Management of Nonconformance
Reporting (NCR)
QHSES-GEN-PR-00500.00 - Version: 3.00
VERSION
1.00
2.00
3.00
DATE
27.01.2021
08.10.2021
10.11.2022
HISTORY
New Document
No Content Change, References Updated and Added
Editorial Update
Approvers captured electronically.
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©2023 McDermott. All Rights Reserved.
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RELEASED TO ANYONE EXCEPT BY EXPRESS WRITTEN PERMISSION OF MCDERMOTT."
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Management of Nonconformance
Reporting (NCR)
TABLE OF CONTENTS
PROCESS MAP ............................................................................................................................................3
PURPOSE .....................................................................................................................................................4
SCOPE ..........................................................................................................................................................4
RESPONSIBILITIES .....................................................................................................................................4
GENERAL .....................................................................................................................................................4
01 - Report Noncompliance ..................................................................................................................5
02 - Validate & Issue NCR ....................................................................................................................5
03 - Review & Assess NCR ..................................................................................................................5
04 - Disposition & Approval ...................................................................................................................6
05 - Conduct Root Cause......................................................................................................................6
06 - Action & Verification .......................................................................................................................7
07 - Closure & Lessons Learned...........................................................................................................7
EXTERNAL LINKS........................................................................................................................................7
REFERENCES ..............................................................................................................................................7
TERMS & ABBREVIATIONS........................................................................................................................8
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Management of Nonconformance Reporting (NCR)
PROCESS MAP
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Management of Nonconformance
Reporting (NCR)
PURPOSE
The purpose of this procedure is to define the requirements for nonconformance reporting, management
of the corrective action(s), and performance of causal analysis to determine root causes and measures to
prevent reoccurrence.
SCOPE
This procedure applies to the identification, control, and disposition of all product or process
nonconformances at McDermott (MDR) operations, including projects, offices, facilities, and vessels.
This process is used to manage nonconformances issued internally within MDR and also to those issued
to Subcontractors or Suppliers. Nonconformances and or findings issued by the Client and or Third
Parties to MDR will be recorded and managed per this process.
This procedure does not apply to findings as a result of audits performed within MDR using the Intelex
system.
RESPONSIBILITIES
All Employees, Investigator, Manager, QHSES, Project Management, Quality, Health, Safety,
Environmental, Security, Responsible Person
GENERAL
A. A nonconformance may be issued for the non-fulfillment of a requirement based on the scope of
work, design criteria, including vendor manufactured products, codes, specifications, drawings,
regulations, or MDR procedure.
B. Items that have been tested, examined or inspected, and are discovered later not to meet
specified requirements will be considered nonconforming. If documentation or non-compliance
with a procedure or process renders an item unacceptable, it will be considered as a
nonconformance and will be controlled to prevent inadvertent installation or use.
C. Failure to rectify a nonconformance could lead to contract failures, costly damage to a project and
or MDR property, project delays, deterioration of the Quality products, MDR reputation, and client
dissatisfaction.
D. A product nonconformance is defined as a product, component, or deliverable that does not meet
the requirements.
E. A process nonconformance is defined as noncompliance to a documented process, procedure, or
plan.
F. Subcontractor nonconformances are addressed per the Project Execution Plan. The Project
Execution Plan details if the Subcontractor's nonconformance reporting process is applicable or if
the process will be managed per this procedure.
G. In addition to the responsibilities outlined in this procedure, the Business Line QHSES Directors,
Project Management, and Functional Manager have the following responsibilities:
I. Business Line QHSES Senior Directors are responsible for ensuring the availability of
resources, effective implementation of this procedure. They are also responsible for
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analyzing the nonconformance data, identify trends, and reporting to respective Business
Line Management, as well as the Global QHSES functions.
II. Project Managers and Functional Managers are responsible for supporting QHSES in the
review, disposition, communication, and correction of nonconformances. They will provide
the resources required to complete the approved disposition and actions associated with
the closure of nonconformances and the identification and implementation of action to
prevent reoccurrence.
01 - Report Noncompliance
A. All McDermott employees trained in NCR module of the Intelex system are required to report
nonconformances to their local QHSES representatives, this includes Quality, Health, and Safety,
Environmental, Security, and Training individuals.
02 - Validate & Issue NCR
A. The QHSES representative validates the report of noncompliance. They review the controlling
requirements and actual condition of the product or process to determine if the reported condition
is indeed nonconforming. A Nonconformance Report (NCR) is required to be issued if the product
or process is not in compliance with the requirements, ref. QHSES-GEN-WI-00500.01
Nonconformance Reporting (NCR) for entering NCRs in the Intelex system.
B. The NCR will include details such as a detailed description of the noncompliance, the original
requirement, a defect code, immediate action taken, recommended actions, and the person who
identified the noncompliance.
C. Product nonconformance's have hold tags or other means of identification and or segregation
implemented by the Project personnel. Hold tags are used to visually identify nonconforming
products, or potentially nonconforming product so that it will not be inadvertently used.
Segregation is achieved by placing the product in a designated location that will prevent its
unintended use.
D. The Project Management Team and or Client will be notified per the project and contract
requirements regarding notification of noncompliance. A project-specific work instruction may be
developed to detail the project's contractual requirements for the notification and communication
of nonconforming products or processes for the project.
03 - Review & Assess NCR
A. The responsible QHSES Manager reviews the draft NCR for clarity and completeness, assesses
the associated risk(s), and assigns a person responsible for the disposition of the NCR, refer to
QHSES-GEN-WI-00500.01 Nonconformance Reporting (NCR) for details on how to execute these
tasks in Intelex.
B. The individuals assigned to complete the review vary by location and are based on the type of
NCR issued; typically, the assignments are as follows:
I. Quality NCR reviewed by Quality Manager
II. Health, Safety, and Security NCRs reviewed by HSE Manager
III. Environmental NCR review by Environmental Manager
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C. The responsible QHSES Manager evaluates the nonconformance for its impact on schedule,
potential hazard, and reputation for example. A risk assessment is conducted using QHSES-GENFM-00200.01 QHSES Risk Matrix. Medium or high-risk NCRs require a Root Cause Investigation
to be conducted by trained root cause practitioners, while low-risk nonconformance's only require
the responsible QHSES Manager to perform a causal analysis to identify the root cause factors.
Refer to QHSES-GEN-WI-00500.01 Root Cause Analysis for details on managing medium or
high-risk NCRs and QHSES-GEN-WI-00500.02 Causal Analysis for instructions on entering a
Causal Analysis in Intelex.
D. Actions identified to further support the containment, correction, implementation of disposition of
the NCR may be drafted by the QHSES Manager.
E. The responsible QHSES Manager identifies the person responsible to provide or obtain the NCR
disposition. A disposition is the approved action(s) to be taken to correct the nonconformity.
04 - Disposition & Approval
A. The Disposition Responsible Person is any MDR employee responsible for the identification and
correction of the nonconformance. The individual is assigned by the responsible QHSES Manager
with support from the Project Management Team and or Functional Management and typically
represents the function that owns the controlling document.
B. Disposition approval(s) may be required by others such as the Client before the implementation of
the actions associated with the correction of the nonconformance. Reviews may also be
conducted with the Project Management Team, Functional Manager(s), Client, and or a Team
may be created to support the final disposition of the nonconformance and establishment of
corrective or preventative actions. It is the responsibility of the Disposition Responsible Person
and the responsible QHSES Manager to ensure engagement by all applicable stakeholders as
required.
C. The Disposition Responsible Person will draft or obtain the disposition and action(s) required to
correct the nonconformance. The product nonconformance disposition may be recorded as one of
the following:
I. Use as Is, where the nonconformity will not be corrected or changed;
II. Rework, where the non-compliant conditions are corrected;
III. Scrap, where the product is removed or disposed of, and the product is produced again;
IV. Return to Supplier, where the product is returned to the supplier
D. Process nonconformances are recorded as Use as Is disposition.
E. Upon final approval of the disposition and proposed actions, the Disposition Responsible Person
assigns the action(s) with completion dates to the responsible person(s).
05 - Conduct Root Cause
A. The Investigator will complete a Root Cause Analysis per QHSES-GEN-PR-00250.00 Root Cause
Analysis. The identified root causes will be recorded in the NCR record / report with a copy of the
investigation report.
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B. As required by QHSES-GEN-PR-00250.00 MDR’s Root Cause Investigation Tool – COMET, will
be used for QHSES medium and high risk event RCAs. Trained COMET Practitioners are the only
personnel authorized to conduct a RCA utilizing COMET. These are conducted per the COMET
Incident Management Standard.
06 - Action & Verification
A. The Responsible QHSES Manager will verify the completion of all actions, causal analysis, and
root cause investigation. Verification is conducted to ensure the following:
B. Action(s) will have all related documentation associated with the closure and work performed.
C. The root cause(s) for all NCR risk types are recorded from either the causal analysis or the root
cause investigation.
D. Further preventative actions are not required to prevent reoccurrence.
E. PMT, Client, and or other relevant stakeholders are notified of completion per requirements or as
applicable.
07 - Closure & Lessons Learned
A. The QHSES Manager Responsible in collaboration with the PMT and Functional Management to
agree, if a Lesson Learned is required to be recorded and managed in the Lessons Learned
Systems. Refer to QHSES-GEN-PR-00900.00 Lessons Learned Process and QHSES-GEN-WI00900.01 Lessons Learned - Intelex Work Instruction.
B. Refer to QHSES-GEN-WI-00500.03 Action Management in Intelex and QHSES-GEN-WI00500.04 Audit Management in Intelex for action and audit instructions in Intelex and QHSESGEN-WI-00500.05 Inspection Intelex Work Instruction for Instructions on how to complete an
inspection in Intelex.
EXTERNAL LINKS
Name
Description
REFERENCES
Document Number
QHSES-GEN-FM-00200.01
QHSES-GEN-PR-00250.00
QHSES-GEN-WI-00500.01
QHSES-GEN-WI-00500.02
QHSES-GEN-WI-00500.03
QHSES-GEN-WI-00500.04
QHSES-GEN-WI-00500.05
QHSES-GEN-WI-00900.01
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Name
QHSES Risk Matrix
Root Cause Analysis
Nonconformance Reporting (NCR)
Causal Analysis
Action Management in Intelex
Audit Management in Intelex
Inspection Intelex Work Instruction
Lessons Learned - Intelex Work Instruction
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TERMS & ABBREVIATIONS
Term / Abbreviation
Causal Analysis
Correction
Disposition
Responsible Person
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Description
The review and determination of the root causes of a
problem.
Action taken to eliminate a detected nonconformity, based on
approved disposition.
Approved action to be taken to correct the nonconformity.
Representative of the Function that owns the controlling
document for the non-conformance.
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