Material Control and Warehousing

Table of Contents
1. Introduction
2. Receipt of Material
3. Material Checking
4. Daily Material Receiving Record
5. Material Receiving Notice (MRN)
6. Equipment not Completely Acceptable
7. Material Delivered to Third Parties
8. Material Certificates
9. Material Certificate Register
10. Material Receiving Notice Register
11. Over, Short and Damage Report
12. Over Short and Damage Report Register
13. Recording of Material Stocks
14. Storage of Material at Site
15. Material Issue at Site
16. Access to Company Warehouse
17. Out shipment of Materials - Out shipment
18. Out-Shipment Report Register
19. Other Material Registers
20. Warehouse Purchase Order and Requisition Files
21. Vendors Cards
22. Disposal of Surplus
23. Scrap Control and Disposal
24. Special Piping Materials
25. Equipment Protection During Construction
26. Q.C. Procedure
27. Flow Scheme Material Handling Procedure
28. Material Control by Means of Computer (Piping)
29. Attachment summary
1. Introduction
The purpose of this section on material control and warehousing is to define the
standard procedure for receipt, checking, storing, protection and issue of materials for
construction as well as to outline the administrative procedures for material control. In
addition a procedure is included for piping material control by making use of a
computer.
The procedures in this section are written for a fairly large job. On smaller jobs, there
may not be the same numbers or titles of personnel available as are depicted here.
Nonetheless, the same administrative and operating procedures must be followed
unless the Project Procedure Manual calls for something different, or if permission is
received from Home Office Construction Department to vary from the procedure.

2. Receipt of Material
Prior to arrival of material on site, "advice notices" or other shipping notifications will be
received by the Material Supervisor. He will record the volume and nature of the
shipment and assign a storage location. These documents will be transmitted by the
Material Supervisor to the Warehouse Supervisor with a copy to the related
subcontractor(s) (so they can arrange for the off-loading facilities).
Upon arrival, the material is off-loaded onto the foundation or at the storage location
previously determined, in the presence of one or more checkers.
Whenever material arrives on site without advance notification, the Material Supervisor
will (if necessary in cooperation with the Project Construction Manager), allocate
storage and unloading location without any delay, to avoid demurrage on vendors
transport.
All truckdrivers will be directed by the guards to report to the warehouse first. If material
is to be unloaded at a point other than Company Central Storage the Warehouse
Supervisor will direct the trucks to the off-loading location. A Material Checker must be
present during off-loading. Truckdrivers delivering a large piece of equipment will be
met at the gate by warehouse personnel to guide them to the designated unloading
area.

3. Material Checking
The shipment must first be checked to see whether it conforms with "Packing Lists and
the Marking, Shipping and Invoicing Instructions" issued to vendors by the Home Office
Procurement/Shipping Department, being a part of the Purchase Order. Also the
Purchase Order, Purchase Requisition plus attachments for specific instructions on
loading, unloading, delivery, required official documentation, material certificates, etc.,
must be checked. On some projects a Purchase Order has been placed with a Shipping
Agent, to what extent the Shipping Agent is involved must also be checked.
If the shipment consists of unpacked goods, such as structural steel, pipe, etc., each
bundle or piece is checked off the carrier by the Checker. The same applies to boxes,
crates or other packed goods.
The Checker signs for the goods that are actually received, and not necessarily those
shown on the delivery document.
Whenever a subcontractor receives Material/Equipment directly, then a copy of the
delivery ticket signed by an authorized subcontractor's representative must be retained
by Company's Warehouse Supervisor and all administrative work performed as if
Material/ Equipment was received in Warehouse and issued to Subcontractor.
If it is not possible to check materials during off-loading the Material Checker signs
carrier delivery slip for "Material received - unchecked". Materials must be carefully
checked as to quantity, specification, and the condition, immediately after receipt.
Before signing carrier's freight bill, the Checker should count the number of pieces
received and examine for evidence of visible damage. Boxes, crates, and cartons
should be carefully inspected before taking delivery. If material is received damaged or
not in accordance with packing list or freight bill the delivering carrier should be
requested to make inspection of damage or discrepancies, and proper notation must be
made and acknowledged by carrier on original and copy of freight bill or packing list.
If concealed damage is discovered at a later date, the carrier should be notified
immediately and requested to make an inspection. Materials involved in any claim
should be set aside and redtagged until inspection is completed and liability has been
determined. A signed record is to be drawn up on the result by the parties concerned
and an "Over Short and Damage Report" be made. In the event that the vendor is not
responsible for safe custody of goods during transit, claims shall be processed against
the carrier.
The Material Checker is to acknowledge the receipt of the goods only by signing the
carrier's copy of delivery tickets together with the copy for warehouse records, showing
date of receipt and storage location ("Warehouse row G bin 26" or "Material yard row
B").
The Material Checker then checks the material thoroughly against the requisition and
the relevant Purchase Order to ascertain that the material meets the specifications and
is correct in quantity.
If there is any doubt as to whether or not specifications are being met the Material
Checker must report this to the Warehouse Supervisor for his action.
Upon receipt as outlined above, the material will be tagged to the extent necessary,
reflecting P.O. number and item number and then stored in the allocated location.
All small loose parts such as gaskets, packing rings, bolts, lubricators, gauges, gauge
glasses, dripwells, ink, charts, adjusting pins/keys, couplings, spare parts, etc.,
delivered as part of equipment, should be stored in bins in a separate location in the
warehouse and clearly tagged with the item number and P.O. number of the equipment.
Any drawings, material certificates, catalogues, operating instructions and manuals
relating to equipment are to be marked with equipment and P.O. number and turned
over to Warehouse Supervisor for transmittal to the Site Engineering Department.
When material arrives at site for which no Requisition or Purchase Order is available,
the Material Checker reports this to the Warehouse Supervisor who in turn checks with
the vendor, Home Office Purchasing Department, or the Field Buyer to see whether
material should have been received. If in order, a Purchase Order number should be
obtained.
Upon completion of the above exercise, the Material Checker will turn in delivery tickets,
freight bills, etc., to the Warehouse Administrator for compiling a Material Receiving
Notice. When a carrier demands freight charges for goods that have been ordered on
"free at site" delivery, the freight should be paid from Petty Cash Funds and the Vendor
backcharged via Project Accounting. This procedure is outlined in the Accounting
Procedure.

4. Daily Material Receiving Record

(Form BN-UC 17 Attachment 1)
The Material Administrator will enter all materials received (from information on freight
bills or packing lists), in a Daily Material Receiving Record DMRR immediately
after receipt.
This information should be available from hour to hour for the benefit of the construction
forces.
Copies of this report will be distributed before 09.00 hours the day after the receipt of
materials at site. The description of materials received will be in abbreviated form.
Distribution of the DMRR will be in accordance with the "Document Distribution" or
"Construction Coordination Procedure".

5. Material Receiving Notice (MRN)

(Form BN-UC 15 Attachment 2)
If no shortages, damages or discrepancies are found, a Material Receiving Notice
(MRN) is then prepared to acknowledge the receipt of the material against the relevant
Purchase Order. For materials arriving at site not covered by Requisition or Purchase
Order a MRN should be made, after obtaining a Purchase Order number, with note in
the remarks column "as no P.O./Requisition is available we are listing materials as
delivered to site". After receipt of P.O. and requisition, material should be checked
against these documents and a revised MRN issued, if required.
Material Receiving Notices must be issued and distributed without delay so that
payment may be made and advantage can be taken of any terms of payment.
For Field Purchase Orders the requisition number should be noted on the MRN. If an
Over Short and Damage Report is involved the Over Short and Damage Report number
must be noted on the MRN.
A separate MRN must be used for each shipment
Two or more shipments from one vendor must not be combined, even if they are
received the same day and are applicable to the same order. Materials from two or
more packing lists must not be combined on the same MRN, even if received on the
same freight bill. Generally, vendors invoice for each shipment or packing list separately
and the Material Receiving Notice is needed to support each invoice.
As Material Receiving Notices are made, the requisition or Purchase Order is to be
marked up to reflect receipt of the material.
The exact storage location is to be noted on the MRN. This document is used to update
the stock control system.
When the material received must be inspected by a specialist before an MRN is issued,
the Warehouse Supervisor will send an equipment check sheet to the appropriate
specialist (Pumps, Compressors, Heat Exchangers, etc., Electrical and
Instrumentation). A copy of this check sheet must be sent immediately to the Home
Office (Expediting Department and Accounting Department). This advises them that
material has arrived on site and that a MRN will be issued as soon as inspection is
done. After the specialist has inspected the equipment (which must be done within three
working days), the check sheet is returned to the warehouse and a MRN issued
immediately.
When goods being received are fully listed or described upon the packing list, this
packing list can be used as an attachment instead of relisting them all on the MRN.
The Warehouse Supervisor is responsible that the MRN is checked carefully, location is
given, etc. All Material Receiving Notices will be signed by the Warehouse Supervisor.
Material Receiving Notices are printed in blocks with a white original, and colored
copies, and are to be distributed in accordance with the "Document Distribution List".

6. Equipment not Completely Acceptable

Occasionally a piece of equipment is received on site with discrepancies which involve
correction costs of a minor nature compared with the total Purchase Order value of the
item.
So that Company or Client may take advantage of discounts available for quick
payment and also in order not to antagonize vendors by withholding payment of a large
sum because of comparatively minor discrepancies, a "partial MRN" will be completed
with the details of the discrepancy stated on an Over Short and Damage Report (OS&D
Report) with some indication as to "cost to field" of rectification. This enables the Home
Office Purchasing Department to resolve with the Accounting Department how much of
the vendors invoice should be paid.
The Backcharge to Vendor procedure will be followed to ensure that Company does not
absorb any cost relative to rectification.

7. Material Delivered to Third Parties

When materials are delivered by a vendor to third parties (e.g. motors to pump vendors,
panel mounted instruments to panel vendors etc.) the items are received on site "built
together". An MRN for each separate component must be issued, e.g. one for the motor
and one for the pump.

8. Material Certificates
Piping Materials
Each delivery of piping materials, authority and non-authority, will be accompanied by
the proper material certificates.
The Material Checker will check the materials against the certificates. Any
discrepancies found on manufacturer's symbol, heat numbers, etc., will be notified to
the Materials Supervisor immediately for action via the H.O. Inspection/Expediting
Department.
An O.S.& D. Report will be issued recording the certificate and/or material
discrepancies. Materials are stored in a separate location and labelled with the
corresponding O.S.& D. Report Number.
The O.S.& D Report is cleared upon receipt of the correct certificate or upon
replacement of the material as applicable.
Under no circumstances will materials be released for construction unless the correct
certificate is available.

9. Material Certificate Register

The register will show:

 Company Certificate Number

 Fabricators Code
 Charge Number
 Short Material Description
 Schedule/Pressure Rating
 Size
 Quantity
 Any other information required by contract
On completion of the project, Home Office will produce a certificate register following
Client requirements from data accumulated from the material certificate register.

10. Material Receiving Notice Register

(
An MRN Register will be maintained by the Warehouse Supervisor.
This register must show:

 MRN sequence number.

 Date materials received.
 P.O. number.
 Vendor.
 Material Description.

11. Over, Short and Damage Report

In all cases of materials damaged, lost in transit, short or over shipped by vendor,
notation must be made on the Material Receiving Notice and Over, Short and Damage
Report (OS&D Report) completed by the warehouse.
It is imperative that a clear cross-reference is made, i.e. Material Receiving Notice
number on Over Short and Damage Report and Over Short and Damage Report
number on Material Receiving Notice.
In the remarks column of the Over Short and Damage Report, a note must be made as
to the corrective action to be taken. Company Home Office Procurement/Expediting
Department is responsible for this action for Home Office Purchase Orders, including
update of Computerized Material History file if applicable.
In the case of an overshipment on a Home Office Order, this form advises Home Office
if the overshipped quantity can be used by field or if it should be returned to vendor for
credit.
Field makes no disposition of this material, either as to use or return until advised by the
Home Office. If to be returned, the Home Office Expediting Department will secure
shipping instructions from the vendor and advise the field by means of an AVO or telex
authorizing shipment.
In some cases, it will be the responsibility of the client to decide if overdelivered items
can be accepted. In such cases an Over Short and Damage Report is not required. The
Client approves the Material Receiving Notice which should state "Overdelivered
quantities will be accepted by Client".
When a shipment from vendor is short, the Over Short and Damage Report advises
Home Office whether or not materials are needed and the Home Office Expediting
Department takes the necessary steps to secure materials or credit from the vendor. If
the shortage is caused by loss in transit, and the material is not urgently needed, action
should be withheld for a reasonable length of time to allow the carrier to attempt to trace
and locate lost items.
When materials/equipment are received damaged or not according to specification, a
copy of the O.S.& D. Report is forwarded to the Site Engineer for the issue of a Non-
conformance Report.
When materials/equipment are received damaged, a copy of the freight bill or packing
list with acknowledgement of the carrier (see Item 3.0 Material Checking) should be
attached to the Over Short and Damage Report.
Proper notations on Over Short and Damage Reports advise Home Office of all
contingencies involved, what action is needed, and whether action is up to the Home
Office or Field Office.
Claims for concealed damage can be very troublesome and the importance of careful
checking as soon as possible after receipt of material at site cannot be over-
emphasized.
Whenever an Over Short and Damage Report is cleared, a Material Receiving Notice
should be issued covering clearance of the Over Short and Damage Report with
reference to both the Over Short and Damage Report and the Material Receiving Notice
on which the discrepancy was originally reported.
If claims on vendors or carrier involve repairs by field forces (after authorization by the
Project Construction Manager or Home Office A.V.O.), costs of materials, equipment
and labor must be accumulated and included in a claim (see Backcharge Procedure).
Over Short and Damage Reports shall be distributed in accordance with the "Document
Distribution List" or "Construction Coordination Procedure".

12. Over Short and Damage Report Register

(Form BN-UC 22 Attachment 4)
The purpose of the register is to maintain a record of all Over Short and Damage
Reports to ensure that the Home Office Expediting and Accounting Departments are
informed of all reports.
This register shall be maintained by the Warehouse Supervisor. Once a month a listing
of all open Over Short and Damage Reports shall be mailed to the Home Office
Expediting Department with a copy to the Project Construction Manager (and, when
required, to the Client's Resident Engineer).
All claims on carriers or vendors should be controlled by assigning a Backcharge
number and recording it in the Backcharge Register.
Over Short and Damage Report Register
(Form BN-UC 22 Feb. 80 Attachment 4)
Register will show:

 Over Short and Damage Report sequence number.

 Date.
 Purchase Order number.
 Material Receiving Notice number.
 Vendor.
 Description.
 Material Receiving Notice clearance number.
 Remarks.
 Non conformance report, if relevant.

13. Recording of Material Stocks

(Form BN-UC 46 Attachment 5)
All materials received shall be entered on Material Stock Record Cards, which reflect
particulars as shown on the Material Receiving Notice, Over-Short Reports and
Purchase Orders. The complete description of the material, item number and the exact
storage location shall be included.

14. Storage of Material at Site

Upon receipt, all material not directly delivered to the works or Pipe Fabrication Shop,
should be stored either in the warehouse or material yard.
All small materials, instruments, electrical material, tubing, small pumps, etc., must be
stored inside warehouse.
All large pipe, fittings, valves, etc., will be stored in the warehouse or yard. Materials will
not be stored directly on the ground. An underlayer of wood or suitable material should
be used.
All pipe must be stored by type, size and schedule on sleepers with at least 10 cm slope
for water drainage and pipe ends (plain or threaded) checked for satisfactory
caps/protection. If not already done by vendors, the Warehouse Supervisor is
responsible that all material stored either in the warehouse or yard is properly marked
and color coded in accordance with the specification.
Hours and materials spent on this marking and coding shall be reported by the Materials
Supervisor for backcharge purposes.
This color coding must be maintained throughout the storage/ construction period. Each
member of the Material Department and Specialist Engineers will be supplied with a
copy of the marking and color coding procedure to facilitate the application of correct
marking upon the material when received and the traceability of the material throughout
the construction period.
Corrosion protection is either the Subcontractor's or the Warehouse responsibility.
Warehouse Supervisor shall check regularly that this work is properly done.
The Materials Supervisor will check on a regular basis the handling and storage of the
materials at the subcontractor's shop.

15. Material Issue at Site

(Form BN-UC 74 Attachment 5A)
All materials will be drawn from the warehouse on a Material Requisition which must
bear the signature of the Subcontractor's authorized Supervisor or the Company
Specialist.
A list of authorized signatures should be kept and should show the following:

 Name of employee (Printed).

 Function (Title).
 Signature Specimen.

A block of numbers shall be allocated to each subcontractor. Material requisitions shall

reflect relative item numbers, quantity, description, drawing and/or Isometric number,
and area and/or unit number. These requisitions shall be issued in duplicate, the original
for the warehouse, the copy for retention by the drawer of the material.
Material requisitions must be checked carefully before material is issued to assure that
specific allocation is given, and that subject material has not been previously issued.
Whenever material has been previously issued, the Material Administrator should write
on requisition: "Material already issued, see previous requisition number . . . . . . . . .".
Material should never be issued twice. If delivered by error, the Warehouse Supervisor
will collect this material from the Subcontractor.
The Warehouse Supervisor will receive from the Site Engineer a copy of all piping
iso/drawings and their revisions. All issue of material must be marked with red pencil on
these drawings. This is for control purposes and to ensure that no material has been
issued twice.
Upon receipt of a revision to a drawing or Isometric materials have to be checked
against the previous issue of the document. In the event more materials are required,
Company should prepare this material and inform the Subcontractor accordingly. Where
materials have been deleted, the Subcontractor shall be requested to return this
material to the warehouse if not necessary for drawings/ requisitions in hand for issue.
The Subcontractor is informed in writing when deleted materials from one
drawing/requisition have been allocated to another drawing/requisition.
After the relevant materials have been issued, the material requisition is posted in the
Materials Stock Record Card.
All requisitions received in the warehouse must be filed consecutively according to
requisition number and per subcontractor. All finals must be filed together. All partial
requisitions must be filed separately.
If materials requested on a requisition are not in stock, the Warehouse Supervisor
should check if they are on order. If this is the case, the requisition should be filed in an
"outstanding requisitions" file. This file should be periodically checked to see if any
requisitions can be further completed. If outstanding materials are not on order he will
send a photostat copy of the requisition to the Materials Supervisor for further action.
Where piping material is required, other than for an iso/ drawing, e.g. for temporary
lines, the requisition shall be approved by the Project Construction Manager or his
delegate.
Under no circumstances will material be issued from the warehouse or storage yard to
Subcontractor without the presence of a member of Company's Material Department
and use of all required material control documents.

16. Access to Company Warehouse

The following personnel have access to the Company Warehouse at all times during
working hours. They are requested to notify the Warehouse Supervisor before entering
the Warehouse:

 Project Manager
 Project Construction Manager
 Area Superintendent
 Site Engineer
 Office Manager
 Material Supervisor
 Safety/Security Officer
 Construction Specialist
 Client's Representatives

All other personnel entering the Warehouse must be accompanied by the Warehouse
Supervisor or Material Administrator or any one of the personnel mentioned above.
17. Outshipment of Materials - Outshipment
Report (OSR)
(Form BN-UC 18 Attachment 6)
Materials which are shipped from the job site, must be covered by an Out-Shipment
Report.
This Out-Shipment Report must reflect the Out-Shipment Report sequence number,
quantity, item number and full description of the material, together with the Purchase
Order Number upon which the material was originally received.
Full details of consignee's name and address, reason for the shipment and method of
shipment must be given. Out-Shipment reports will be signed by the Materials
Supervisor. The Client may request to countersign these reports. The carrier must sign
legibly for receipt of the goods and insert the registration number of the vehicle carrying
the goods.
Out-Shipment Reports must be posted on the Materials Stock Record Cards. If an Out-
Shipment Report involves material being sent out for repairs or replacement, a Material
Receiving Notice must be made when material is returned/replaced with a note:
"This MRN clears OSR no . . . . . . . .. partially/in its entirety", whichever applies. Material
Receiving Notices for clearance of Out-Shipment Report must be noted in the Out-
Shipment Report Register.
Subcontractor's property which is moved from the site on their own Out-Shipment form
must first be checked by the Company Warehouse, and a properly completed Company
Out-Shipment report must be attached as cover sheet.
The Materials Supervisor will sign Out-Shipment Report after obtaining approval from
Project Construction Manager.
Materials on Company Home Office Purchase Orders should be out-shipped only after
obtaining AVO or telex approval from the Home Office Expediting/Purchasing
Department. An Out-Shipment Report Register will be maintained in Warehouse by the
Material Administrator.

18. Out-Shipment Report Register

(Form BN-UC 19 Attachment 7)
This register will show:

 Out-Shipment Report sequence number.

 Date.
 Name of consignee.
 Description of material.
 Remarks (used also for Material Receiving Notice clearance number).

A copy of the Out-Shipment Report must be mailed to the vendor. Further distribution of
Out-Shipment Reports should be made in accordance with "Document Distribution" or
"Construction Coordination Procedure".

19. Other Material Registers

Besides a register for Material Receiving Notices, Out-Shipment and Damage Reports,
Out-Shipment Reports, the Warehouse will maintain the following registers:
19.1 Cable Reel Register
(Form BN-UC 13 Attachment 8)
This register will show a listing of all cable reels received at site. Including the name of
the vendor, size and quantity of cable, date received, Purchase Order number, Material
Receiving Notice number and cable reel number, and whether returnable or not.
Whenever empty reels are returned, the Out-Shipment Report number and date of
return must be posted in this register.
19.2 Oxygen and Acetylene Cylinder Register
Only when purchased by Company.
19.3 Gasoline and Oil Drum Register - Returnable Drums
Only when purchased by Company.
19.4 Special Container Register - Returnable Containers
In some cases, materials are received at the job site in containers for which special
charges are made. These are charges on invoices for material involved and credited on
return. In other cases, they are charged only if not returned within a reasonable time to
vendor. Those items received on Home Office Purchase Orders will be covered by an
AVO from Home Office Purchasing Department advising shipping instructions and
authorizing return when empty.
Items on Field Purchase Orders should be reported by Materials Supervisor to Job
Buyer.
19.5 Rail Car Log Book
When materials or equipment will arrive on site or nearby by rail, a rail car log book
should be used that will show rail car number, time and date of arrival. After the railroad
company is advised that the rail car is emptied and ready for transportation the actual
time and date the car is taken away by them should be noted in the log book. In
addition, the log book will show the Purchase Order number and a brief description of
the material received.
20. Warehouse Purchase Order and Requisition Files
The Material Administrator shall maintain Home Office Purchase Orders, Requisitions,
Field Purchase Orders and Requisitions files. The right hand side of the folder will
contain the requisition, Purchase Orders and Amendments. The left hand side of the
folder will contain Material Receiving Notices, Out-Shipment Reports, Over Short and
damage Reports, packing lists and all other documents pertaining to the Purchase
Order.
The Purchase Order folder is an "open file". When the final Material Receiving Notice
has been issued, Purchase Order files will be marked "Complete" and transferred to
another section of the filing cabinet.

21. Vendors Cards

The Material Administrator will maintain for Field and Home Office Purchase Orders a
card system indicating names of vendors, description of material and Purchase Order
number.
Cards will be filed alphabetically. This card system helps to locate Purchase Orders if
only the vendor's name is known.

22. Disposal of Surplus

It is our normal practice to dispose of all surplus material as soon as practical.
The procedure for disposing of this material will vary depending upon the type of
contract. If materials were purchased on a reimbursable contract all materials actually
belong to the Client, and the Project Construction Manager disposes of the material in
accordance with the Client's wishes as expressed through their field representative.
However, if the Client requests Company to dispose of the material, this will be
accomplished as stated below:
Approximately at 85% of job completion all surplus material is to be inventoried.
The inventory will list the item number, Purchase Order number, vendor and description
and value. Three copies should be mailed to Home Office Purchasing Department. The
Client should also be contacted to determine if they are interested in acquiring the
materials.
The Purchasing Department will investigate possibilities for disposal of the material and
subsequently advise field as to what action is to be taken. After the first surplus list has
been issued, revisions to this list must be issued regularly.
All shipments of material from the job shall be covered with an out-shipment report.
23. Scrap Control and Disposal
23.1 Scrap Control
Sub-contractors are responsible for seeing that economical use is made of piping
material with a minimum of scrap. All material moved to the scrap location must be
inspected by the Piping Specialist. No alloy material may be scrapped without the
permission of the Piping Specialist.
No fittings may be modified without the permission of the Project Construction Manager
e.g. no. 90° elbows will be cut to make 45° elbows. If for some emergency such a
modification is made, the Company Piping Specialist must instantly notify the Material
Supervisor in writing giving full particulars.
In addition, if a repair or change is made, every effort must be made to return flanges
and fittings to the warehouse. Flanges in particular can be sent to an off-site machine
shop for machining on an economical basis for later reuse.
Scrap collection locations will be available at site. Subcontractors and the Company
Piping Specialists will be responsible for a weekly collection of scrap in their respective
areas and dumping at the indicated scrap fill locations. All alloy material shall be kept
separated by types.
23.2 Scrap Disposal
On a reimbursable job, scrap disposal will be discussed with the Client and actions to
be taken incorporated in the Construction Coordination Procedure.
On a lump sum job it is the responsibility of the Project Construction Manager to
dispose of scrap in the most economical manner and proper (auditable) records shall be
kept.

24 Special Piping Materials

A separate storage area in warehouse and yard may be alloated to special piping
materials. This decision is to be made by the Materials Supervisor and approved by the
Project Construction Manager.
Upon receipt, materials are thoroughly checked against the requisitions and the relevant
Purchase Order to ascertain that the material meets the specifications and is correct in
quantiy.
Color coding is verified in accordance with proper specification. Paint shall be of good
quality suitable for outdoor use, if not suitable, remedial action will be taken
immediately. Color coding will be checked on a regular basis and upgraded if
necessary.
Materials are checked against certificates, manufacturer's symbol and charge numbers
are verified.
Taking into account the long delivery delay on most special types of material, no extra
material, such as for field changes, lost material by Subcontractor, etc. will be issued
unless approved by the Construction Superintendent.
The Materials Supervisor will notify the Home Office immediately of the additional
material requirement even though it might be covered by contingency material.
Pipe Lengths
The charge number will be transferred as required by the specification or applicable
authority. The stamping will be done by an authorized representative from the
Mechanical Subcontractor in accordance with the instructions of the Company Quality
Assurance Manager.
Material Administration
The material administration will be handled in the same manner as for other material.

25. Equipment Protection During Construction

25.1 General
This section covers the minimum requirements for the protection of equipment against
deterioration from the time it is received at the construction site until it is placed in
operation. It should not be applied to equipment handling extremely high purity
products, where special instructions are required. In addition, additional or special
procedures may be required to protect equipment against more aggresive environments
such as extreme cold or heat, saltwater, spray, wind blown dust or sand. These
additional requirements will be furnished in the "Construction Coordination Procedure.
It is assumed that materials and equipment are adequately protected for shipment and
storage by the manufacturer in accordance with Purchase Order specifications or
manufacturer's standard practice.
If not protected by the vendor as specified in the Purchase Order, Company Home
Office Procurement must be notified immediately for the purpose of backcharging.
The field must then provide adequate protection.
Where proper protection is not evident, the field shall notify Company Home Office
Procurement immediately and make sufficient examination to ascertain that the
equipment has not been damaged by the omission. Additional protective measures
specified by the equipment manufacturer shall be performed.
25.2 Documentation
Records shall be kept to document the protection given the equipment while the
manufacturer's guarantee is in effect. These records shall be kept from the date of
arrival of the equipment at site, showing dates of application of services of each piece of
equipment.
25.3 Rust Preventives
The rust preventives referred to herein are RUST-BAN compounds. Some Clients may
produce their own rust preventives, in which case their equivalent preventives shall be
used.
Preventive suppliers can give more information as to coverage, application temperature,
method of application, drying time and method of removal.
All interior and exterior surfaces shall be clean and dry before any rust preventive
materials are applied. For cleaning of surfaces mineral spirits or solvent shall be used.
Kerosene or gasoline shall not be used as cleaning agent.
RUST-BAN 357
Reccommended for bearings and internal faces.
All rotating equipment protected by this compound, shall be turned over once per week,
to keep bearings and other critical surfaces coated. This rotating should be done
manually. This must not be carried out with tools, which will damage or mark motor
shafts.
Drain water from all reservoirs once a month and fill up reservoir to the proper level. If
the fluid becomes dirty or contaminated water, reservoir shall be drained, flushed with
solvent and refilled.
RUST-BAN 373
Recommended for exterior surfaces. This preventive has no lubricating properties, thus
before placing protected part in service, it should be removed from bearing surfaces,
threads, or areas that come in contact with lubricants.
MOISTURE ABSORBANTS
Where internals, etc., would be very difficult to protect from rust, moisture absorbants
are used for protection. When equipment arrives at the site, the seals shall be examined
and damaged seals repaired or replaced, and the absorbant replaced, if necessary.
Seals shall be protected until the equipment is serviced for start-up.
Moisture Absorbants shall be renewed at time intervals as specified by the
manufacturer.
25.4 Machinery
On receipt at the construction site, casing and internals are to be inspected through
piping nozzles, etc., to see if rust preventive has been applied. Protection to be done as
follows:
Turbines, Blowers, Agitators, Gear Cases, Centrifugal Pumps and Compressors.
- Flush bearing brackets and gear cases with solvent until clean. Fill with RUST BAN
357 at least till the shaft and turn shaft several times to apply a protective coat to the
entire shaft and bearings.
- Clean shaft couplings and exposed machine surfaces and coat them with RUST-BAN
373.
- If a pump is shipped with mechanical seals installed, fill the stuffing box with RUST-
BAN 357. When mechanical seals are integral with the pump, and the pump is not
protected by moisture absorbants or a blanketing gas, the entire pump should be filled.
- Turbines shipped with carbon rings installed, fill seal chamber with RUST-BAN 357.
- Vertical pumps shall be filled with RUST-BAN 357 after they are moved to their service
location.
- Intermediate shaft supports, if necessary, are to be provided to protect against shaft
sag.
- Spare rotating elements are to be stored according manufacturers instructions.

25.5 Motors and Generators

Motors, designed for indoor use, and generators are to be stored indoors.
Motors, designed for outdoor use, can be stored outside free from ground with
protective covering, permitting good ventilation.
If space heaters are furnished within the units, they shall be connected to be continuous
power supply of the proper rating, when stored outside, or installed at their service
location.
Brushes shall be removed from brush holders, and shall be stored in a dry place, where
condensation will not occur.
Coat couplings and exposed machined surfaces with RUST-BAN 373.
Measuring and recording of insulation resistance values to be carried out as stated in
the "Construction Coordination Procedure".
25.6 Transformers
Transformers intended for outdoor installation can be stored outside.
Large indoor transformers may be stored outside, if raised above grade to prevent any
damage from surface water and if a shed roof and tarpaulin siding are provided.
Where units are supplied complete with insulation liquids/gases, these should be
checked on arrival at site. If level or pressure is not within vendor's tolerances, possible
leaks should be located and rectified. Monthly checks on level/pressure should be made
and rectification work carried out when necessary.
Any separately supplied insulation liquid may be stored outside, without protective
covering, if laid on their side at an angle of 45°, with the large bung downwards.
25.7 Switchgear, Starters and Control Equipment
Equipment shall be stored indoors in a dry, warm place where condensation of humidity
cannot occur.
If high relative humidity or large, rapid changes in temperature are expected, heaters
shall be used to maintain the temperature of approximately 5°C above minimum daily
temperature.
If space heaters are furnished within the equipment, they shall be connected to a
continuous source of power of the proper rating.
25.8 Cables
Rotate reels of properly insulated lead sheathed cable 90° every two weeks to prevent
migrating oil from collecting at low points.
Measure and record gas pressure in low pressure gas filled cable when received and
weekly thereafter.
If falling pressure indicates a leak in the cable, maintain same with dry nitrogen until
leak is sealed.
25.9 Batteries
Batteries should be stored indoors in an inactive area to avoid accidental breakage.
Batteries that have been shipped dry and charged shall have the seals checked
regularly and in case of damage, repaired according to vendor's instructions.
Nickel-cadmium and Lead-acid batteries that have been shipped dry do not require
maintenance. For those shipped wet, electrolyte levels should be checked and filled as
required. These batteries should also be recharged tri-monthly. Watch for over-
charging.
25.10 Instruments
For instruments a warm, dry and vibration free environment in a secure under cover
storage area is required. Recommended environment conditions are temperature range
of 15° to 30° and humidity between 30 to 40%.
Instruments can be stored in the above environment for up to four months in their
shipment cases. Where cases/packing have been opened the plastic coverings are to
be retained and resealed in the manner they were shipped. Panels to be stored in their
shipping cases up-right until moved into the control house.
Instruments installed in outdoor locations shall be protected from weather and
mechanical damage.
25.11 Piping
Any protective coatings/paintwork on piping shall be maintained throughout the storage
and construction period, as well as the colour coding on piping.
25.12 Flanges
Flanges from 2" and up can be stored outdoors on timber floor or palets.
All flange faces to be cleaned with a solvent if required and protective coating applied
and maintained.
When machinal flange face is damaged, remedial work has to be carried out before use.
Flange facings with 125 RMS (for use with spiral wound gaskets) MUST be remachined
before use, if damaged.
25.13 Valves
Manually operated valves from 2" and up can be stored outside, on a timber floor or
pallets.
Large automatic control valves such as slide valves, motor operated valves may be
stored outdoors, on timber floor and with suitable covering over each valve.
Valves stored outdoors shall be inspected every two weeks and coating or rust
preventive renewed if required. On arrival at the site, when spot check reveals remove
all flange covers, clean flange faces with solvent and coat with a rust preventive. Inspect
valve stems and valves internals. It necessary clean with solvent and apply rust
preventive coating seat all manually operated valves. Plugvalves and soft-seated
ballvalves to be stored in open position. Valves to be stored with spindles in vertical
position.
Valve handwheels must not be used for lifting valves, slings etc. must not be passed
through valve bore during handling. Plug any open threaded connection.
Each valve shall be fitted with an aluminium tag securely attached with stainless steel
wire.
Each tag shall be clearly stamped with the valve item number. Tags shall normally be
closely attached to the gland bolting. Tags on valves that do not have gland bolting may
be attached to the handwheel or other appropriate locations. Tags shall not be attached
through boltholes of end flanges or where handling might be subject to damage or loss.
If not done so by vendor, warehouse to take action.

26 Q.C. Procedure
Reference should be made to the Field Construction Manual - Quality Control - Section
20, "Care and protection of equipment during construction". If there is a difference in
interpretation between this procedure and the one stated above, the procedure which
gives greater protection takes precedence.
27 Flow Scheme Material Handling Procedure

28 Material Control by Means of Computer (Piping)

28.1 The site computerized material Stock Control System is programmed for:
(a) Receiving of data from the Home Office main frame computer.
(b) Transmittal of data from the site to the Home Office main frame computer.
(c) Various Site Applications:
- Registration of certificates - update.
- Registration of material receipts.
- Material allocation per given drawing or batch of drawings.
- Production of material lists for issue of materials.|
- Automatic material stock level update.
- Registration of material issued per single item of a single drawing.
- Registration of material issued per given batch of drawings.
28.2 A telephone link between the Home Office main frame computer and the PC at the
Site Office will be established.
Data received from the Home Office:
- purchase orders information on a continuous basis.
- material requirements per isometric upon request from site.
- material description data.
Data transmitted to the Home Office:
- material receipts on a daily basis to complete the PMC procurement cycle.
28.3 Material Receipts
All data on receipts of material will be entered into the PC on a daily basis.
By entering this data the following occurs:
- stock levels are automatically updated
- a data file is written which is then transmitted to the Home Office via the link.
28.4 Certificate Register
The information on purchase orders transmitted by the Home Office is written
automatically in the certificate data file.
The following additional data required to be entered:
- Company certificate number
- Charge number
- Quantity
- Vendors code
- Other number/codes required by contract.
28.5 Material Availability and Shortage
Data transfer on material take-off is requested from Home Office on a batch of drawings
following the construction priority schedule and following the backlog requirements of
the Piping Prefabrication Subcontractor.
A "sample" report is run on the site PC that shows availability of material. This may be
done per batch of drawings or for a small group of drawings which could represent a
particular piping system. This report will show those isometrics, (prefabrication and/or
erection) and Material Lists that can be met from the existing warehouse piping material
stock.
The report will show Material Lists where only partial issue is possible. In these cases
the missing material is highlighted. This information is used as a guideline for priority
expediting purposes.
28.6 Issuing of Materials
For isometrics indicating that materials are available on request, a Material List will be
printed in duplicate which is used for the issue of materials to the Subcontractor. The
Subcontractor's authorized representative signs one copy for the receipt of the material
which is held in the warehouse file and one copy is held by the Subcontractor.
- The printing of the Materials Lists will automatically reduce the material stock levels in
the PC.
The Material Lists may be requested:
- for prefabrication items only
- for erection items only
28.7 Issue of Extra Materials to the Erection Contractor and/or Returns of Materials to
the Warehouse
The issue of extra materials on drawings for revisions, field changes, etc. will be done
by means of a Foreman Requisition. The Subcontractor signs copy of the Foreman
Requisition for the receipt of the material. The Foreman Requisition is entered in the PC
to update the stock control system.
Materials returned to the Warehouse are done by a negative Foreman Requisition. The
negative Requisition is also entered in the PC to adjust the stock.
28.8 Material on Hold
It may occur that systems of high priority cannot be fabricated or erected due to missing
material. The PC Material Control System allows to put the part of the available material
"on hold" in order that it is not allocated to a non-priority drawing. The "hold" can be
released if required.
28.9 Reports Available from the PC Material Stock Control System
- Material available overall
- Quantity of material issued/drawing
- Certificate allocation by given purchase order
- Certificate of allocation by given charge number
- Material shortage by given drawing number or per batch of drawing