Missing Contract Review Records on Boeing and USAir Contracts

CarolX

Super Moderator
Super Moderator
#11
Re: Missing Contract Review Records on big contracts

My question is- can the President'ssignature on the final contract enough to show that there is record of contract review on these mult million long term contracts
Yes - but as I stated earlier - my response only covers 9K2K - I do not know about AS standard.
 
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chaosweary

#12
Re: Missing Contract Review Records on big contracts

Look at it from legal standpoint a signature on a contract is evidence of acceptance. The intent of ISO9001 is that someone has reviewed the contract for feasibility, but there is no clarification on what that method needs to be, hence, it meets ISO requirements. If you find that the contract review process is not effective, i.e., contracts are not met as a fault of contract review then you have a finding. If they cannot product the actual records of a contract with the presidents signature you may have mulitple findings.
 

phxsun2001

Involved - Posts
#13
Re: Missing Contract Review Records on big contracts

Look at it from legal standpoint a signature on a contract is evidence of acceptance. The intent of ISO9001 is that someone has reviewed the contract for feasibility, but there is no clarification on what that method needs to be, hence, it meets ISO requirements. If you find that the contract review process is not effective, i.e., contracts are not met as a fault of contract review then you have a finding. If they cannot product the actual records of a contract with the presidents signature you may have mulitple findings.
Yes, the signature of the final contract is the evidence of acceptance of the contract, but can it be used to show evidence of contract review?

Correct, there is no requirement on the method used to show records of contract review. I accept the following- email meeting notice, email from the president asking for input before signing ..... There were nothing except a signature on the final contract, which the company claimed was adequate. If their Operating Procedure says that's the way we conduct contract review, that would have been OK.

How do you find evidence that the contract review process is not effective in the limited time during the audit of this function? One way could be looking at the reject rates of parts coming back from USAIR back to this FAA repair station. The rate could be the result of a lot of things- training, test equipment, test spec, material... I only have limited time to look at the contract review function and one of the records most auditors look for is contract review record. The signature on the final contract with USAIR does not offer adequate objective evidence that the company had the contract reviewed by all departments affected and that's the intent of this ISO/AS requirement, IMO.

You have all the facts and detail. If you were the auditor, would you issue a nonconformance? I did, but the Lead auditor, the regional manager of the registrar and the owner of the President of this Registrar disagreed and took it off.
 

phxsun2001

Involved - Posts
#14
Re: Missing Contract Review Records on big contracts

I have to agree here. If their process states that the president will review, and the evidence of his review is his sign-off, they have met the requirement of the standard.

Now - if there are requirements above and beyond the ISO9K2K, that may be a different story - but as far as I can tell - your question was related to this standard.
What process? there is no process in their Cntract Rview Operating Procedure that covers these multi-million $ blanket contracts. It only cover the repair orders coming in everyday. They consider the reviewing the POs contract review.

Yes, my question is related to ISO and AS, and in this case it is about the same.
 

Jim Wynne

Staff member
Admin
#15
Re: Missing Contract Review Records on big contracts

I audited a company's contract review (CR) function to ISO9001 and AS. I could not find records of CR on big contracts with Boeing or USAir. I expected to find a one-page Contract Review form signed by affected Departments Managers.

I was told that they received the bid request and they send the proposal back. If Boeing sends a contract back to the company with no changes and if the president of this company signs the contract, it is evidence of records of contract review. It is because the company President would not sign anything without having his staff check it out.

I asked if there were evidence that the affect departments reviewed the contract. The answer was- there is no requirement in the std to show that.

I asked if this method of satisfying the CR record requirement is documented? The answer was- There is no requirement to document it. They are showing evidence of CR by the signature of the President.

This is how I look at it. 7.2.2 requires records of contract review. If the company decides to use the signature of the President on the final contract as the record, it needs to be documented somewhere. Otherwise, using the signature alone as record of CR does not meet the intent of the standard.

What do you think?
It's an interesting question. For the sake of clarity and for those who might not have immediate access to the standard, here is 7.2.2, in part:
The organization shall review the requirements related to the product. This review shall be conducted prior to the organizations' commitment to supply a product to the customer (e.g. submission of tenders, acceptance of contracts or orders, acceptance of changes to contracts or orders) and shall ensure that
(a) product requirements are defined,
(b) contract or order requirements differing from those previously expressed are resolved and
(c) the organization has the ability to meet the defined requirements.

Records of the review and actions arising from the review shall be maintained (see 4.2.4).
The question at hand is, "Can a management person's signature on a contract satisfy the "shall" with regard to maintaining records of contract review?"

Maybe. If there is system documentation that states explicitly that the signature is applied only after the requirements in 7.2.2 have been met, and there have been no changes to the contract as originally tendered for which records were kept, then the signature might suffice. I'm not sure at all though, whether implied consent is a valid answer to a "shall." If it were, all kinds of doors would be open to allow weaseling out of requirements. I would be particularly suspicious if I could find no records at all of any sort of contract amendments or questioning of "the organization's" ability to meet the requirements.

If this strategy meets the letter of the standard, I don't think it meets the intent, by any stretch, especially given that top managers are, in my experience, likely to accept work first and then try to figure out how to get it done. As far as an audit NC is concerned, I would want to review the records (if there are any) more closely before determining whether 7.2.2 has been met or not.
 
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phxsun2001

Involved - Posts
#16
Re: Missing Contract Review Records on big contracts

Yes - but as I stated earlier - my response only covers 9K2K - I do not know about AS standard.
First of all, their Contract Review Operating Procedure does not even cover the review of these big contracts. It does not say that the signature of the final contract will serve as records of contract review.

ISO and AS is about the same as far as the requirements on records on contract review.

If you think that it is acceptable, we shouldn't even have to bother asking for record of contract review, because there is always a signature on most of the final contracts.

What you are saying is :
Signature on final contract = record of contract review (or serve as, even if it is not called out anywhere)
 

CarolX

Super Moderator
Super Moderator
#17
Re: Missing Contract Review Records on big contracts

What you are saying is :
Signature on final contract = record of contract review (or serve as, even if it is not called out anywhere)
Where is the "shall" for having it "called out" somewhere? The standard does not require a written procedure for this operation, only records.

FWIW - our contract review consists of inside sales entering the order, verification of the current rev, pricing, delivery, special requirements. Evidence of the review (i.e. record), is the printed sales order. No signature required.

OK - so lets get back to the begining - you are performing an audit - you have a requirement in the standard - are they failing to meet the standard?

You said
I asked if there were evidence that the affect departments reviewed the contract. The answer was- there is no requirement in the std to show that.
and they are right - there is no requirement- hence no audit finding.
 

Jim Wynne

Staff member
Admin
#18
Re: Missing Contract Review Records on big contracts

Where is the "shall" for having it "called out" somewhere? The standard does not require a written procedure for this operation, only records.
But the standard does call for records of specific actions or events, and I don't see how a signature addresses this, especially if it's not explicitly stated in the system documentation that implied consent is evidence of contract review. Absent a specific declaration to the contrary, a signature is only evidence that the contract has been agreed to, regardless of what anyone says. If verbal assurances that contract review had taken place were considered sufficient, the standard wouldn't be demanding evidence (records) of it.

FWIW - our contract review consists of inside sales entering the order, verification of the current rev, pricing, delivery, special requirements. Evidence of the review (i.e. record), is the printed sales order. No signature required.
You refer to "special requirements," but are the drawing and related specifications reviewed to determine whether there are errors or ambiguities? Is a review for the presence of necessary tools and gages done?

OK - so lets get back to the begining - you are performing an audit - you have a requirement in the standard - are they failing to meet the standard?

You said

and they are right - there is no requirement- hence no audit finding.
There are requirements for records of specific activities to be maintained. If those activities have taken place, but there is no record of them other than implied consent, then my opinion is that there are no records, and a finding is in order.
 

phxsun2001

Involved - Posts
#19
Re: Missing Contract Review Records on big contracts

But the standard does call for records of specific actions or events, and I don't see how a signature addresses this, especially if it's not explicitly stated in the system documentation that implied consent is evidence of contract review. Absent a specific declaration to the contrary, a signature is only evidence that the contract has been agreed to, regardless of what anyone says. If verbal assurances that contract review had taken place were considered sufficient, the standard wouldn't be demanding evidence (records) of it.



You refer to "special requirements," but are the drawing and related specifications reviewed to determine whether there are errors or ambiguities? Is a review for the presence of necessary tools and gages done?



There are requirements for records of specific activities to be maintained. If those activities have taken place, but there is no record of them other than implied consent, then my opinion is that there are no records, and a finding is in order.
I wrote it up as a minor nonconformance. The Manager of the registrar I worked for disagreed and the owner of the registrar disagreed. It was removed from the list of findings.
 

BradM

Staff member
Admin
#20
Re: Missing Contract Review Records on big contracts

I wrote it up as a minor nonconformance. The Manager of the registrar I worked for disagreed and the owner of the registrar disagreed. It was removed from the list of findings.
I think worthy legitimate discussion can, and has, ensued as to whether this may be labeled as an observation or a minor. However, I'm not sure how I feel about people riding in and just removing your findings. If they did, I think they should provide some feedback/information to you regarding this action. Understand, I'm not there. There may be things that none of us can see, and facts that maybe even escape you at the moment. Yet, these facts should be displayed to you, where you can learn and improve as an auditor.

Yes, I know, welcome to life. But there is scarcely anything more demotivating than someone asking you to do a job, then second-guessing/redoing virtually everything you come up with.
 
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