "Material received
- unchecked". Materials must be carefully checked as to quantity, specification, and the condition, immediately after receipt.
Before signing carrier's freight bill, the Checker should count the number of pieces received and examine for evidence of
visible damage. Boxes, crates, and cartons should be carefully inspected before taking delivery. If material is received
damaged or not in accordance with packing list or freight bill the delivering carrier should be requested to make inspection of
damage or discrepancies, and proper notation must be made and acknowledged by carrier on original and copy of freight bill
or packing list.

If concealed damage is discovered at a later date, the carrier should be notified immediately and requested to make an
inspection. Materials involved in any claim should be set aside and redtagged until inspection is completed and liability has
been determined. A signed record is to be drawn up on the result by the parties concerned and an "Over Short and Damage
Report" be made. In the event that the vendor is not responsible for safe custody of goods during transit, claims shall be
processed against the carrier.

The Material Checker is to acknowledge the receipt of the goods only by signing the carrier's copy of delivery tickets
together with the copy for warehouse records, showing date of receipt and storage location ("Warehouse row G bin 26" or
"Material yard row B").

The Material Checker then checks the material thoroughly against the requisition and the relevant Purchase Order to
ascertain that the material meets the specifications and is correct in quantity.

If there is any doubt as to whether or not specifications are being met the Material Checker must report this to the
Warehouse Supervisor for his action.

Upon receipt as outlined above, the material will be tagged to the extent necessary, reflecting P.O. number and item number
and then stored in the allocated location.

All small loose parts such as gaskets, packing rings, bolts, lubricators, gauges, gauge glasses, dripwells, ink, charts,
adjusting pins/keys, couplings, spare parts, etc., delivered as part of equipment, should be stored in bins in a separate
location in the warehouse and clearly tagged with the item number and P.O. number of the equipment.

Any drawings, material certificates, catalogues, operating instructions and manuals relating to equipment are to be marked
with equipment and P.O. number and turned over to Warehouse Supervisor for transmittal to the Site Engineering
Department.

When material arrives at site for which no Requisition or Purchase Order is available, the Material Checker reports this to
the Warehouse Supervisor who in turn checks with the vendor, Home Office Purchasing Department, or the Field Buyer to
see whether material should have been received. If in order, a Purchase Order number should be obtained.

Upon completion of the above exercise, the Material Checker will turn in delivery tickets, freight bills, etc., to the Warehouse
Administrator for compiling a Material Receiving Notice. When a carrier demands freight charges for goods that have been
ordered on "free at site" delivery, the freight should be paid from Petty Cash Funds and the Vendor backcharged via Project
Accounting. This procedure is outlined in the Accounting Procedure.

4. Daily Material Receiving Record

(Form BN-UC 17 Attachment 1)

The Material Administrator will enter all materials received (from information on freight bills or packing lists), in a Daily
Material Receiving Record DMRR immediately after receipt.

This information should be available from hour to hour for the benefit of the construction forces.

Copies of this report will be distributed before 09.00 hours the day after the receipt of materials at site. The description of
materials received will be in abbreviated form. Distribution of the DMRR will be in accordance with the "Document
Distribution" or "Construction Coordination Procedure".

5. Material Receiving Notice (MRN)

(Form BN-UC 15 Attachment 2)

If no shortages, damages or discrepancies are found, a Material Receiving Notice (MRN) is then prepared to acknowledge
the receipt of the material against the relevant Purchase Order. For materials arriving at site not covered by Requisition or
Purchase Order a MRN should be made, after obtaining a Purchase Order number, with note in the remarks column "as no
P.O./Requisition is available we are listing materials as delivered to site". After receipt of P.O. and requisition, material
should be checked against these documents and a revised MRN issued, if required.
Material Receiving Notices must be issued and distributed without delay so that payment may be made and advantage can
be taken of any terms of payment.

For Field Purchase Orders the requisition number should be noted on the MRN. If an Over Short and Damage Report is
involved the Over Short and Damage Report number must be noted on the MRN.

A separate MRN must be used for each shipment

Two or more shipments from one vendor must not be combined, even if they are received the same day and are applicable
to the same order. Materials from two or more packing lists must not be combined on the same MRN, even if received on
the same freight bill. Generally, vendors invoice for each shipment or packing list separately and the Material Receiving
Notice is needed to support each invoice.

As Material Receiving Notices are made, the requisition or Purchase Order is to be marked up to reflect receipt of the
material.

The exact storage location is to be noted on the MRN. This document is used to update the stock control system.

When the material received must be inspected by a specialist before an MRN is issued, the Warehouse Supervisor will send
an equipment check sheet to the appropriate specialist (Pumps, Compressors, Heat Exchangers, etc., Electrical and
Instrumentation). A copy of this check sheet must be sent immediately to the Home Office (Expediting Department and
Accounting Department). This advises them that material has arrived on site and that a MRN will be issued as soon as
inspection is done. After the specialist has inspected the equipment (which must be done within three working days), the
check sheet is returned to the warehouse and a MRN issued immediately.

When goods being received are fully listed or described upon the packing list, this packing list can be used as an attachment
instead of relisting them all on the MRN.

The Warehouse Supervisor is responsible that the MRN is checked carefully, location is given, etc. All Material Receiving
Notices will be signed by the Warehouse Supervisor.

Material Receiving Notices are printed in blocks with a white original, and colored copies, and are to be distributed in
accordance with the "Document Distribution List".

6. Equipment not Completely Acceptable

Occasionally a piece of equipment is received on site with discrepancies which involve correction costs of a minor nature
compared with the total Purchase Order value of the item.

So that Company or Client may take advantage of discounts available for quick payment and also in order not to antagonize
vendors by withholding payment of a large sum because of comparatively minor discrepancies, a "partial MRN" will be
completed with the details of the discrepancy stated on an Over Short and Damage Report (OS&D Report) with some
indication as to "cost to field" of rectification. This enables the Home Office Purchasing Department to resolve with the
Accounting Department how much of the vendors invoice should be paid.

The Backcharge to Vendor procedure will be followed to ensure that Company does not absorb any cost relative to
rectification.

7. Material Delivered to Third Parties

When materials are delivered by a vendor to third parties (e.g. motors to pump vendors, panel mounted instruments to panel
vendors etc.) the items are received on site "built together". An MRN for each separate component must be issued, e.g. one
for the motor and one for the pump.

8. Material Certificates

Piping Materials

Each delivery of piping materials, authority and non-authority, will be accompanied by the proper material certificates.

The Material Checker will check the materials against the certificates. Any discrepancies found on manufacturer's symbol,
heat numbers, etc., will be notified to the Materials Supervisor immediately for action via the H.O. Inspection/Expediting
Department.

An O.S.& D. Report will be issued recording the certificate and/or material discrepancies. Materials are stored in a separate
location and labelled with the corresponding O.S.& D. Report Number.

The O.S.& D Report is cleared upon receipt of the correct certificate or upon replacement of the material as applicable.

Under no circumstances will materials be released for construction unless the correct certificate is available.

9. Material Certificate Register

The register will show:

Company Certificate Number


Fabricators Code
Charge Number
Short Material Description
Schedule/Pressure Rating
Size
Quantity
Any other information required by contract

On completion of the project, Home Office will produce a certificate register following Client requirements from data
accumulated from the material certificate register.

10. Material Receiving Notice Register

(Attachment 2A)

An MRN Register will be maintained by the Warehouse Supervisor.

This register must show:

MRN sequence number.


Date materials received.
P.O. number.
Vendor.
Material Description.

11. Over, Short and Damage Report

(Form BN-UC 16 Attachment 3)

In all cases of materials damaged, lost in transit, short or over shipped by vendor, notation must be made on the Material
Receiving Notice and Over, Short and Damage Report (OS&D Report) completed by the warehouse.

It is imperative that a clear cross-reference is made, i.e. Material Receiving Notice number on Over Short and Damage
Report and Over Short and Damage Report number on Material Receiving Notice.

In the remarks column of the Over Short and Damage Report, a note must be made as to the corrective action to be taken.
Company Home Office Procurement/Expediting Department is responsible for this action for Home Office Purchase Orders,
including update of Computerized Material History file if applicable.

In the case of an overshipment on a Home Office Order, this form advises Home Office if the overshipped quantity can be
used by field or if it should be returned to vendor for credit.

Field makes no disposition of this material, either as to use or return until advised by the Home Office. If to be returned, the
Home Office Expediting Department will secure shipping instructions from the vendor and advise the field by means of an
AVO or telex authorizing shipment.

In some cases, it will be the responsibility of the client to decide if overdelivered items can be accepted. In such cases an
Over Short and Damage Report is not required. The Client approves the Material Receiving Notice which should state
"Overdelivered quantities will be accepted by Client".

When a shipment from vendor is short, the Over Short and Damage Report advises Home Office whether or not materials
are needed and the Home Office Expediting Department takes the necessary steps to secure materials or credit from the
vendor. If the shortage is caused by loss in transit, and the material is not urgently needed, action should be withheld for a
reasonable length of time to allow the carrier to attempt to trace and locate lost items.

When materials/equipment are received damaged or not according to specification, a copy of the O.S.& D. Report is
forwarded to the Site Engineer for the issue of a Non-conformance Report.

When materials/equipment are received damaged, a copy of the freight bill or packing list with acknowledgement of the
carrier (see Item 3.0 Material Checking) should be attached to the Over Short and Damage Report.

Proper notations on Over Short and Damage Reports advise Home Office of all contingencies involved, what action is
needed, and whether action is up to the Home Office or Field Office.

Claims for concealed damage can be very troublesome and the importance of careful checking as soon as possible after
receipt of material at site cannot be over-emphasized.

Whenever an Over Short and Damage Report is cleared, a Material Receiving Notice should be issued covering clearance
of the Over Short and Damage Report with reference to both the Over Short and Damage Report and the Material Receiving
Notice on which the discrepancy was originally reported.

If claims on vendors or carrier involve repairs by field forces (after authorization by the Project Construction Manager or
Home Office A.V.O.), costs of materials, equipment and labor must be accumulated and included in a claim (see
Backcharge Procedure).

Over Short and Damage Reports shall be distributed in accordance with the "Document Distribution List" or "Construction
Coordination Procedure".

12. Over Short and Damage Report Register

(Form BN-UC 22 Attachment 4)

The purpose of the register is to maintain a record of all Over Short and Damage Reports to ensure that the Home Office
Expediting and Accounting Departments are informed of all reports.

This register shall be maintained by the Warehouse Supervisor. Once a month a listing of all open Over Short and Damage
Reports shall be mailed to the Home Office Expediting Department with a copy to the Project Construction Manager (and,
when required, to the Client's Resident Engineer).

All claims on carriers or vendors should be controlled by assigning a Backcharge number and recording it in the Backcharge
Register.

Over Short and Damage Report Register

(Form BN-UC 22 Feb. 80 Attachment 4)

Register will show:

Over Short and Damage Report sequence number.


Date.
Purchase Order number.
Material Receiving Notice number.
Vendor.
Description.
Material Receiving Notice clearance number.
Remarks.
Non conformance report, if relevant.

13. Recording of Material Stocks

(Form BN-UC 46 Attachment 5)

All materials received shall be entered on Material Stock Record Cards, which reflect particulars as shown on the Material
Receiving Notice, Over-Short Reports and Purchase Orders. The complete description of the material, item number and the
exact storage location shall be included.

14. Storage of Material at Site

Upon receipt, all material not directly delivered to the works or Pipe Fabrication Shop, should be stored either in the
warehouse or material yard.

All small materials, instruments, electrical material, tubing, small pumps, etc., must be stored inside warehouse.

All large pipe, fittings, valves, etc., will be stored in the warehouse or yard. Materials will not be stored directly on the ground.
An underlayer of wood or suitable material should be used.

All pipe must be stored by type, size and schedule on sleepers with at least 10 cm slope for water drainage and pipe ends
(plain or threaded) checked for satisfactory caps/protection. If not already done by vendors, the Warehouse Supervisor is
responsible that all material stored either in the warehouse or yard is properly marked and color coded in accordance with
the specification.

Hours and materials spent on this marking and coding shall be reported by the Materials Supervisor for backcharge
purposes.

This color coding must be maintained throughout the storage/ construction period. Each member of the Material Department
and Specialist Engineers will be supplied with a copy of the marking and color coding procedure to facilitate the application
of correct marking upon the material when received and the traceability of the material throughout the construction period.

Corrosion protection is either the Subcontractor's or the Warehouse responsibility. Warehouse Supervisor shall check
regularly that this work is properly done.

The Materials Supervisor will check on a regular basis the handling and storage of the materials at the subcontractor's shop.

15. Material Issue at Site

(Form BN-UC 74 Attachment 5A)

All materials will be drawn from the warehouse on a Material Requisition which must bear the signature of the
Subcontractor's authorized Supervisor or the Company Specialist.

A list of authorized signatures should be kept and should show the following:

Name of employee (Printed).


Function (Title).
Signature Specimen.

A block of numbers shall be allocated to each subcontractor. Material requisitions shall reflect relative item numbers,
quantity, description, drawing and/or Isometric number, and area and/or unit number. These requisitions shall be issued in
duplicate, the original for the warehouse, the copy for retention by the drawer of the material.

Material requisitions must be checked carefully before material is issued to assure that specific allocation is given, and that
subject material has not been previously issued.

Whenever material has been previously issued, the Material Administrator should write on requisition: "Material already
issued, see previous requisition number . . . . . . . . .".

Material should never be issued twice. If delivered by error, the Warehouse Supervisor will collect this material from the
Subcontractor.

The Warehouse Supervisor will receive from the Site Engineer a copy of all piping iso/drawings and their revisions. All issue
of material must be marked with red pencil on these drawings. This is for control purposes and to ensure that no material
has been issued twice.

Upon receipt of a revision to a drawing or Isometric materials have to be checked against the previous issue of the
document. In the event more materials are required, Company should prepare this material and inform the Subcontractor
accordingly. Where materials have been deleted, the Subcontractor shall be requested to return this material to the
warehouse if not necessary for drawings/ requisitions in hand for issue. The Subcontractor is informed in writing when
deleted materials from one drawing/requisition have been allocated to another drawing/requisition.

After the relevant materials have been issued, the material requisition is posted in the Materials Stock Record Card.

All requisitions received in the warehouse must be filed consecutively according to requisition number and per
subcontractor. All finals must be filed together. All partial requisitions must be filed separately.

If materials requested on a requisition are not in stock, the Warehouse Supervisor should check if they are on order. If this is
the case, the requisition should be filed in an "outstanding requisitions" file. This file should be periodically checked to see if
any requisitions can be further completed. If outstanding materials are not on order he will send a photostat copy of the
requisition to the Materials Supervisor for further action. Where piping material is required, other than for an iso/ drawing,
e.g. for temporary lines, the requisition shall be approved by the Project Construction Manager or his delegate.

Under no circumstances will material be issued from the warehouse or storage yard to Subcontractor without the presence
of a member of Company's Material Department and use of all required material control documents.

16. Access to Company Warehouse

The following personnel have access to the Company Warehouse at all times during working hours. They are requested to
notify the Warehouse Supervisor before entering the Warehouse:

Project Manager
Project Construction Manager
Area Superintendent
Site Engineer
Office Manager
Material Supervisor
Safety/Security Officer
Construction Specialist
Client's Representatives

All other personnel entering the Warehouse must be accompanied by the Warehouse Supervisor or Material Administrator
or any one of the personnel mentioned above.

17. Outshipment of Materials - Outshipment

Report (OSR)

(Form BN-UC 18 Attachment 6)

Materials which are shipped from the job site, must be covered by an Out-Shipment Report.

This Out-Shipment Report must reflect the Out-Shipment Report sequence number, quantity, item number and full
description of the material, together with the Purchase Order Number upon which the material was originally received.

Full details of consignee's name and address, reason for the shipment and method of shipment must be given. Out-
Shipment reports will be signed by the Materials Supervisor. The Client may request to countersign these reports. The
carrier must sign legibly for receipt of the goods and insert the registration number of the vehicle carrying the goods.

Out-Shipment Reports must be posted on the Materials Stock Record Cards. If an Out-Shipment Report involves material
being sent out for repairs or replacement, a Material Receiving Notice must be made when material is returned/replaced with
a note:

"This MRN clears OSR no . . . . . . . .. partially/in its entirety", whichever applies. Material Receiving Notices for clearance of
Out-Shipment Report must be noted in the Out-Shipment Report Register.

Subcontractor's property which is moved from the site on their own Out-Shipment form must first be checked by the
Company Warehouse, and a properly completed Company Out-Shipment report must be attached as cover sheet.

The Materials Supervisor will sign Out-Shipment Report after obtaining approval from Project Construction Manager.

Materials on Company Home Office Purchase Orders should be out-shipped only after obtaining AVO or telex approval from
the Home Office Expediting/Purchasing Department. An Out-Shipment Report Register will be maintained in Warehouse by
the Material Administrator.

18. Out-Shipment Report Register

(Form BN-UC 19 Attachment 7)

This register will show:

Out-Shipment Report sequence number.


Date.
Name of consignee.
Description of material.
Remarks (used also for Material Receiving Notice clearance number).

A copy of the Out-Shipment Report must be mailed to the vendor. Further distribution of Out-Shipment Reports should be
made in accordance with "Document Distribution" or "Construction Coordination Procedure".

19. Other Material Registers

Besides a register for Material Receiving Notices, Out-Shipment and Damage Reports, Out-Shipment Reports, the
Warehouse will maintain the following registers:

19.1 Cable Reel Register

(Form BN-UC 13 Attachment 8)

This register will show a listing of all cable reels received at site. Including the name of the vendor, size and quantity of
cable, date received, Purchase Order number, Material Receiving Notice number and cable reel number, and whether
returnable or not. Whenever empty reels are returned, the Out-Shipment Report number and date of return must be posted
in this register.

19.2 Oxygen and Acetylene Cylinder Register


Only when purchased by Company.

19.3 Gasoline and Oil Drum Register - Returnable Drums

Only when purchased by Company.

19.4 Special Container Register - Returnable Containers

In some cases, materials are received at the job site in containers for which special charges are made. These are charges
on invoices for material involved and credited on return. In other cases, they are charged only if not returned within a
reasonable time to vendor. Those items received on Home Office Purchase Orders will be covered by an AVO from Home
Office Purchasing Department advising shipping instructions and authorizing return when empty.

Items on Field Purchase Orders should be reported by Materials Supervisor to Job Buyer.

19.5 Rail Car Log Book

When materials or equipment will arrive on site or nearby by rail, a rail car log book should be used that will show rail car
number, time and date of arrival. After the railroad company is advised that the rail car is emptied and ready for
transportation the actual time and date the car is taken away by them should be noted in the log book. In addition, the log
book will show the Purchase Order number and a brief description of the material received.

20. Warehouse Purchase Order and Requisition Files

The Material Administrator shall maintain Home Office Purchase Orders, Requisitions, Field Purchase Orders and
Requisitions files. The right hand side of the folder will contain the requisition, Purchase Orders and Amendments. The left
hand side of the folder will contain Material Receiving Notices, Out-Shipment Reports, Over Short and damage Reports,
packing lists and all other documents pertaining to the Purchase Order.

The Purchase Order folder is an "open file". When the final Material Receiving Notice has been issued, Purchase Order files
will be marked "Complete" and transferred to another section of the filing cabinet.

21. Vendors Cards

The Material Administrator will maintain for Field and Home Office Purchase Orders a card system indicating names of
vendors, description of material and Purchase Order number.

Cards will be filed alphabetically. This card system helps to locate Purchase Orders if only the vendor's name is known.

22. Disposal of Surplus

It is our normal practice to dispose of all surplus material as soon as practical.

The procedure for disposing of this material will vary depending upon the type of contract. If materials were purchased on a
reimbursable contract all materials actually belong to the Client, and the Project Construction Manager disposes of the
material in accordance with the Client's wishes as expressed through their field representative.

However, if the Client requests Company to dispose of the material, this will be accomplished as stated below:

Approximately at 85% of job completion all surplus material is to be inventoried.


The inventory will list the item number, Purchase Order number, vendor and description and value. Three copies should be
mailed to Home Office Purchasing Department. The Client should also be contacted to determine if they are interested in
acquiring the materials.

The Purchasing Department will investigate possibilities for disposal of the material and subsequently advise field as to what
action is to be taken. After the first surplus list has been issued, revisions to this list must be issued regularly.

All shipments of material from the job shall be covered with an out-shipment report.

23. Scrap Control and Disposal

23.1 Scrap Control

Sub-contractors are responsible for seeing that economical use is made of piping material with a minimum of scrap. All
material moved to the scrap location must be inspected by the Piping Specialist. No alloy material may be scrapped without
the permission of the Piping Specialist.

No fittings may be modified without the permission of the Project Construction Manager e.g. no. 90 elbows will be cut to
make 45 elbows. If for some emergency such a modification is made, the Company Piping Specialist must instantly notify
the Material Supervisor in writing giving full particulars.

In addition, if a repair or change is made, every effort must be made to return flanges and fittings to the warehouse. Flanges
in particular can be sent to an off-site machine shop for machining on an economical basis for later reuse.

Scrap collection locations will be available at site. Subcontractors and the Company Piping Specialists will be responsible for
a weekly collection of scrap in their respective areas and dumping at the indicated scrap fill locations. All alloy material shall
be kept separated by types.

23.2 Scrap Disposal

On a reimbursable job, scrap disposal will be discussed with the Client and actions to be taken incorporated in the
Construction Coordination Procedure.

On a lump sum job it is the responsibility of the Project Construction Manager to dispose of scrap in the most economical
manner and proper (auditable) records shall be kept.

24 Special Piping Materials

A separate storage area in warehouse and yard may be alloated to special piping materials. This decision is to be made by
the Materials Supervisor and approved by the Project Construction Manager.

Upon receipt, materials are thoroughly checked against the requisitions and the relevant Purchase Order to ascertain that
the material meets the specifications and is correct in quantiy.

Color coding is verified in accordance with proper specification. Paint shall be of good quality suitable for outdoor use, if not
suitable, remedial action will be taken immediately. Color coding will be checked on a regular basis and upgraded if
necessary.

Materials are checked against certificates, manufacturer's symbol and charge numbers are verified.

Taking into account the long delivery delay on most special types of material, no extra material, such as for field changes,
lost material by Subcontractor, etc. will be issued unless approved by the Construction Superintendent.

The Materials Supervisor will notify the Home Office immediately of the additional material requirement even though it might
be covered by contingency material.

Pipe Lengths

The charge number will be transferred as required by the specification or applicable authority. The stamping will be done by
an authorized representative from the Mechanical Subcontractor in accordance with the instructions of the Company Quality
Assurance Manager.

Material Administration

The material administration will be handled in the same manner as for other material.

25. Equipment Protection During Construction

25.1 General

This section covers the minimum requirements for the protection of equipment against deterioration from the time it is
received at the construction site until it is placed in operation. It should not be applied to equipment handling extremely high
purity products, where special instructions are required. In addition, additional or special procedures may be required to
protect equipment against more aggresive environments such as extreme cold or heat, saltwater, spray, wind blown dust or
sand. These additional requirements will be furnished in the "Construction Coordination Procedure.

It is assumed that materials and equipment are adequately protected for shipment and storage by the manufacturer in
accordance with Purchase Order specifications or manufacturer's standard practice.

If not protected by the vendor as specified in the Purchase Order, Company Home Office Procurement must be notified
immediately for the purpose of backcharging.

The field must then provide adequate protection.

Where proper protection is not evident, the field shall notify Company Home Office Procurement immediately and make
sufficient examination to ascertain that the equipment has not been damaged by the omission. Additional protective
measures specified by the equipment manufacturer shall be performed.

25.2 Documentation

Records shall be kept to document the protection given the equipment while the manufacturer's guarantee is in effect. These
records shall be kept from the date of arrival of the equipment at site, showing dates of application of services of each piece
of equipment.

25.3 Rust Preventives

The rust preventives referred to herein are RUST-BAN compounds. Some Clients may produce their own rust preventives,
in which case their equivalent preventives shall be used.

Preventive suppliers can give more information as to coverage, application temperature, method of application, drying time
and method of removal.

All interior and exterior surfaces shall be clean and dry before any rust preventive materials are applied. For cleaning of
surfaces mineral spirits or solvent shall be used. Kerosene or gasoline shall not be used as cleaning agent.

RUST-BAN 357

Reccommended for bearings and internal faces.

All rotating equipment protected by this compound, shall be turned over once per week, to keep bearings and other critical
surfaces coated. This rotating should be done manually. This must not be carried out with tools, which will damage or mark
motor shafts.

Drain water from all reservoirs once a month and fill up reservoir to the proper level. If the fluid becomes dirty or
contaminated water, reservoir shall be drained, flushed with solvent and refilled.

RUST-BAN 373

Recommended for exterior surfaces. This preventive has no lubricating properties, thus before placing protected part in
service, it should be removed from bearing surfaces, threads, or areas that come in contact with lubricants.

MOISTURE ABSORBANTS

Where internals, etc., would be very difficult to protect from rust, moisture absorbants are used for protection. When
equipment arrives at the site, the seals shall be examined and damaged seals repaired or replaced, and the absorbant
replaced, if necessary.

Seals shall be protected until the equipment is serviced for start-up.

Moisture Absorbants shall be renewed at time intervals as specified by the manufacturer.

25.4 Machinery

On receipt at the construction site, casing and internals are to be inspected through piping nozzles, etc., to see if rust
preventive has been applied. Protection to be done as follows:

Turbines, Blowers, Agitators, Gear Cases, Centrifugal Pumps and Compressors.

- Flush bearing brackets and gear cases with solvent until clean. Fill with RUST BAN 357 at least till the shaft and turn shaft
several times to apply a protective coat to the entire shaft and bearings.

- Clean shaft couplings and exposed machine surfaces and coat them with RUST-BAN 373.

- If a pump is shipped with mechanical seals installed, fill the stuffing box with RUST- BAN 357. When mechanical seals are
integral with the pump, and the pump is not protected by moisture absorbants or a blanketing gas, the entire pump should
be filled.

- Turbines shipped with carbon rings installed, fill seal chamber with RUST-BAN 357.

- Vertical pumps shall be filled with RUST-BAN 357 after they are moved to their service location.

- Intermediate shaft supports, if necessary, are to be provided to protect against shaft sag.

- Spare rotating elements are to be stored according manufacturers instructions.


25.5 Motors and Generators

Motors, designed for indoor use, and generators are to be stored indoors.
Motors, designed for outdoor use, can be stored outside free from ground with protective covering, permitting good
ventilation.
If space heaters are furnished within the units, they shall be connected to be continuous power supply of the proper rating,
when stored outside, or installed at their service location.
Brushes shall be removed from brush holders, and shall be stored in a dry place, where condensation will not occur.
Coat couplings and exposed machined surfaces with RUST-BAN 373.
Measuring and recording of insulation resistance values to be carried out as stated in the "Construction Coordination
Procedure".

25.6 Transformers

Transformers intended for outdoor installation can be stored outside.

Large indoor transformers may be stored outside, if raised above grade to prevent any damage from surface water and if a
shed roof and tarpaulin siding are provided.

Where units are supplied complete with insulation liquids/gases, these should be checked on arrival at site. If level or
pressure is not within vendor's tolerances, possible leaks should be located and rectified. Monthly checks on level/pressure
should be made and rectification work carried out when necessary.

Any separately supplied insulation liquid may be stored outside, without protective covering, if laid on their side at an angle
of 45, with the large bung downwards.

25.7 Switchgear, Starters and Control Equipment

Equipment shall be stored indoors in a dry, warm place where condensation of humidity cannot occur.

If high relative humidity or large, rapid changes in temperature are expected, heaters shall be used to maintain the
temperature of approximately 5C above minimum daily temperature.

If space heaters are furnished within the equipment, they shall be connected to a continuous source of power of the proper
rating.

25.8 Cables

Rotate reels of properly insulated lead sheathed cable 90 every two weeks to prevent migrating oil from collecting at low
points.

Measure and record gas pressure in low pressure gas filled cable when received and weekly thereafter.

If falling pressure indicates a leak in the cable, maintain same with dry nitrogen until leak is sealed.

25.9 Batteries

Batteries should be stored indoors in an inactive area to avoid accidental breakage. Batteries that have been shipped dry
and charged shall have the seals checked regularly and in case of damage, repaired according to vendor's instructions.

Nickel-cadmium and Lead-acid batteries that have been shipped dry do not require maintenance. For those shipped wet,
electrolyte levels should be checked and filled as required. These batteries should also be recharged tri-monthly. Watch for
over-charging.

25.10 Instruments

For instruments a warm, dry and vibration free environment in a secure under cover storage area is required.
Recommended environment conditions are temperature range of 15 to 30 and humidity between 30 to 40%.

Instruments can be stored in the above environment for up to four months in their shipment cases. Where cases/packing
have been opened the plastic coverings are to be retained and resealed in the manner they were shipped. Panels to be
stored in their shipping cases up-right until moved into the control house.

Instruments installed in outdoor locations shall be protected from weather and mechanical damage.

25.11 Piping

Any protective coatings/paintwork on piping shall be maintained throughout the storage and construction period, as well as
the colour coding on piping.

25.12 Flanges

Flanges from 2" and up can be stored outdoors on timber floor or palets.

All flange faces to be cleaned with a solvent if required and protective coating applied and maintained.

When machinal flange face is damaged, remedial work has to be carried out before use.

Flange facings with 125 RMS (for use with spiral wound gaskets) MUST be remachined before use, if damaged.

25.13 Valves

Manually operated valves from 2" and up can be stored outside, on a timber floor or pallets.

Large automatic control valves such as slide valves, motor operated valves may be stored outdoors, on timber floor and with
suitable covering over each valve.

Valves stored outdoors shall be inspected every two weeks and coating or rust preventive renewed if required. On arrival at
the site, when spot check reveals remove all flange covers, clean flange faces with solvent and coat with a rust preventive.
Inspect valve stems and valves internals. It necessary clean with solvent and apply rust preventive coating seat all manually
operated valves. Plugvalves and soft-seated ballvalves to be stored in open position. Valves to be stored with spindles in
vertical position.

Valve handwheels must not be used for lifting valves, slings etc. must not be passed through valve bore during handling.
Plug any open threaded connection.

Each valve shall be fitted with an aluminium tag securely attached with stainless steel wire.

Each tag shall be clearly stamped with the valve item number. Tags shall normally be closely attached to the gland bolting.
Tags on valves that do not have gland bolting may be attached to the handwheel or other appropriate locations. Tags shall
not be attached through boltholes of end flanges or where handling might be subject to damage or loss.

If not done so by vendor, warehouse to take action.


26 Q.C. Procedure

Reference should be made to the Field Construction Manual - Quality Control - Section 20, "Care and protection of
equipment during construction". If there is a difference in interpretation between this procedure and the one stated above,
the procedure which gives greater protection takes precedence.

27 Flow Scheme Material Handling Procedure

28 Material Control by Means of Computer (Piping)


28.1 The site computerized material Stock Control System is programmed for:

(a) Receiving of data from the Home Office main frame computer.

(b) Transmittal of data from the site to the Home Office main frame computer.

(c) Various Site Applications:

- Registration of certificates - update.


- Registration of material receipts.
- Material allocation per given drawing or batch of drawings.
- Production of material lists for issue of materials.|
- Automatic material stock level update.
- Registration of material issued per single item of a single drawing.
- Registration of material issued per given batch of drawings.

28.2 A telephone link between the Home Office main frame computer and the PC at the Site Office will be established.

Data received from the Home Office:

- purchase orders information on a continuous basis.


- material requirements per isometric upon request from site.
- material description data.

Data transmitted to the Home Office:

- material receipts on a daily basis to complete the PMC procurement cycle.

28.3 Material Receipts

All data on receipts of material will be entered into the PC on a daily basis.

By entering this data the following occurs:

- stock levels are automatically updated


- a data file is written which is then transmitted to the Home Office via the link.

28.4 Certificate Register

The information on purchase orders transmitted by the Home Office is written automatically in the certificate data file.

The following additional data required to be entered:

- Company certificate number


- Charge number
- Quantity
- Vendors code
- Other number/codes required by contract.

28.5 Material Availability and Shortage

Data transfer on material take-off is requested from Home Office on a batch of drawings following the construction priority
schedule and following the backlog requirements of the Piping Prefabrication Subcontractor.

A "sample" report is run on the site PC that shows availability of material. This may be done per batch of drawings or for a
small group of drawings which could represent a particular piping system. This report will show those isometrics,
(prefabrication and/or erection) and Material Lists that can be met from the existing warehouse piping material stock.

The report will show Material Lists where only partial issue is possible. In these cases the missing material is highlighted.
This information is used as a guideline for priority expediting purposes.

28.6 Issuing of Materials

For isometrics indicating that materials are available on request, a Material List will be printed in duplicate which is used for
the issue of materials to the Subcontractor. The Subcontractor's authorized representative signs one copy for the receipt of
the material which is held in the warehouse file and one copy is held by the Subcontractor.

- The printing of the Materials Lists will automatically reduce the material stock levels in the PC.

The Material Lists may be requested:

- for prefabrication items only


- for erection items only

28.7 Issue of Extra Materials to the Erection Contractor and/or Returns of Materials to the Warehouse

The issue of extra materials on drawings for revisions, field changes, etc. will be done by means of a Foreman Requisition.
The Subcontractor signs copy of the Foreman Requisition for the receipt of the material. The Foreman Requisition is entered
in the PC to update the stock control system.

Materials returned to the Warehouse are done by a negative Foreman Requisition. The negative Requisition is also entered
in the PC to adjust the stock.

28.8 Material on Hold

It may occur that systems of high priority cannot be fabricated or erected due to missing material. The PC Material Control
System allows to put the part of the available material "on hold" in order that it is not allocated to a non-priority drawing. The
"hold" can be released if required.

28.9 Reports Available from the PC Material Stock Control System

- Material available overall


- Quantity of material issued/drawing
- Certificate allocation by given purchase order
- Certificate of allocation by given charge number
- Material shortage by given drawing number or per batch of drawings

28.10 Users Manual

Further details relative to the application of computerized (piping) materials control are given in a separate "Users Manual".

29 Attachment summary

1. DAILY MATERIAL RECEIVING RECORD


2. MATERIAL RECEIVING NOTICE MRN
2A. MATERIAL RECEIVING NOTICE REGISTER
3. OVER, SHORT AND DAMAGE REPORT
4. OVER, SHORT AND DAMAGE REPORT REGISTER
5. MATERIAL STOCK RECORD CARD
5A. MATERIAL REQUISITION
6. OUT-SHIPMENT REPORT

7. OUT-SHIPMENT REPORT REGISTER

8. CABLE REEL REGISTER

9. MATERIAL RECEIPT NOTICE

10. PICKING LIST

11. FOREMENs REQUISITION/PICKING LIST