Download ProsAndConsOfContractors_ContractorQualityAssurance

Pros and Cons of Contractors
Focus on Contractor Quality Assurance
Preston Ford Manager/Central Support
Central Arizona Division
Southwest Gas Corporation
Contracts at Southwest Gas
Southwest Gas uses contractors for most
operations activities including:
Construction
Leak Survey
Line Locating
Corrosion Control
Atmospheric Corrosion
Land Survey
Environmental Survey
Engineering Design
Customer Assistance
Computer Support
Customer Service
Inspection
Sewer Lateral Inspection
Pros & Cons
 Southwest Gas has never had a layoff
• Contractors come and go but not employees
 Contractors can be less expensive
• Savings from benefits, retirement, office space
 Contractors can bring flexibility & expertise
• Easier to add or subtract personnel for short term jobs
• Can bring in experts for specialty work
 Share the risk
Pros & Cons Continued
Loss of institutional knowledge
Lack of experience
Lack of loyalty
Risk of contractor going out of business
Constantly changing contractors due to
bidding policies
Bridging The Gap With Quality Systems
ISO 9000
Six Sigma
Total Quality Management
Theory of Constraints
Statistical Process Control
5 S
Philip Crosby
FOCUS ON QUALITY
 Quality is much too important to be left to the
quality control department
 Senior management must commit to quality if
things are to change
 Doing things right the first time adds
absolutely nothing to the cost of a product or
service.
Quality is Free –Philip Crosby
Four Absolutes of Quality
Quality is Defined as Conformance to
Requirements
Quality is Obtained Through Prevention,
not Detection
The Standard of Quality is Zero Defects
Quality is Measured by the Price of
Nonconformance
Crosby
Quality Policy
It is the policy of Southwest Gas Corporation
to achieve quality performance right from the
start in meeting the requirements of external
and internal customers.
Quality performance right from the start
means understanding who the customer is,
what the right requirements are, and meeting
those requirements without error, on time,
every time.
Quality Monitoring
 Staff Quality Assurance Department
 Quality Control Inspections
 Construction Quality Installation Program
(CQIP)
 Documentation Review
 Company/Contractor Quality Meetings
 Contract Terms & Conditions
Division QC Inspection
» Operations Manual QC Requirements
• Leak Survey
• Line Locating
• Corrosion Control
• Pipeline Contractors
» Dedicated Inspectors for Construction, Leak
Survey, & Line Locating
» Supervisor QC for Corrosion, Atmospheric
Corrosion, Sewer Lateral Inspection Project, Land
Survey, etc.
» Identification of quality issues by others
QC Inspection Forms
Contract Terms & Conditions
» Quality language added to contracts
» Requirements for contractor quality
assurance program/Quality Manager
» Requirements for contractor quality control
inspections
The Contractor should be the one to identify
that they have a problem and how they’re
going to fix it – Not the Company
Is Quality Free?
Quality is free, it’s not a gift, but it is
free
Quality can be measured by the cost
of quality; it is always cheaper to do
things right the first time.
– Crosby
Four Reasons For Quality Defects
 Not identifying problems
 Not determining the root cause of identified
problems
 Not correcting the root cause of identified
problems
 Not verifying the effectiveness of change
Error Prevention versus Find and Fix
Good Things Only Happen When They
Are Planned; Bad Things Happen On
Their Own.
The defect that is never created cannot
be missed
Crosby
All work is a process, a series of actions
that produce a result.
Converts inputs to
outputs
Suppliers
Inputs
Supplier Requirements
PROCESS
Outputs
Customers
Customer requirements
Process Improvement
 You can’t inspect in quality, it’s all about
prevention
 Tracking results of QC inspections to identify
error trends – both contractor and Company
QC’s
 Identify key issues and perform root cause
analysis with contractor
 Identify and implement corrective action
 Follow up to assure effectiveness
Root Cause and Corrective
Action
Problem
Effect
Cause
Corrective or
Preventative
Action
Remedial
Action
Actions
Line Locate Error Cause and Effect Diagram
Manpower
Methods
Machinery
Contractors
Inspectors
One-Call Law
Electronic Maps
and Records
Contractor
Procedures
Work Load
Paint and Marking
Materials
Weather
Traffic
Conditions
Material
Training
Drive Time
Environment
Statistics
Quality Control
Line Breaks
Measurements
Locate Errors
Management
Company
Procedures
Electronic
Equipment
Cost of Quality
The true cost of quality is the cost of doing
something wrong, the cost of doing it over to fix
the error, and the cost of lost productivity while
fixing the error. The cost is approximated by the
original cost, times three. For example, the true
costs for a line locate error are:
$ Original cost of locating the line
$ Cost of relocating the line
$ Cost of lost productivity while relocating
Things to Remember
 90% of Quality costs are management related
 Most employees don’t come to work to do a
bad job
 The answer is not always to fire the
contractor
 The company and the contractor work
together as partners
 If Quality is to be free, the contractor must
learn to do things right from the start.
 You can’t inspect in Quality
Philip Crosby
Everyone is for quality; no one is against
it - but it rarely happens by itself. Quality
improvement requires a long-term
commitment of time and effort. For these
efforts to succeed, each person in the
organization must become involved.
Quality Resources
 American Society for Quality at ASQ.ORG
 Quality Digest Magazine
 Quality Progress Magazine
 Quality Press
 Many other sources
QUESTIONS?