NQA-1-1989 and WTP A Small Business Opportunity for a Global Marketplace

1. NQA-1-1989 and WTP A Small Business Opportunity for a Global Marketplace U.S. Department of Energy Bechtel National, Inc.

2. The WTP Opportunity • Waste Treatment and Immobilization Plant (WTP) • Location: Hanford Nuclear Reservation • Client: Department of Energy, Office of River Protection • Cost: $5.7 Billion • Schedule: 2002 - 2011 • Estimated Procurement Awards: Nearly $2 Billion

3. The WTP Opportunity • WTP Objective • Assure that procured Important-To-Safety (ITS) materials and services meet established requirements and are therefore acceptable for use in the construction of the Waste Treatment Plant. • WTP Objective Achieved by • Suppliers who manage the quality of ITS materials and services through an approved NQA-1-1989 quality assurance program.

4. Nuclear Opportunities • DOE Nuclear Power 2010 Initiative • Means New Construction • 102 Current U.S. Nuclear Stations • Spare and Replacement Parts • Life Extension Modifications • Outage Support • Decommissioning

5. ISO 9000 Opportunities • Department of Defense Contracts • NASA Contracts • Major Fortune 500 Companies • International Opportunities

6. ISO 14000 Opportunities

7. Consistency of Quality Throughout the Organization Effectiveness of Work Practices Reduction of Internal Waste Because Processes are Well Defined and Consistently Applied Improved Job Satisfaction by Employees through Emphasis on Training, Adequacy of Resources, and Clear-Cut Understanding of Roles and Responsibilities Addresses Problems at Their Root Cause – Thus Eliminating the Problem Itself and Not Just the Symptom Prevents Problems from Recurring Opens New Business Opportunities Identifies Your Business as a Leader in its Field Internal Benefits of NQA-1

8. Levels of Quality Maturity

9. Common Requirements Of the 3 standards, NQA-1 requirements are the most stringent

10. WTP Supplier Quality (SQ) Expectations • Best-In-Class Product Quality • Effective Supplier Commitment to Quality – All Levels • Effective, Mature, and Compliant, Supplier QA Program Implementation • Verbatim Compliance to Bechtel Purchase Order (PO) Requirements and Engineering Document Submittals • Compliant and Defect Free Material/Equipment Delivered, the first time • Compliant and Defect Free Documentation Delivered, the first time

11. WTP Project Experience to Date • Failure to recognize that the supply of ITS materials and equipment may not be a business-as-usual condition • Failure to effectively implement, monitor, and assess the Supplier QA Program • Failure to read and comprehend all PO requirements • Failure to comply with all PO requirements verbatim • Failure to recognize that change is authorized only through PO Revision or Supplier Deviation Disposition Request (SDDR)

12. WTP Project Experience to Date (cont’d) • Failure to communicate or pass PO requirements across all affected elements of the Supplier organization • Failure to flow and enforce PO requirements through the supply chain • Failure to confirm assumptions or clarify conflicting, ambiguous, obscure, and/or vague PO requirements

13. Delayed Material and Equipment Shipments Delayed Invoice Payments Increased Cost of Rework Potential Back Charges Suspension of Work Unsatisfactory Supplier Performance Rating Increased Exposure to PAAA Regulatory Enforcement Negative Publicity Consequences of Not Meeting WTP Expectations

14. WTP Supplier Quality (SQ) Resources • Bechtel Supplier Quality Department Contacts for Existing Contracts • WTP Supplier Quality Representative • WTP Project Supplier Quality Supervisor • WTP Supplier Quality Manager • Additional Information Regarding This Presentation: • Dominic J. Canazaro 509-371-2349 • James L. Smith 509-371-2366