NCR defined?

Can you cite examples (in your world) of payment reduction because of nonconformity to ISO 9001 specific requirements?

 

I can provide more detail via PM if you're interested, but we've seen $ withheld for specific hardware defects as well as larger $ amounts for repeat QMS non-compliances. The two I am most familiar with related to 1) a well-documented history of the organization's ineffective RCCA, and 2) a well-documented history of the organization's inability to document and control non-conforming parts. To be clear, payments were withheld--not after a single issue--but based on an accumulation of many issues related to these ISO 9001 requirements.

 

It's easy to understand that a certain amount will be charged by a customer for nonconforming products/services delivered by a supplier. However, withholding a fraction of a payment due to NCs against a management system standard would seem difficult to accept. How much would you withhold for the error-free services delivered by a contractor representative who failed to demonstrate awareness to their quality policy?

 

Yes, and easier to accept by everyone involved. As you can imagine though, the $ amount is disputed.

You can say that again. But, it's been done.

If the supply/service were defect-free, yet an aspect of ISO 9001 were not being complied with, I'd expect the customer to no longer want to continue to pay for something they weren't getting. At the same time, if the customer is receiving defect-free supplies, on time, they may chose to ignore certain things. How to calculate an amount to withhold? As you can imagine the customer and supplier will disagree on how to do so!

 

It seems this has been a very active topic and it is very interesting to see how it morphed into money, lawyers and a judge in a court case. I am all too familiar with holdback clauses and have enacted only 2 with the support of the Project Manager, Contracts Manager and plenty of objective evidence at the table...but I digress on that point.

My question was quite deliberate in that I wanted to know if any of our learned QA colleagues have run into a similar issue where a Non-Conformance has been discovered by a client representative but the supplier or contractor will not document the occurence citing a Nonconformance Report isnt needed because the work isnt fully completed.

Example: Concrete is poured into a plywood form on our plant site. The form was installed 90 degrees off from what the drawing called for. The contractor performed a prepour inspection per their contract and the checklist showed a checkmark against FORMS IN POSITION PER DRAWINGS. The problem was discovered by the owner's inspector after the forms were removed. The pedestal was so far out of position that is had to be demolished and redone. The contractor refused to acknowledge the Non-Conformance citing the pedestal had not been turned over to the client and that it would be corrected of which is was. This same contractor had this problem 3 more times but the owners inspector caught it during the rebar installation. The owner's inspector documented the problem on our own NCR form and issued it to the contractor who then refused it stating the NCR wasn't necessary. We(client QA) stated it was necessary and had to bring our Contract Adminstrator to the table who then enacted certain contractual clauses. The contractor had no choice and had to provide an explanation as to how rebar was being installed incorrectly. It turned out the rebar crew was using old drawings and were never provided with the right ones AND the prepour inspection also missed this fact and permitted the pour to move ahead on at least one pedestal. So NCR point#2 is the pre-pour inspection did not employ the correct drawings either. The contractor finally admitted they had a problem and enacted a check to ensure the rebar and form crews validated their drawings each day before they started. The problems dropped off immediatly and the contractor got a better crew and stopped losing money for the rework. (This is a lump sum project too).

This is but one example where I have a valid issue and a contractor who refused to acknowledge or accept it until they have a real example shoved in their hands to prove the point.

So my main question: Has anyone had simlar experiences and if so what was done to change the contractor/supplier attitude towards recording Nonconformances when they are identifed?

The person who posted a story about NCR triggers in the steel mill was most helpful and gave me an idea about reducing our common pain points. So thanks!

 

Wade, is the contractor contractually bound to ISO 9001?

 

The customer doesn't take the contractor to court; they just submit a reduced payment. The customer has accumulated a pile of indisputable evidence before taking it to that point.

 

Documenting nonconformances as a result of inspection activities (as specified in the contract) should be clear to both parties. I'm assuming that both the OP and the contractor is in the construction industry and well aware that there must be monitoring/measurement at every stages during the span of the project. If these inspection activities and documentation of their results are well specified in the contract, plus specifying that non-action on discrepancies will result to non-acceptance of progress billings, the contractor attitude on recording nonconformances should not be a problem.