Major Projects

Non-Conformance
Management
Procedure

Approved: 2/07/2020 Owner: Stakeholder Compliance

Manager - MPU
7610-000-013 Revision: 0
Reviewed: Current Uncontrolled if Printed
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CONTENTS

1  INTRODUCTION ................................................................................................. 4 

1.1  Purpose ....................................................................................................................... 4 

1.2  Scope .......................................................................................................................... 4 

1.3  Terms and Acronyms ................................................................................................ 4 

2  PROCESS ........................................................................................................... 6 

2.1  Identify Non-Conformance and Consequences ...................................................... 7 

2.2  Conduct Risk Assessment ........................................................................................ 7 

2.3  Acceptance of the Non-Conformance ...................................................................... 7 

2.4  Determine the Action Plan ........................................................................................ 8 

2.5  Prioritise Actions ....................................................................................................... 9 

2.6  Assign Responsibility ................................................................................................ 9 

2.7  Assessment and Acceptance of Action Plan .......................................................... 9 

2.8  Action Recorded in Non-Conformance Action Register ...................................... 10 

2.9  Implement Action Plan ............................................................................................ 10 

2.10  Monitor and Review the Effectiveness of Action Plan.......................................... 11 

2.11  Close-out Action Plan .............................................................................................. 11 

3  DEFECT MANAGEMENT ................................................................................. 11 

4  REPORTING ..................................................................................................... 12 

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Approval and Revision Status

Revision Descri tion of Revision Date Author Reviewed b :

Position: Quality Systems Position: QSO, SSO,
A Issued For Internal Review May 2020 Officer Compliance Auditor, S&Q
Manager
Name: Sharyn Sallermann
Name: J. Carrigan, H. Kumar,
S. Barker, L. Furmedge, A.
Sara"lic, S. Carradus
Position: Quality Systems Position: S&Q Manager
B Issued For Approval June 2020 Officer

Sharyn Sallermann Amar Sarajlic

0 Issued For Use 02/07/2020

Quality Systems Officer

Sharyn Sallermann

Date: ;,2. '1 ]..02-0 Date: ol fo1 k'Z-V

Approved by

_/
Stake�
¥ercompliance Manager Date
Lance Spice

Revision Reason for Revision Comments/Notes

A Draft, issued for Internal Review Reviewed within MPU division

B Draft, issued for External Review Distribute to other PTA divisions for comment
C,D,E Draft, subsequent draft revisions Additional reviews as deemed appropriate
0 Issued for Use Added to the MPU Controlled Library
0.01 Minor revision change Reference docs/grammatical updates etc.
1.00 Major revision change Content updated, annual review undertaken

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 7610-000-013 - Non-Conformance Management Procedure

1 INTRODUCTION

1.1 Purpose
The purpose of this procedure is to provide guidance on the management of non-
conformances to ensure effective treatment and close-out of identified issues.

This procedure addresses how non-conformances will be managed across Major Projects
(MP) in consideration of PTA’s Project Management Framework (PMF), the Rail Safety
National Law (WA) 2015, as well as the requirements under AS/NZS ISO9001, AS/NZS
ISO45001 and AS/NZS 14001.

References:
 Rail Safety National Law (WA) 2015
 Rail Safety National Law (2015) Regulations – Schedule 1, Clause 11
 AS/NZS ISO 9001: Quality Management Systems – Requirements
 AS/NZS ISO 14001: Environmental Management Systems
 AS/NZS ISO 45001: Occupational Health and Safety Management Systems
 9510-000-015 Corrective and Preventative Action Procedure

1.2 Scope
This procedure shall be used to manage all non-conformances within MP. This includes all
findings identified either internally or externally by Contractors or Third Parties e.g. Office of
the National Rail Safety Regulator (ONRSR) and WorkSafe as a result of activities such as
audits, inspections, defects, tests, hold point assessments, complaints, incidents,
investigations or management review. A non-conformance can be raised against either a non-
conforming product or system.

The process for management of non-conformities raised as a result of an audit are excluded
from this procedure and is detailed in the Audit Procedure.

Reference:
 7610-000-007 Audit Procedure

1.3 Terms and Acronyms

Acronyms and terms that are used throughout this plan are detailed in the table below.

Action Plan An action to eliminate the cause of non-

conformance or other undesirable situation.

Defect Non-conformance related to the intended or

specified use.

External Audit Also referred to as Second or Third Party

audits. Second Party audits are conducted
by PTA personnel on external companies
e.g. Contractors.
Third Party audits are conducted by
external, independent auditing
organisations on PTA systems and
processes e.g. Office of the National Rail
Safety Regulator.

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Hold-point A mandatory verification point beyond

which work cannot proceed without
approval by the PTA’s designated authority.
The work cannot proceed until the
designated authority is able to verify the
quality of the completed work and
compliance against specified requirements
or acceptance criteria.

Incident Any unplanned event caused by acts or

omissions resulting in, or having the
potential for a near miss, injury, ill health,
damage or loss.

Inspection Process for checking the work locations in

order to ensure conformance with specified
requirements.

Internal Audit Also referred to as First Party Audits which

are conducted by, or on behalf of the PTA
itself. These audits are conducted by PTA
personnel on PTA project teams or other
PTA divisions.

Management Review An annual review of the management

system in order to:
 determine and evaluate management
system performance in order to assess
adequacy and effectiveness of the
system and identify opportunities for
system improvement;
 determine the need for change to the
management system; and
 determine whether the current
resources are adequate to support the
management system in meeting quality
objectives.

Major Projects (MP) The division within PTA which focuses on

the delivery of high-value, high-risk complex
public transport infrastructure.

Non-Conformance (NC) Non-fulfilment of a contractual requirement

or other requirement not related to an audit
such as a defect, error, omission, deficiency
in the works, Codes, standards or
legislation.

Non-Conformance Report (NCR) A notice issued to the Contractor to identify

the non-conformance and require
remediation the issue.

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PTA Representative The PTA Representative is a delegate of

the PTA CEO and responsibilities include:
 ensure that the Principal Contractor
project team is made aware of MP’s
quality requirements;
 ensure contract documents quality
requirements are implemented;
 ensure that the Principal Contractor has
provided adequate resources to meet
the project quality objectives;
 implementation of Principal Contractor
management plans including PQMP;
and
 provide feedback to top management
on quality performance and continuous
improvement of Project management
systems.

Quality Management System (QMS) A set of interrelated or interacting elements

of an organization to establish policies and
quality objectives, and processes to
achieve those objectives.

Safety Management System (SMS) A systematic approach to managing safety,

including the policy, governance and
leadership, risk management
arrangements, mechanisms.
SFAIRP looks at what is reasonably
So far as is reasonably practicable
practicable to be done to ensure safety.
(SFAIRP)
SFAIRP is precautionary focussed,
requiring a positive demonstration of due
diligence and looks post event at the legal
justifications for what was considered and
applied to either eliminate or mitigate the
risk. The focus of SFAIRP is less on rating
the risk and more on identifying control
measures.

Reference:
 7603-000-001 Compliance and Assurance Terminology document

2 PROCESS
Any non-conformance identified, regardless of how it was identified, shall have an action plan
developed, implemented, monitored and closed-out in accordance with the process below.
The level of detail required in the action plan will be commensurate with the level of risk
associated with the non-conformance.

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When a non-conformance is identified, a Non-Conformance Report (NCR) is issued by the

Project Director or Project Manager to the Contractor. The NCR template shall be used to
report non-conformances.

Contractors shall develop an NCR Procedure which details the process for managing non-
conformances. The Contractor’s NCR Procedure must be reviewed and approved by the PTA.
The procedure shall incorporate the use of the designer and independent verifier responsible
for the design of that item in the decision making part of the procedure where applicable.

Reference:
 7660-000-038 Non-Conformance Report Template

2.1 Identify Non-Conformance and Consequences

A non-conformance can be identified by MP, the Contractor, an independent verifier, third
party auditor, sub-contractor or supplier and may be as a result of an inspection, defect
walkthrough, ITP, hold point assessment, complaint, incident, investigation or management
review meeting.

The person who identifies the non-conformance shall, in collaboration with internal and
external stakeholders, determine the consequences of the finding and whether it is an isolated
issue or whether it has a wider impact which will require the involvement of a number of people
to resolve. Contractors shall make specific provision for identification and reporting of all non-
conformances that may reduce the future safety, durability or performance of any part of the
Works.

A root cause analysis shall be carried out at this stage in order to determine the cause of the
non-conformance, which will highlight the likelihood and potential consequence of a repeat
occurrence should the non-conformance not be rectified.

2.2 Conduct Risk Assessment

A risk assessment shall be undertaken by the Contractor to consider potential impacts of NC’s
to:
 current activities;
 operational interfaces;
 the safety, quality and environment management systems;
 impact of the corrective actions on internal and external stakeholders;
 the level of risk before any corrective actions are implemented; or
 the level of residual risk which shall be reduced SFAIRP, endeavouring to achieve a
level of residual risk following implementation of the corrective action that is at least
the same or better than the residual risk that existed prior to the implementation of the
corrective action.

During the risk assessment process, consultation shall be undertaken with stakeholders to
establish whether a corrective action can be implemented effectively and whether the
stakeholders have the necessary experience and competence to fulfil their responsibilities
during the implementation of the corrective action.

References:
 7603-000-003 Risk Workshop Guideline
 7610-000-006 Risk Management Business Rules

2.3 Acceptance of the Non-Conformance

In certain circumstances it is either not practicable to make a change or by making a change
it will result in work which does not meet the requirements of the SWTC, PTA procedures,

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policies and Codes of Practice and, as such, a decision may be made to accept a non-
conformance as is, without any change to the product or system.

In this case, the Contractor must make a written report on the adequacy and practicality of
any alternatives for the proposed corrective action and submit that report with the NCR to the
designer and Independent Design Verifier and Validator responsible for the design and
verification of the item, as well as PTA Representative.

The designer must review the report and recommend, with appropriate evidence, one of the
following actions:

 the proposed corrective action(s) is accepted; or;

 the proposed corrective action is not accepted and a different corrective action be
submitted.

The designer must submit the proposed corrective action to the Design Verifier, who will verify
that the proposed corrective action is in accordance with the SWTC. The Contractor must
then forward a copy to the PTA Representative no later than two (2) business days after
receiving the independently verified corrective action.

The Contractor must not implement any proposed corrective action without:

 advice from the designer;

 receipt of independent verification of the proposed corrective action;
 a copy being forwarded to the PTA Representative; and
 formal acceptance of the corrective action by the PTA Representative.

Evidence of this acceptance shall be saved, with all related correspondence, in the appropriate
file within Objective or TeamBinder and the MP Non-Conformance Action Register and/or the
Project Non-Conformance Register shall be updated accordingly.

Reference:
 7605-000-002 MP Non-Conformance Action Register
 7610-000-010 Quality Management - Contractor Standard

2.4 Determine the Action Plan

Once a non-conformance has been identified and risk-assessed an action plan shall be
developed to prevent the problem from re-occurring. The action plan shall be documented and
contain information such a detailed description of the non-conformance, proposed actions to
address the finding, identification of the responsible person(s) or action owner and the due
date for close-out of the action. The Action Plan Template will be used when creating action
plans.

If the non-conformance is project related it shall be assigned to the Contractor to develop the
action plan, however, internal and external stakeholders, including the PTA representative
shall be consulted when developing the action plan and during the implementation process.

The proposed actions must take into account all durability objectives, safety objectives and
performance requirements.

Reference:
 7660-000-032 Action Plan Template

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2.5 Prioritise Actions

The next step in the process is to prioritise the actions based on the assessed risk. Action
plans should be managed so that priority is given to those corrective actions which are
assessed to have a higher level of risk, in particular those non-conformances with safety
related risks.

The due date for close-out of the action plan shall also be determined based on the risk level.
In relation to high risk findings, it is imperative that immediate actions are taken to control and
reduce the risk to an acceptable level. It should be noted that the immediate action taken may
not be the final action implemented to control the risk. Additional actions may then need to be
developed in the Action Plan to implement final controls.

Work shall not proceed until the corrective action has been agreed and accepted by the PTA
and the risk has been reduced.

In addition, high risk findings should be transferred to the Project and/or Major Projects risk
register to ensure that there is adequate focus from Management.

Reference:
 7605-000-002 MP Non-Conformance Action Register
 7660-000-032 Action Plan Template

2.6 Assign Responsibility

The Contractor must assign each action plan to an action owner. This person is responsible
for the implementation of the recommended action plan and ensuring that the action is closed
out by the due date. The implementation task may be delegated by the action owner to
another person or team, however, they will remain responsible for ensuring that the action
plan is completed by the due date and implemented effectively in accordance with the
approved plan.

The action owner must have the authority, skills and resources to implement the Action Plan.

2.7 Assessment and Acceptance of Action Plan

The next step in the process is to assess the proposed actions and determine whether the
action plan will be accepted. The action plan should be returned to the person who identified
the non-conformance within two weeks of the requirement for an action plan being identified.
The PTA Representative will then assess the action plan to ensure that no new risks have
been introduced and to determine whether the action plan will be accepted.

If the PTA Representative considers that the resolution of the finding does not conform to the
requirements of the SWTC, the PTA Representative shall:

 request the Contractor to review the corrective action; or

 request the Contractor to effect a review of potential amendment of their quality system
as necessary to prevent recurrence of the Non-conformance; or
 specify that any part of the Works or Temporary Works are not to proceed until the
non-conformance is rectified.

If the PTA Representative notifies the Contractor that the resolution of a non-conformance
does not comply with the requirements of the SWTC, the Contractor must:

 submit a new NCR in accordance with the requirements of the SWTC;

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 effect corrective action(s) to their quality system as required to alleviate any repetition
of the Non-conformance identified in the notification;
 obtain internal, or where applicable, external independent verification of compliance
for the proposed corrective action;
 submit to the PTA Representative all documentation associated with the new NCR;
and
 comply with that notification.

Reference:
 7610-000-010 Quality Management - Contractor Standard

2.8 Action Recorded in Non-Conformance Action Register

For NCR’s identified by Major Projects, once an action has been accepted it will be recorded
and updates tracked in the MP Non-Conformance Action Register. The action owner can
provide updates via email (HSEQMP inbox) or through TeamBinder.

Non-conformances identified by the Contractor shall be recorded and tracked in the Project
Non-Conformance Register. The register must include all details of the non-conformance
including:
 the details of the non-conformance;
 the person reporting the non-conformance;
 the person responsible for implementing the corrective action;
 the date of implementing the corrective action;
 whether the Contractor’s designer’s and/or Design Verifier’s approval is required;
 whether approval by the PTA Representative is required or has been received;
 detailed advice of all engineering and technical changes resulting from NCR’s that
have been actioned; and
 correlation of the non-conformance with Contractor or PTA Hold Points.

Reference:
 7605-000-002 MP Non-Conformance Action Register
 7610-000-010 Quality Management - Contractor Standard

2.9 Implement Action Plan

Once the action plan has been developed and approved and stakeholders have been
consulted the action owner will implement the plan. The implementation task may be
undertaken by the action owner independently or with the support of others or may be fully
delegated by the action owner to another person or team.

Implementation of the action plan may involve updating of documentation, changes to

processes, equipment or systems, or organisational changes. Where a significant change is
being implemented the Management of Change Procedure shall be followed. Changes to
procedures, policies or other controlled documents shall comply with the Working with
Controlled Documents Procedure.

Reference:
 7510-000-001 Management of Change Procedure
 7604-000-008 Working with Controlled Documents - General User Guide

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2.10 Monitor and Review the Effectiveness of Action Plan

As the action plan is implemented it should be reviewed by the action owner on a regular basis
to ensure that the plan is progressing as planned and that the actions are completed by the
due date. If necessary, the action owner shall send out a reminder to those implementing the
plan to ensure that the deadline is met.

An escalation process shall be documented within the Contractors NCR Procedure in case
any issues are encountered during implementation. The person to whom issues are escalated
should be kept informed of the progress of the action plan so that if issues arise they are
already aware of the action plan and are prepared to assist.

Once the action plan has been implemented the action owner should again review the plan to
ensure that the actions undertaken are effective and have controlled, or will prevent future
occurrence of the issue which resulted in the non-conformance.

2.11 Close-out Action Plan

Upon completion of the action plan, the action owner will need to request closure of the non-
conformance. This request should be sent to the person who initially identified the non-
conformance. Appropriate evidence of completion of the action plan is required to be attached
to the closure request.

The closure request will be assessed by the Major Projects Safety and Quality (S&Q) Manager
or the Project Quality Manager. A decision will be made whether to accept the evidence and
close-out the action or request further information/action. The action owner will then be
notified of the decision.

If a decision is made that the action plan did not sufficiently address the non-conformance
further action or evidence will be required before the non-conformance can be closed.

Once the decision is made to accept the evidence and close-out the non-conformance, the
Non-Conformance Action Register and/or Project Non-Conformance Register will be updated
and the evidence saved, with all related correspondence, in the appropriate file within
Objective or TeamBinder.

Reference:
 7605-000-002 MP Non-Conformance Action Register

3 DEFECT MANAGEMENT
Defects are aspects of the works that are not in accordance with that specified in the contract.
They can be identified at any time throughout the project and should be managed within the
Defects module in TeamBinder. If this module has not been developed for a particular project
then a Defect Register must be established.

Defects may occur because of:

 design deficiencies;
 incorrect or sub-standard materials;
 conflicts between the specifications, drawings and other documentation; or
 poor workmanship.

The defect is owned by the team who produced the defect and it is the responsibility of that
team to close-out the defect.

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If the PTA becomes aware of a defect they shall, as soon as practicable, issue a NCR to the
Contractor providing written details of the defect. If the defect has not been rectified within the
agreed timeframe, the PTA may direct the Contractor to do one or more of the following
(including times for commencement and completion):

 remove the material from the site;

 demolish the work;
 reconstruct, replace or correct the work; or
 not deliver it to the site.

If the Contractor fails to comply with the defect notice within the agreed timeframe, the PTA
may have that work rectified by another supplier with the cost incurred by Contractor, in
accordance with the Contract. Alternatively, the PTA may choose to accept the defect as a
variation to the contract.

Specific detail on the Defect Management process shall be documented in the project Defect
Management Plan) and the Procedure for Entry into Service and Final Asset Acceptance
(8110-400-013).

Reference:
 8110-400-013 Procedure for Entry into Service and Final Asset Acceptance

4 REPORTING
The MP Non-Conformance Action Register includes a dashboard which shall be updated on
a monthly basis and the results reported on a quarterly basis in the MP Executive and
Divisional HSEQ Report.

Contractors must provide monthly reports, as detailed in the Contract and SWTC, to the PTA
representative to enable tracking of progress towards closing out identified non-conformances
in a timely manner.

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