Engineering Procedure 03 January 2023

SAEP-381
Project Quality Issue Escalation Process
Document Responsibility: Project Quality Standards Committee

Previous Revision: 18 May 2021 Next Revision: 18 May 2024

Contact: megraa0a Page 1 of 29
© Saudi Arabian Oil Company, 2023
Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024

Contents
Summary of Changes.................................................................................................... 3

1. Scope ...................................................................................................................... 4

2. Conflicts and Deviations .......................................................................................... 5

3. References .............................................................................................................. 5

4. Terminology ............................................................................................................ 6

5. Violations Categories .............................................................................................. 8

6. Instructions .............................................................................................................. 9

7. Responsibilities ..................................................................................................... 13

8. Cancelled Quality Notifications .............................................................................. 17

Document History ........................................................................................................ 18

Appendix A-1 – Minor Quality Issues Escalation Process ........................................... 19

Appendix A-2 – Moderate Quality Issues Escalation Process ..................................... 20

Appendix A-3 – Major Quality Issues Escalation Process ........................................... 21

Appendix B – Contractor’s Internal NCR ..................................................................... 22

Appendix C – Quality Issues Escalation Matrix ........................................................... 21

Appendix D – Examples of Violations and Escalation Steps ....................................... 22

Appendix E1 – Responsibilities for Escalation of Quality Notification (Major) ............. 25

Appendix E2 – Responsibilities for Escalation of Quality Notification (Moderate) ....... 26

Appendix E3 – Responsibilities for Escalation of Quality Notification (Minor) ............. 27

© Saudi Arabian Oil Company, 2023 Page 2 of 29

Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
Summary of Changes

Paragraph Number Change Type

Technical Change(s)
Previous Revision Current Revision (Addition, Modification,
(10 June 2018) (18 May 2021) Deletion, New)

1.2 1.4 Addition C1 projects are added

EK&RD and Project Sponsor are
5.0 4.1 and 4.2 Addition
added
SAEP-301, SAEP-380 SAEP-1150 &
4.0 3.1 Deletion
GI-0400.001 are removed
4.0 3.1 Addition SAEP-385 is added

4.0 3.1 Addition GI-0202.309 is added

5.0, 71.1,7.5.7,
8.2.4,8.2.5, - Deletion SAP is removed
8.7.3 & 9
Contractor INCR shall be categorized
7.3 6.3.2 Modification (Major, Minor or Moderate) in
accordance with paragraph 6
Remove role of IEU and add new
7.5.10 6.5.10 New paragraph pertaining to ID role after
final MCC signatory
7.3.4 Add roles to Project Inspection Senior
- New
7.3.5 Supervisor (PQM)
Add roles to Project Inspection Unit
- 7.4.5 New
Supervisor
- 7.7.5 New Add on-hold project

8.8 - Deletion Role of IEU is removed

Appendix D Appendix D
Modification Violation category changed to be Major
(item #11) (item #11)
Appendix D Appendix D
Deletion Delete Process-Related
(item #12) (item #12)
Appendix D Appendix D Add note: PQM has the option to
Modification
(item #17) (item #17) increase this category as MAJOR
Appendix D Appendix D Delete Weekly or monthly
Deletion
(item #24) (item #24)
Appendix D Appendix D Delete Weekly or monthly
Deletion
(item #25) (item #25)
Appendix E1, E2 & Appendix E1, E2
E3 & E3 New Project Sponsor is added

© Saudi Arabian Oil Company, 2023 Page 3 of 29

Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024

Scope

1.1 This procedure establishes the instructions for categorization and escalation of
unresolved quality issues in Saudi Aramco capital projects including delinquent
quality concern notifications starting from the project proposal phase all the way
to the final Mechanical Completion Certification Signatory or to the final closure
of all contractor and PID’s quality notifications.
Commentary Note: During the project engineering stages including the Project Proposal
and Detail Design phases, this procedure is applicable for the quality compliance with
the quality procedural requirements such as the approved contractor quality
plan/manual as well as the contractual quality obligations.

1.2 The purpose of this procedure is to:

1.2.1 Implement a consistent method for escalating quality issues including

Internal Non-conformance Reports (INCRs), Logbook Entries (LBEs),
Saudi Aramco Non-Conformance Reports (NCRs), Worksheets (WSs)
and Delinquent Worksheets (DWSs), as defined in Appendices A-1, A-2,
and A-3, “Quality Issues Reporting Process.”

1.2.2 Clearly define the corporate process for project quality issue escalation
including its documentation, requirements and definition of violation
categories, systems and procedures

1.2.3 Ensure roles and responsibilities for project quality issue escalation are
well defined and auditable.

1.3 The intent of quality issue notification is to report and record quality or technical
deficiencies, determine the root cause of the problem, record the actions taken
to correct non-conformities, avoid recurrence, and enhance overall project
quality.

1.4 This SAEP does not apply to:

• C1 projects managed by Proponent (Construction Agency) as defined in

SAEP-68.

• Escalation of non-conformities identified by Inspection Technical Support

Division (ITSD) during assessments of Operation Inspection Unit (OIUs)
in operating facilities.

• Deficiencies noted during internal assessments by the Inspection

Department.

• The categorization and the escalation of engineering review comments

managed by eReview System, Comment Management System (CMS),

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Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
and SAEP-303 (Engineering Reviews of Project Proposal and Detail
Design Documentation).

Conflicts and Deviations

Any conflicts between this document and other applicable Mandatory Saudi
Aramco Engineering Requirements (MSAERs) shall be addressed to the
EK&RD Manager.

Any deviation from the requirements herein shall follow internal company
procedure SAEP-302.

References

All referenced specifications, standards, codes, drawings, and similar material

are considered part of this Engineering Procedure to the extent specified,
applying the latest version, unless otherwise stated.

Saudi Aramco References

Saudi Aramco Engineering Procedures

SAEP-148 Mandatory Engineering Standards and Codes for

Non-industrial, Public, and Government Facilities

SAEP-302 Waiver of a Mandatory Saudi Aramco Engineering Requirement

SAEP-385 Preservation of Project Materials and Equipment

SAEP-1151 Inspection Requirements for Contractor Procured Materials and

Equipment

Saudi Aramco Engineering Standards

SAES-A-007 Hydrostatic Testing Fluids and Lay-up Requirements

Saudi Aramco General Instruction

GI-0002.710 Mechanical Completion and Performance Acceptance of

Facilities

GI-0202.309 Classification of Costs – Turnover Stage of Facilities

Other References

Saudi Aramco Standard Contracts

Schedule Q Project Quality Requirements

© Saudi Arabian Oil Company, 2023 Page 5 of 29

Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
Terminology

Acronyms

ACD: Agreed Completion Date- the date which the violation notification will be closed
upon completion of the required corrections and corrective actions for the reported
violation fully.

APM: Asset Performance Management

DWS: DELINQUENT WORKSHEET - Mechanism to escalate unresolved/overdue

Worksheets

CQP: Contractor Quality Personnel

CQR: Contractor Quality Representative

EK&RD: Engineering Knowledge and Resource Division

EPM: Enterprise Project Management

ES: Engineering Services

ID: Inspection Department

IEU: Inspection Engineering Unit

INCR: Internal Non-Conformance Report (Issued by contractor)

LBE: Logbook Entries (First level of reporting quality deficiency using Manual Logbook
or the Quality Management Information System, QMIS/EPM)

MCC: Mechanical Completion Certificate

MPCS: Mechanical Performance and Close-out System

MSAERs: Mandatory Saudi Aramco Engineering Requirements

NCR: Non-conformance Report (Issued by Saudi Aramco through quality management

module such as EPM)

PID: Project Inspection Divisions (Under ID)

PMCC: Partial Mechanical Completion Certificate

PM: Project Management

PQM: Project Quality Manager

© Saudi Arabian Oil Company, 2023 Page 6 of 29

Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
QMIS: Quality Management Information System (also known as electronic Inspection
Logbook).

SAPMT: Saudi Aramco Project Management Team

WS: Worksheet (Mechanism to report project major violations, repeated moderate

violations or escalating overdue NCRs as stipulated in this Procedure)

Definitions

Non-conformities Escalation: A structured mechanism to progressively escalate

pending quality and technical deficiencies to the concerned management.

Project Sponsor: An Executive or a member of Management, appointed by the

Proponent organization, who is accountable for meeting project objectives and
steering the IPT towards maximizing investment value.

Project Quality Manager (PQM): The senior Inspection Representative responsible for
coordinating all inspection requirements on behalf of the Inspection Department with
Project Management throughout all project phases.

Repeat Violation: A non-compliance of the same reference of MSAER, industry

standards, project specifications, or contract requirements with the same root cause
which indicate a gap or failure in certain quality process/system, repeated within six (6)
months period and shall be recorded in accordance with Section 6.5.3.

Technical Deficiencies: Non-compliance to any MSAER or project specifications

5 Violations Categories

5.1 Major (If any one of the following applies)

5.1.1 Violations of company standards including GIs that put the quality and
integrity of the facility including its workers and equipment at risk.

5.1.2 Actions that violate the corporate values and business ethics by
submitting forged items and counterfeit materials.

5.1.3 Repeat of Moderate violations in accordance with paragraphs 6.5.3 and

6.5.4.1.

5.2 Moderate (If any one of the following applies)

5.2.1 Any violation to MSAER, project specifications and approved IFC

drawings that if the next phase of work (critical path) is continued without
correcting the violation, the integrity of the next phase will be
jeopardized. Such violation if not corrected in a timely manner will lead
to more severe damage or complexity.

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Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
5.2.2 Any violation to Schedule Q.
Commentary Note: Minor violations related to Schedule Q listed in Appendix D are
excluded from this definition.

5.2.3 If the violation will be categorized ‘YES’ item as defined in GI-0002.710

during the partial MCC stage.

5.2.4 Repeat of minor violation in accordance with paragraphs 6.5.3 and

6.5.4.2.

5.3 Minor (If any one of the following applies)

5.3.1 Any violation to MSAER, project specifications and approved IFC

drawings that may affect the quality of the current phase of work but not
necessarily affect the integrity of subsequent phases of work. i.e., the
next phase of work is not dependent on the correction of the violation.

5.3.2 If the violation will be categorized as ‘NO’ item as defined in

GI-0002.710 during the partial MCC stage.

5.3.3 Repeat of Minor INCR in accordance with paragraph 6.5.4.3

6 Instructions

6.1 Quality Issues Notification

6.1.1 Quality or technical deficiencies shall be reported in a timely manner

through quality management module such as EPM, QMIS, depending on
the identified violation as defined in Section 5.

6.1.2 Potential non-conforming materials, products or work shall be pro-

actively highlighted to avoid re-work.

6.1.3 A letter of concern signed by the PID Manager/PQM shall be addressed

to the Department Head of the MCC/PMCC Chairman whenever
MCC/PMCCs are approved in the MPCS without ID signature due to
converted and unresolved ‘YES’ items for other Organizations. This
letter shall be copied to ID and SAPMT Department Directors.

6.1.4 A letter of concern signed by the ID Director/PID Manager shall also be

addressed to the Director of the MCC/PMCC Chairman whenever
MCC/PMCCs are approved in the MPCS system and ID’s ‘YES’ items
are converted to ‘NO’ without obtaining ID’s agreement. This letter shall
be copied to Proponent Sr. VP, ES Sr. VP, and PM Sr. VP.

6.1.5 A letter of concern signed by the ID Director or ES VP & Chief Engineer

shall be addressed to the Vice President or Admin Area head of the

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Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
MCC/PMCC Chairman whenever a Facility is commissioned without
Inspection Department’s review/signature on the MCC/PMCC.
This letter shall be copied to ES Sr. VP and PM Sr. VP.
Commentary Note: For Section 7.1.5, the level of signatory (not less than ID Director
Level) should correspond to the criticality of the subject line or system in MCC.

6.1.6 Starting a project which excludes ANY Mandatory Saudi Aramco

Engineering Requirement (MSAER), without securing the required
waiver approved by applicable management level authority in
accordance with SAEP-302 shall be reported as a worksheet (major
violation).
Exception: SAEP-148 case is an exception to the above term (paragraph 7.1.6).

6.1.7 Initiators, approvers and other interested parties of quality issue

notifications shall be in accordance with Appendices E1, E2, and E3,
“Responsibilities for Escalation of Quality Issue Notification”.

6.2 Agreed Completion Date (ACD) for all types of quality notifications (INCR,
LBE, NCR, WS, and DWS)

6.2.1 For First ACD, as per Appendices A-1, A-2, and A-3, the following
agreement is required to be obtained:

6.2.1.1 If the first ACD is within 90 calendar days:

a) For Minor Violations, Project Inspection Field Supervisor

agreement is required.

b) For Moderate Violation, Project Inspection Unit Supervisor

agreement is required.

c) For Major Violation, Project Inspection Sr. Supervisor

agreement is required.
Exception: For INCR (for all violation categorizations), Project Inspection Unit
Supervisor agreement with first ACD is required (within 90 calendar days).

6.2.1.2 If the first ACD is exceeding 90 calendar days regardless of the

violation category (Minor, Moderate, and Major):

a) Project Inspection Manager agreement is required for ACD, if it

does not exceed 180 calendar days.

b) Inspection Department Director Agreement is required for ACD

exceeding 180 calendar days.
Commentary Note: The first ACD shall not exceed 90 calendar days without a
legitimate justification (in addition to the required agreement detailed on the

© Saudi Arabian Oil Company, 2023 Page 9 of 29

Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
above sections), legitimate justifications including but not limited to the following
four examples:

1.After-the-fact Waiver is needed to resolve the violation.

2.The corrective action for the violation includes Change Orders.

3.The corrective action for the violation includes a long lead procurement of
material.

4.Specialized Testing or repair process by third party is required to resolve the

reported issue.

6.2.2 When no agreement on the ACD of any type/category of Quality

Notification could be reached between the Project Inspection and the
SAPMT, the ACD shall be decided as follows:

6.2.2.1 For ACD more than 90 calendar days not exceeding 180
calendar days or in case of a conflict on establishing the first
ACD between SAPMT and PID, the Project Inspection Manager
shall make the final decision.

6.2.2.2 For ACD exceeding 180 calendar days or in case of a conflict

on establishing the first ACD between SAPMT Department
Director and Project Inspection Manager, the ID Department
Director shall make the final decision.

6.2.3 As per Appendices A-1, A-2, and A-3, if an extension of ACD is justified
and approved by Project Inspection Unit Supervisor (For Minor Violations),
Project Inspection Sr. Supervisor (For Moderate Violations) or Project
Inspection Manager (For Major Violation), one-time basis approval of ACD
extension may granted with a maximum of 90 calendar days.
Commentary Note: During the full life cycle of any type/category of quality notifications
except INCR, it is permitted to utilize the option of ACD extension only once right after
the first ACD (if it is justified and approved by the right authority). For INCR, it is not
permitted to extend the first ACD; however, the ACD extension option may be utilized (if
it is justified and approved by the right authority) just once after escalating the INCR into
one of Saudi Aramco quality notification types (LBE, NCR, or WS) as demonstrated in
Appendices A-1, A-2, and A-3.

6.2.4 After the submittal of LBE to contractor and SAPMT, Project Inspection
Field Supervisor is authorized to revise the violation degree and the first
Agreed Completion Date (ACD) which proposed by the Project Inspector
within 5 working days. This revision of ACD is not considered as an
extension.

6.2.5 After the submittal of NCR (moderate violation) to SAPMT and prior to
final approval, Project Inspection Unit Supervisor is authorized to revise
the first Agreed Completion Date (ACD) within 5 working days.
This revision of ACD is not considered as an extension.

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Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
6.2.6 After the submittal of WS (major violation) to Project Inspection Manager
and prior to the final approval, Project Inspection Sr. Supervisor is
authorized to revise the first Agreed Completion Date (ACD) within 5
working days. This revision of ACD is not considered as an extension.
Commentary Note: If the NCR (moderate violation) is not approved by SAPMT within
5 working days or been rejected, which resulted in an escalation of the notification to a
WS level, in case the WS is approved and the given first ACD was elapsed without
resolving the issue, the option of one-time basis approval of ACD extension may
granted by Project Inspection Manager with a maximum of 90 calendar day.

6.3 Handling of Contractor’s Internal NCR (INCR)

6.3.1 When the Contractor’s Quality Control personnel report and document a
quality non-compliance, ID shall escalate and track it in accordance with
the work process demonstrated on Appendix B “Contractor’s Internal
NCR.”

6.3.2 Contractor INCR shall be categorized (Major, Minor or Moderate) in

accordance with Section 5.

6.3.3 Project Inspection Unit Supervisor or his delegate shall maintain an

effective tracking sheet of INCR with an updated violation degree and
ACD.

6.4 Clarifications to Appendix D “Examples of Violations and Escalation

Steps”

6.4.1 Clearance of “Unavailability of approved Contractor QA Manager or

Contractor QC Manager” in Appendix D shall be based on actual
mobilization at the project site of the approved Contractor QA Manager
or QC Manager and not just submission or approval of resumes.
Absence of an already approved and mobilized Contractor QA or QC
Manager, due to verified emergency leave could be exempted by the
PQM provided that the leave of absence shall not be more than seven
(7) calendar days without an approved replacement is provided and
mobilized at site.

6.4.2 Clearance of – “Insufficient QC Manpower (Deficiency > 10% of Plan)” in

Appendix D shall also be based on actual mobilization of the approved
Contractor QC personnel at the project site, and not just submission or
approval of resumes’.

6.5 Non-conformities Escalation Process

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Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
6.5.1 Escalation processes shall be in accordance with Appendices A-1, A-2,
and A-3, “Quality Issues Escalation Matrix for Major, Moderate and Minor
violations”.

6.5.2 Logbook Entries (LBEs) shall be made for deficiencies defined as Minor.
LBEs shall be made through the EPM/QMIS or Manual logbook. (Manual
logbook entry shall be done only in exceptional cases and shall have
prior approval by the relevant PID Manager).
Exception: Inspector may write LBE and propose the violation type/degree either
Moderate or Major, and within 5 working days the field supervisor shall escalate the
violation if he agrees with the inspector in accordance with Appendix A-1.

6.5.3 Repeat of Moderate or Major violation within six (6) months will result to
a Quality Notification starting at the next higher level of Violation
Category and Notification. Escalate minor violation if repeated more
than 3 times within 6 months to a Moderate violation.

6.5.4 Repeated Internal Non-conformance Report (INCR) within six (6) months
shall be, as per Appendix B, “Contractor’s Internal NCR”:

6.5.4.1 Escalated to SA WS if the Repeated INCR categorized as a

major violation.

6.5.4.2 Escalated to SA NCR if the Repeated INCR categorized as a

moderate violation.

6.5.4.3 Escalated to Violation-after-the-fact Entry in the EPM/QMIS if

the Repeated INCR categorized as a minor violation.
Commentary Note: If the repeated minor violations (more than 3 times within 6 months)
includes at least one Violation-after-the-fact Entry in the EPM/QMIS, it is required to be
escalated immediately to SA NCR in accordance with Appendix A-1. While if all minor
repeated violations (more than 3 times within 6 months) are reported as INCR; then, it
shall be escalated to a Violation-after-the-fact Entry in the EPM/QMIS in accordance
with Appendix B.

6.5.5 NCR shall be escalated to a Worksheet (WS) when any of the following
applies:

6.5.5.1 NCR is not corrected or completed on the ACD (including the

extension period, if extension is approved)
Exception: The Project Quality Manager (PQM) has the authority to escalate the quality
notification to a higher level earlier than the ACD, if evidently, the issue will not be
completed/corrected within the given ACD or further complications would occur.

6.5.5.2 NCR submitted by Inspection Department that is not approved

by SAPMT within five (5) working days.

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Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
6.5.6 A Worksheet that was not resolved on or before the ACD, including the
approved extension period (if extension is permitted and approved), shall
be escalated to Delinquent Worksheet.
Exception: The Project Quality Manager (PQM) has the authority to escalate the quality
notification to a higher level earlier than the ACD, if evidently, the issue will not be
completed/corrected within the given ACD or further complications would occur.

6.5.7 Once the project reaches its PMCC/MCC stage, all open INCRs, LBEs,
NCRs, Worksheets and DWS shall be transferred to MPCS. Items
required for start-up or impacting safety are to be marked as ‘YES’ Items.
All other items shall be designated as ‘No’ Items.
Commentary Note: Open standard violations when transferred to MPCS shall be kept
open within quality management module such as QMIS/EPM or Inspection logbook and
to be escalated in accordance with this procedure.

6.5.8 Any standard violation shall be reported and escalated utilizing the
appropriate quality notification either through INCRs, LBEs, NCRs,
Worksheets, and DWS in accordance with this procedure from the
beginning of the project until the MCC final signatory.

6.5.9 After the MCC walkthrough, any moderate or major quality notification
shall be communicated to the Proponent Chairman through an official
letter by the project PQM.

6.5.10 After Final MCC signatory, ID may participates to clear “No” Exception
Items in compliance with GI 0002.710 para 4.2.14. If support is still
deemed necessary , proponent shall address this request officially to ID
Director for ID services up to six (6) months and to the VP & Chief
Engineer for any extensions afterward. Costs are treated according to GI
202.309.

7 Responsibilities

7.1 Inspection Department Director

7.1.1 Approve the agreed completion date if it exceeds one hundred eighty
(180) calendar days for the issued quality notifications.

7.1.2 Agree with the ACD of Delinquent Worksheet (DWS1) per Appendices A-
1, A-2, and A-3.

7.1.3 Approves Delinquent Worksheet (DWS1) issued by the Project

Inspection Manager.

7.1.4 Initiates issuance of Delinquent Worksheet (DWS2).

7.2 Project Inspection Manager

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Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
7.2.1 Reviews and approves or rejects SAPMT request to extend ACD for
Worksheets

7.2.2 Approves Worksheets issued by the PQM (Sr. Supervisor)

7.2.3 Initiates issuance of Delinquent Worksheet (DWS1)

7.2.4 Reviews and approves or rejects the deletion of quality notifications

7.2.5 Reviews and approves or rejects the ACD of quality notifications if the
ACD exceeds 90 calendar days but for not more than 180 calendar days.

7.3 Project Inspection Senior Supervisor (PQM)

7.3.1 Initiates issuance of Worksheet (WS).

7.3.2 Reviews and may grant one-time approval of ACD extension prior to
escalation of valid NCR.

7.3.3 Decides cases of violations not clearly defined in Section 5 and not listed
in Appendix D “Examples of Violations and Escalation Steps.”

7.3.4 Reviews closure of major INCR.

7.3.5 Has authority to increase violation category.

7.4 Project Inspection Unit Supervisor

7.4.1 Approve the one time extension for minor quality notification.

7.4.2 Agree on the ACD for NCR if it is not more than 90 calendar days.

7.4.3 Project Inspection Unit Supervisor or his delegate is responsible to track

INCR violation degree and ACD in accordance with paragraph 6.3.2.

7.4.4 Agree on the ACD for INCR regardless of its category if it is not more
than 90 calendar days.

7.4.5 Review closure of moderate INCR

7.5 Project Inspection Field Supervisor

7.5.1 Field Supervisor shall evaluate and agree with proposed ACD and
violation degree (if it is proposed by Project Inspector as Moderate or
Major Issue) in accordance with paragraph 6.2.4 and Appendix A-1.

7.5.2 May initiate Non-Conformance Reports (NCRs) in lieu of Project

Inspection Unit Supervisor.

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Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
7.5.3 Agree on the ACD for minor quality notifications if it is not more than 90
calendar days.

7.6 Project Inspector

7.6.1 Highlight to SAPMT any potential non-conforming material, product or

work to avoid re-work.

7.6.2 Report in a timely manner any quality or technical deficiency through the
QMIS/EPM (LBE).

7.6.3 Before LBE submittal, Propose the first ACD and the degree of the
violation depending on the committed violations as defined in Section 5.

7.6.4 Support the PID Unit Supervisor in categorizing the INCR and monitoring
its ACD.

7.6.5 Following-up and monitoring the ACD status of LBE issued by him.

7.7 SAPMT

7.7.1 Ensures full compliance of project with SAEP-302, “Waiver of a

Mandatory Saudi Aramco Engineering Requirement.”

7.7.2 Approves valid NCRs initiated by Inspection Department within five (5)
working days.

7.7.3 Communicate quality notifications issued by Saudi Aramco to the

contractor effectively and in timely manner.

7.7.4 Evaluate and agree with proposed ACD actively and within the given
period as per Section 6.2.

7.7.5 In case of On-Hold project, SAPMT shall notify PQM through official
letter to stop escalation process till issue is resolved. The request shall
stipulate SAPMT responsibility to apply preservation requirements of
project materials and equipment in accordance with SAEP-385
“Preservation of Project Materials and Equipment”.

8 Cancelled Quality Notifications

Submitted quality notifications shall not be marked for deletion without proper
justification approved by PID Manager. The approved justification shall be
attached in the quality notification being “marked for deletion”. This cancellation
exempts the system’s errors deletion actions.

Document History
28 January 2012 New Saudi Aramco Engineering Procedure.

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Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
17 March 2013 Minor revision to provide clarification on selected sections.
11 February 2016 Minor revision: 1- to establish the ACD completion date for each violation
category and 2- Advancing the notification of DWS02 to Sr. VP of Technical
Services.
24 May 2018 Major revision to control the 3-month limitation to complete a non-compliance
which causes unjustified escalation. The changes, on Appendix D item-4, also
corrected the ineffective escalation of lay-up procedure non-compliances to
SAES A-007 that is a common problem in projects. This revision will raise flags
for early corrective actions. Moreover, disregarding shared Lessons Learned is
added as violation.
10 June 2018 Editorial revision.
18 May 2021 Major revision.
19 May 2021 Editorial revision to address typographical errors.
12 December 2022 Editorial revision to reflect job title changes
03 January 2023 Editorial revision to reflect the Chief Engineer job title change

© Saudi Arabian Oil Company, 2023 Page 16 of 29

 Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
Appendix A-1 – Minor Quality Issues Escalation Process

Saudi Aramco Escalated Minor INCR (not resolved

LBE within ACD)

PID Inspector
initiate a
violation LBE PID Inspector
No ACD not No ACD more than No
on QMIS Proposed ACD Field Supervisor
more than 90 days and less
(ACD not more Agreement
90 days than 180 days
than 90 days)

Yes Repeated No Yes

Minor Issue
Minor Issue Yes Yes

No No
Yes ID Manager
Completed Yes Approval
Inspector within ACD
SAPMT No Yes PID Division
Proposed Project Head
Violation Degree No Manager Approval Yes
Field Supervisor shall decide the violation degree

(Moderate or Agrement
Major)
Yes No

One-Time Extension
within 5 working days

Field
No Granted by PID Unit Supervisor
Yes Major SAPMT
Supervisor (Max. of 90 Modifies ACD No
issue days) Department
Accordingly Manager
Agreement
No

Yes Yes
ID Manager
Moderate No Decide ACD
Issue

No Completed
Yes within Extended
ACD?

Escalated to
SA NCR Yes
Immediately
Issue SA WS Issue SA NCR
Immediately Immediately
Yes
PMT Sr.
Yes Unit Supervisor
Project Completed PID Sr. Supervisor
Agree with ACD
Refer to Refer to Engineer within ACD Escalated to SA WS Completed
(Max. of 90 days) Close
Appendix A-3 Appendix A-2 Approval Immediately
for Major for Moderate No
Violations Violations No

Notes:
1- Field Supervisor shall decide the violation degree and the Agreed Completion Date (ACD) within 5 working days.
2- The lay-up non-compliance with SAES-A-007 and RT Backlog are exempted cases and they shall be handled in
accordance with Appendix D, Table items # 4 and 5.
3- Repeat of Minor violation more than 3 times within 6 months will result to be escalated to a Moderate violation.

© Saudi Arabian Oil Company, 2023 Page 17 of 29

 Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 03 January 2023 Project Quality Issue Escalation Process
Next Revision: 18 May 2024
Appendix A-2 – Moderate Quality Issues Escalation Process

• Repeated Minor violations

Saudi Aramco
(LBEs)
Non-Conformity
• Escalated Moderate INCR
Report (SANCR)
(not resolved within ACD)

PID Unit Supervisor

Repeated PMT Sr. Engineer ACD not No ACD more than No
Proposed the ACD and PMT Sr. Engineer No ID Manager
Moderate No Yes Agree with more than 90 days and less
submit SANCR through Agree Agreement
Issue proposed ACD 90 days than 180 days
SAP

No Yes Yes
PID Unit
NCR will be rejected by
Supervisor Yes
SAPMT Sr. Engineer
No Agreement
No
PID Unit
Supervisor
No
Agreement
Yes
Yes No
Completed PMT Sr. Engineer PID Division No
Yes
within ACD Final Approval Head Yes
No
No Agreement

Yes
No PID Division No
Head One-Time SAPMT Project
Agreement Extension Granted Manager Yes
by PID Sr. PID Unit Supervisor Agreement SAPMT
Supervisor (Max. of adjust the ACD Department
90 days) Accordingly on SAP Manager
Yes Agreement
Yes Yes
No
Yes
Yes ID Manager
SANCR Decide ACD
Marked as
Deleted on
SAP
Completed
No within Extended Yes Close
ACD?
Yes Yes
ID Manager
No Escalated to
End Agree with ACD Completed Completed
Yes SA DWS-3
(Max. of 90 within ACD within ACD
Immediately
PID Division days)
Head Agree with Completed
ACD (Max. of 90 within ACD No
days)

Escalated to No Escalated to Escalated to CE Agree with

SA WS SA DWS-1 SA DWS-2 ACD (Max. of Completed
Immediately Immediately Immediately 90 days)

Notes:
1- PID Unit Supervisor shall decide the Agreed Completion Date (ACD) within 5 working days.
2- The lay-up non-compliance with SAES-A-007 and RT Backlog are exempted cases and they shall be handled in
accordance with Appendix D, Table items # 4 and 5.
3- Repeat of Moderate violation within 6 months will result to be escalated to a Major violation.

© Saudi Arabian Oil Company, 2023 Page 18 of 29

 Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 19 May 2021 Project Quality Issue Escalation Process
Next Revision: 18 May 2024

Appendix A-3 – Major Quality Issues Escalation Process

Repeated Moderate violations (NCRs)

Saudi Aramco Work-
Escalated Major INCR (not resolved
Sheet (SA WS)
within ACD)

PID Sr. Supervisor SAPMT Project

Repeated No propose the ACD and Manager
Yes ACD not No ACD more than No
Major Issue submit SA WS through more than 90 days and less
Agreement with
SAP 90 days than 180 days
proposed ACD

Yes Yes
No Yes No
ID Manager
Agreement

PID Sr.
No PID Division Head Yes
Supervisor
Approval within 5
Corrected and
working days
resubmitted PID Division
Yes
Head
Agreement
Yes
No

Completed Yes
within ACD
SAPMT No
No Department
PID Sr. Supervisor
adjust the ACD Manager
Accordingly on SAP Agreement
ID Manager
Decide ACD
One-Time
No Extension Granted Yes
by PID Division
Head (Max. of 90
days)

Yes
Close
Yes Yes

ID Manager Escalated to
No Completed Agree with ACD Completed Completed No
Yes SA DWS-3
within Extended (Max. of 90 within ACD within ACD
Immediately
ACD? days)

No

Escalated to Escalated to CE Agree with

SA DWS-1 SA DWS-2 ACD (Max. of Completed
Immediately Immediately 90 days)

Notes:
1- PID Sr Supervisor shall decide the Agreed Completion Date (ACD) within 5 working days.
2- The lay-up non-compliance with SAES-A-007 and RT Backlog are exempted cases and they shall be handled
in accordance with Appendix D, Table items # 4 and 5.
3- Repeat of Major violation within 6 months will result to be escalated to Delinquent Worksheet (DWS 01).

© Saudi Arabian Oil Company, 2021 Page 19 of 27

Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 19 May 2021 Project Quality Issue Escalation Process
Next Revision: 18 May 2024

Appendix B – Contractor’s Internal NCR

Contractor’s INCR

PID to Initially record INCR

into QMIS, For information
and tracking purposes

Repeat INCR?
Yes
within 6 Months

No

Contractor QC ACD not ACD more than

Manager more than No 90 days and less
Proposed an ACD 90 days than 180 days No
Minor Issue
PID Unit Supervisor shall decide the violation

ID Manager
No Approval
Yes
degree within 5 working days

No Yes

Yes PID Unit

Major Completed on ACD? Supervisor
issue Agreement No
PID Division
Yes Head Approval No
No No No

Yes Close INCR & QMIS PID Unit No

Moderate Issue Supervisor
Record SAPMT Project
adjust the ACD
Accordingly Manager Yes
Yes Yes SAPMT
Agreement
Department
Manager
Agreement

Yes
Yes
ID Manager
Escalate Decide ACD
Issue SA WS Issue SA NCR
Immediately Immediately Minor INCR
into SA-LBE

Refer to Refer to Refer to

Appendix A- Appendix A-2 Appendix A-1
3 for Major for Moderate for Minor
Violations Violations Violations

Note:
1- PID Unit Supervisor or his delegate shall maintain a tracking sheet of INCR with an updated violation degree and ACD.

© Saudi Arabian Oil Company, 2021 Page 20 of 27

Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 19 May 2021 Project Quality Issue Escalation Process
Next Revision: 18 May 2024

Appendix C – Quality Issues Escalation Matrix

Violation *1st ESCALATION STAGES

Type Notification 1 2 3 4 5

Minor LBE NCR WS - - -

Moderate NCR WS DWS1 DWS2 DWS3 -

Major WS DWS1 DWS2 DWS3 - -

*Note: Inspector may write LBE and propose the violation type/degree either Moderate or Major, and
within 5 working days the field supervisor shall escalate the violation if he agrees with the
inspector in accordance with Appendix A-1.

© Saudi Arabian Oil Company, 2021 Page 21 of 27

Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 19 May 2021 Project Quality Issue Escalation Process
Next Revision: 18 May 2024

Appendix D – Examples of Violations and Escalation Steps

ESCALATION MATRIX Recommended Phase Violation

S/N Sample Violation for Proactive Notification Category

Job X/Kick-off/Weekly QC
1. Forged Quality Documents Major
Meetings
Procurement and/or Installation of any counterfeit
materials classified as inspectable per SAEP-1151. Job X/Kick-off/Weekly QC
2. Major
Note: For non-inspectable materials, PQM decides on the Meetings
initial Violation Category.
Starting a project which excludes ANY Mandatory Saudi
Aramco Engineering Requirement (MSAER), without
securing the required waiver approved by applicable
3. management level authority. Job X/Kick-off Meetings Major
Exception:
The scope of SAEP-148 is an exclusion to this item.
Failure to implement the approved lay-up procedure per
SAES-A-007.
Commentary Note:
Maximum allowed ACD is 30 days with no extension.
4. Non-completion of the corrective actions by the ACD will Job X/Kick-off Meetings /
Moderate
result to automatic escalation to WS. At WS level, Weekly QC Meetings
maximum allowed ACD is 30 days with no extension.
Non-completion of the corrective actions by the ACD will
result to automatic escalation to DWS. Same WF for
DWS2 & DWS3.
An increase in RT backlog for 3 consecutive weeks lead to
a moderate level violation. In order to close this
observation, the contractor must show a diminishing trend
of RT backlog over 3 consecutive weeks in addition to the
implementation of other approved corrective actions.
5. Job X/Kick-off Meetings /
Commentary Note: Moderate
Weekly QC Meetings
RT backlog increases for one week shall be reported
as proactive notification and when it continues
increasing for another week, a standard violation
logbook entry shall be issued.
Unavailability of approved Contractor QA Manager or Job X/Kick-off Meetings /
6. Moderate
Contractor QC Manager. Weekly QC Meetings
Commencing of Special Process activity as specified in Job X/Kick-off/Weekly QC
7. Moderate
Schedule Q without approved procedures/personnel. Meetings

Concrete or Asphalt placement without pre-approval of the Kick off Meetings/Weekly QC Moderate
8.
batching plant or mix design. meetings

Kick off Meetings/Weekly QC

9. Use of any non-approved third-party service providers. Moderate
meetings
Starting work without IFC Drawings or not submitting
required Quality Documents as per Schedule Q. Kick off Meetings/Weekly QC Moderate
10.
meetings Minor
Note: Categorization is PQM discretion.

© Saudi Arabian Oil Company, 2021 Page 22 of 27

Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 19 May 2021 Project Quality Issue Escalation Process
Next Revision: 18 May 2024

ESCALATION MATRIX Recommended Phase Violation

S/N Sample Violation for Proactive Notification Category

Placing of inspectable materials and equipment with Kick off Meetings/Weekly QC

11. Major
unapproved source. meetings
Carrying out modification work on accepted systems Kick off Meetings/Weekly QC
12. Moderate
without SA approval. meetings
Preservation and Storage of equipment and materials
classified as ‘Inspectable’ per SAEP-1151 that are not in
13. accordance with the approved quality plan and Schedule Q. Kick off Meetings/Weekly QC
Moderate
meetings
Note: PQM is authorized to lower to minor based on
equipment and materials criticality.
Failure of the Contractor to control and implement the
quality requirements of its batch plants, subcontractors
and other service providers as required per Schedule Q. Kick off Meetings / Weekly
14. Moderate
(e.g., Not assigning his own QC inspectors at the QC meetings
manufacturer and service provider locations per Schedule Q,
and relying only on the In-house QC).
Contractor failure to conduct complete quality system Kick off Meetings / Weekly
15. Moderate
audits per Schedule Q requirements. QC meetings
Contractor failure to conduct the 6-months Management
16. Review Meetings and submit the results/recommendations Kick off Meetings / Weekly
Moderate
to Saudi Aramco at the prescribed time. QC meetings

Insufficient QC Manpower (Deficiency > 10% of Plan).

Note: PQM has the option to increase this category as Job X / Kick-off Meetings/
17. Moderate
MAJOR if the missing QC disciplines/positions impact on Weekly QC Meetings
construction activities
Contractor failure to perform/implement inspection per
18. approved ITP without adequate notification or justification Kick off Meetings / Weekly
Moderate
(HOLD POINT activities). QC meetings

Contractor failure to perform/implement inspection per

19. approved ITP without adequate notification or justification Kick off Meetings / Weekly
Minor
(Witness Point activities). QC meetings

QC Personnel on part time basis, either routinely

performing non-QC functions or covering QC jobs in a Job X / Kick-off / Weekly QC
20. Minor
different geographical location without prior approval of the Meetings
ID Area Field Supervisor.

21. Insufficient QC Manpower (Deficiency < 10% of Plan). Job X / Kick-off Meetings Minor

Failure to submit, incomplete, poor quality or late submittal

22. Kick off Meetings / Weekly
of the required weekly or monthly deliverables as required Minor
QC meetings
by Schedule Q.
Poor or incomplete quality submittals or documentations.
23. Note: PQM has the option to increase this category as Kick off Meetings / Weekly
Minor
MAJOR if the submittals are for critical activities such as QC meetings
hydro test package of oil and gas facilities.

© Saudi Arabian Oil Company, 2021 Page 23 of 27

Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 19 May 2021 Project Quality Issue Escalation Process
Next Revision: 18 May 2024

ESCALATION MATRIX Recommended Phase Violation

S/N Sample Violation for Proactive Notification Category

Late submission of the required

deliverables/documentations as required by Schedule Q.
24. Kick off Meetings / Weekly
Note: PQM has the option to increase this category as Minor
QC meetings
MAJOR if the submittals are for critical activities such as
hydro test package of oil and gas facilities.
Failure to submit the required deliverables/documentations
as required by Schedule Q.
25. Kick off Meetings / Weekly
Note: PQM has the option to increase this category as Minor
QC meetings
MAJOR if the submittals are for critical activities such as
hydro test package of oil and gas facilities.

Legend:
L = e-Log Book entry
N = Non-Conformance Report (Q8 Notification)
W = Worksheet (Q9 Notification)

© Saudi Arabian Oil Company, 2021 Page 24 of 27

Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 19 May 2021 Project Quality Issue Escalation Process
Next Revision: 18 May 2024

Appendix E1 – Responsibilities for Escalation of Quality Issue Notification (Major)

Violation
Major
Category

Delinquent Delinquent Delinquent

Worksheet WS 01 WS 02 WS 03
(WS) (Letter) (Letter) (Letter)

VP & Chief
Initiator PQM PID Div. Head ID Dept. Mgr.
Engineer

VP & Chief
Approver PID Div. Head ID Dept. Mgr. ES Sr. VP
Engineer

Recipient SAPMT Dept. Vice President,

SAPMT VP. TS Executive VP
Mgr. SAPMT

Sr. VP, SAPMT Technical Services (TS) Sr. VP, SAPMT &
SAPMT VP ES Sr. VP & Project Executive VP Project Sponsor
Sponsor
ES Sr.VP SAPMT VP
Interested VP & Chief Engineer, VP & Chief Engineer,
SAPMT VP & Project VP & Chief Engineer
Dept. Director for ID Project Manager
Parties Sponsor
Project Manager Dept. Directors for Dept. Directors for Dept. Directors for
Proponent Site Rep. SAPMT & Proponent Proponent, ID, SAPMT Proponent, ID, SAPMT

© Saudi Arabian Oil Company, 2021 Page 25 of 27

Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 19 May 2021 Project Quality Issue Escalation Process
Next Revision: 18 May 2024

Appendix E2 – Responsibilities for Escalation of Quality Issue Notification (Moderate)

Violation Moderate
Category

SA Non- Delinquent Delinquent Delinquent

conformance Worksheet WS 01 WS 02 WS 03
Report (WS) (Letter) (Letter) (Letter)
(NCR)

PID Unit VP & Chief

Initiator PQM PID Div. Head ID Dept. Mgr.
Supervisor Engineer

Approver Sr. Project Engr. PID Div. Head VP & Chief

ID Dept. Mgr. ES Sr. VP
Engineer

Contractor Sr. Vice President,

SAPMT Dept. Mgr. SAPMT VP TS Executive VP
Recipient Representative SAPMT

Sr. VP, SAPMT Technical Services (TS) Sr. VP, SAPMT,

Project Manager SAPMT VP ES Sr. VP & Project Executive VP Project Sponsor
Sponsor

Interested VP & Chief Engineer, VP & Chief Engineer, ES Sr. VP, Project SAPMT VP
Proponent Site Rep.
Parties Dept. Director for ID Project Manager Sponsor &SAPMT VP VP & Chief Engineer

Project Manager Dept. Directors for Dept. Directors for Dept. Directors for
Manager, PID
Proponent Site Rep. SAPMT & Proponent Proponent, ID, SAPMT Proponent, ID, SAPMT

© Saudi Arabian Oil Company, 2021 Page 26 of 27

Document Responsibility: Project Quality Standards Committee SAEP-381
Issue Date: 19 May 2021 Project Quality Issue Escalation Process
Next Revision: 18 May 2024

Appendix E3 – Responsibilities for Escalation of Quality Issue Notification (Minor)

Minor

Log Book SA Non-

Violation conformance Worksheet
Entry
Category (LBE) Report (WS)
(NCR)

Initiator Inspector PID Unit Supervisor PQM

PID Field
Approver Sr. Project Engr. PID Div. Head
Supervisor

Project Contractor
Recipient Engineer SAPMT Dept. Mgr.
Representative

Project Quality SAPMT General Manager

Project Manager
Manager (GM)
Interested
Parties Sr. Project Engr. Proponent Site Rep.
VP & Chief Engineer,
Dept. Director for ID

PID Unit Project Manager

Manager, PID
Supervisor Proponent Site Rep.

© Saudi Arabian Oil Company, 2021 Page 27 of 27