API Specification Q1 Tenth Edition 5.9.3 Release of Nonconforming Product Under Concession

QMS for Oil and gas 14 Minutes

The release under concession of nonconforming product that does not satisfy manufacturing acceptance criteria (MAC) shall be permitted when the organization’s relevant authority has conducted an evaluation, and authorized release provided that:
a) products continue to satisfy the applicable DAC and customer criteria; or
b) the violated MAC is determined as unnecessary to satisfy the applicable DAC and/or customer criteria; or
c) the DAC is changed and the affected products satisfy the revised DAC and associated MAC requirements. When the DAC was previously agreed with customer, the DAC change shall be authorized by the customer.
The organization shall not release product not conforming to DAC or contract requirements without customer authorization.

Release of Nonconforming Product Under Concession is a controlled process in which nonconforming products are released for use or delivery under specific conditions agreed upon by relevant authorities and, when necessary, the customer. This ensures that any deviations from standard requirements are documented, evaluated, and approved before the product is used or shipped.Releasing nonconforming products under concession is a structured process that ensures deviations from standard requirements are properly evaluated, documented, and approved before use. This helps maintain product integrity, compliance with standards, and customer satisfaction while allowing flexibility in handling minor nonconformances. By following these steps, an oil and gas organization can effectively manage and control nonconforming products.

Key Aspects of the Process:

  1. Identification and Documentation of Nonconformance
    • Identify Nonconforming Product: Detect nonconformities during inspections, testing, or customer feedback.
    • Document Details: Record the nature of the nonconformity, affected quantities, and where in the process it was identified.
  2. Evaluation and Decision Making
    • Assess Impact: Evaluate the severity and impact of the nonconformity on the product’s performance, safety, and compliance.
    • Determine Feasibility: Assess if the product can still meet essential requirements with the nonconformance.
  3. Authorization for Concession
    • Internal Authorization: Obtain approval from relevant internal authorities, such as the QA Manager, Engineering Manager, or Production Manager.
    • Customer Approval: When required, seek approval from the customer to release the nonconforming product.
  4. Record of Concession
    • Concession Documentation: Maintain a detailed record of the concession, including:
      • Description of the nonconformance
      • Assessment and justification for release
      • Conditions for release or use
      • Approvals from internal authorities and customer (if applicable)
  5. Release and Control
    • Controlled Release: Ensure the product is released under controlled conditions specified in the concession documentation.
    • Traceability: Maintain traceability of the nonconforming product released under concession.
  6. Monitoring and Review
    • Monitor Performance: Monitor the performance and feedback of the nonconforming product in use to ensure it meets the agreed-upon conditions.
    • Review Concession Process: Periodically review the concession process to identify improvements and ensure compliance with standards.

Steps for Releasing Nonconforming Product Under Concession

  1. Identification and Documentation of Nonconformance
    • Detection: Nonconforming product is identified during routine inspection.
    • Recording: An NCR (Non-Conformance Report) is initiated with details of the nonconformance.
  2. Evaluation and Decision Making
    • Impact Assessment: The QA team assesses the impact of the nonconformance on product performance and safety.
    • Feasibility Determination: Engineering determines if the product can still meet critical requirements.
  3. Authorization for Concession
    • Internal Review: The NCR is reviewed by QA, Engineering, and Production managers.
    • Customer Approval: If required, the customer is notified and approval is sought for the release of the nonconforming product.
  4. Record of Concession
    • Concession Documentation: A concession form is completed, detailing:
      • Nature of the nonconformance
      • Justification for release
      • Conditions for use
      • Approvals from internal authorities and customer
  5. Release and Control
    • Controlled Release: The nonconforming product is released for use or delivery under the specified conditions.
    • Labeling and Traceability: The product is labeled to indicate it is released under concession, ensuring traceability.
  6. Monitoring and Review
    • Performance Monitoring: The product’s performance is monitored to ensure it meets the agreed conditions.
    • Process Review: The concession process is reviewed periodically to ensure effectiveness and compliance.

Example of Concession Documentation

FieldDescription
Nonconformance Report IDNCR-2024-001
DateJune 10, 2024
Product DetailsProduct XYZ, Batch No. 12345
Description of NonconformanceMinor dimensional deviation
Impact AssessmentDeviation does not affect product performance
JustificationProduct still meets critical performance criteria
Conditions for UseOnly for non-critical applications
Internal ApprovalsQA Manager
Engineering Manager
Customer ApprovalCustomer Representative
Date of ApprovalJune 12, 2024
Release DateJune 15, 2024
Monitoring PlanPeriodic inspection during use
Review DateDecember 15, 2024

The release under concession of nonconforming product that does not satisfy manufacturing acceptance criteria (MAC) shall be permitted when the organization’s relevant authority has conducted an evaluation, and authorized release

The organization’s relevant authority, typically comprising individuals with appropriate expertise and decision-making authority, conducts evaluation and authorizes release of nonconforming products under concession through a structured process. Here’s how they can do it:

1. Nonconformance Assessment:

  • Review Nonconformance Report (NCR): The relevant authority begins by reviewing the NCR detailing the identified nonconformance. This report provides information on the nature, location, and potential impact of the nonconformance.

2. Impact Assessment:

  • Assess Severity and Impact: Evaluate the severity and potential impact of the nonconformance on product functionality, safety, compliance, and customer requirements.
  • Consider Risk Factors: Take into account any associated risks or consequences of releasing the nonconforming product under concession.

3. Feasibility Determination:

  • Evaluate Feasibility: Assess whether the nonconforming product can still meet critical requirements and whether its use is feasible despite the nonconformance.
  • Consider Mitigation Measures: Explore possible mitigation measures to address the nonconformance and minimize associated risks.

4. Decision Making:

  • Authorize Release: If it is determined that the nonconforming product can be released under concession without compromising safety or quality, the relevant authority authorizes its release.
  • Document Decision: Document the decision to release the product under concession, including the rationale behind the decision and any conditions or restrictions imposed.

5. Communication and Approval:

  • Internal Communication: Communicate the decision to relevant stakeholders, including production personnel, quality assurance team, and any other parties involved in the release process.
  • Customer Approval (if required): If customer approval is required per contract or agreement, seek consent from the customer before proceeding with the release.

6. Record Keeping:

  • Document Authorization: Maintain records of the authorization decision, including the NCR, evaluation findings, approval documentation, and any conditions or restrictions imposed.
  • Traceability: Ensure that all documentation provides a clear audit trail, allowing for traceability and accountability.

7. Monitoring and Review:

  • Monitor Performance: Regularly monitor the performance of released products to ensure they meet specified conditions and do not pose risks to safety or quality.
  • Periodic Review: Conduct periodic reviews of the concession process to identify areas for improvement and ensure compliance with organizational policies and standards.

Example Scenario:

Suppose a Quality Assurance Manager (QA Manager) identifies a nonconformance in a valve assembly during routine inspection. After assessing the nonconformance’s impact and feasibility of release, the QA Manager presents their findings to the Engineering Manager for evaluation. Upon reviewing the assessment and determining that the nonconformance poses no safety risks and can be released under restricted use, the Engineering Manager authorizes its release under concession. This decision is documented and communicated to relevant stakeholders, and the released products are monitored during installation to ensure compliance with specified conditions.

The non conforming product can be released under concession when products continue to satisfy the applicable Design Acceptable Criteria and customer criteria

Allowing the release of nonconforming products under concession, provided they still meet applicable Design Acceptable Criteria and customer criteria, is often a pragmatic decision made to balance various factors, including operational efficiency, customer satisfaction, and risk management. Here’s why organizations may choose to take this approach:

  1. Operational Continuity: Releasing nonconforming products under concession allows organizations to maintain production schedules and meet customer demand without significant disruptions.
  2. Minimized Waste: Rather than scrapping or reworking nonconforming products, releasing them under concession can minimize waste and reduce associated costs.
  3. Customer Flexibility: In some cases, customers may be willing to accept nonconforming products under certain conditions, especially if they still meet their functional requirements.
  4. Risk Assessment: Organizations conduct thorough assessments to ensure that the nonconforming products pose minimal risk to safety, performance, or regulatory compliance.
  5. Regulatory Compliance: If the nonconforming products still comply with applicable regulations and standards, releasing them under concession may be permissible.
  6. Customer Relationships: Preserving customer relationships by fulfilling orders or commitments, even with nonconforming products, can be crucial for long-term partnerships.
  7. Cost Considerations: The cost of rework, scrap, or customer dissatisfaction may outweigh the risks associated with releasing nonconforming products under concession.
  8. Continuous Improvement: Organizations may use incidents of nonconforming product release as opportunities for learning and process improvement to prevent similar occurrences in the future.

However, it’s important to note that releasing nonconforming products under concession should be a controlled and well-documented process, with appropriate risk mitigation measures in place to ensure that safety, quality, and customer satisfaction are not compromised. The decision to release nonconforming products under concession should always be made transparently and with full consideration of potential consequences. Releasing nonconforming products under concession involves a thorough evaluation to ensure they still meet applicable criteria, including Design Acceptable Criteria and customer requirements. This evaluation typically involves the following steps:

  1. Review of Design Acceptable Criteria:
    • Assessment of Design Requirements: Evaluate whether the nonconforming product still meets the original design specifications and requirements.
    • Review of Tolerances and Specifications: Assess if the nonconformance falls within acceptable tolerances and specifications outlined in the design criteria.
  2. Verification Against Customer Criteria:
    • Customer Requirements: Verify that the nonconforming product continues to meet the specific requirements outlined by the customer.
    • Contractual Obligations: Ensure compliance with any contractual agreements or specifications provided by the customer.
  3. Impact Assessment:
    • Functional Assessment: Determine if the nonconformance affects the product’s intended function or performance.
    • Risk Evaluation: Assess any potential risks associated with releasing the nonconforming product, considering factors such as safety, reliability, and regulatory compliance.
  4. Mitigation Measures:
    • Implementation of Controls: Implement appropriate controls or mitigation measures to address the nonconformance and minimize associated risks.
    • Compensatory Actions: Identify any compensatory actions or additional measures required to ensure product integrity and customer satisfaction.
  5. Documentation and Authorization:
    • Documented Evaluation: Document the evaluation process, including findings related to the nonconformance’s impact on design and customer criteria.
    • Authorization for Release: Obtain authorization from the relevant authority, such as quality assurance or engineering management, to release the product under concession.
  6. Customer Communication:
    • Transparent Communication: Communicate with the customer regarding the identified nonconformance, proposed concession, and any associated risks or limitations.
    • Obtain Consent: Seek customer consent or approval before proceeding with the release under concession, particularly if contractual obligations require customer involvement.
  7. Continuous Monitoring:
    • Ongoing Monitoring: Continuously monitor the released products to ensure they continue to satisfy applicable criteria and perform as intended.
    • Feedback Mechanisms: Establish feedback mechanisms to promptly address any issues or concerns identified during product use.

By following these steps and ensuring that nonconforming products released under concession still meet applicable design and customer criteria, organizations can mitigate risks and uphold quality standards while addressing nonconformities in their products.

The non conforming product can be released under concession when the violated Manufacturing Acceptable Criteria is determined as unnecessary to satisfy the applicable Design Acceptable Criteria and/or customer criteria

Organizations may be allowed to release nonconforming products when the violated Manufacturing Acceptable Criteria (MAC) is deemed unnecessary to satisfy the applicable Design Acceptable Criteria and/or customer criteria for several reasons:

  1. Risk Assessment: The organization conducts a thorough risk assessment to determine the impact of the violated MAC on product functionality, safety, and compliance with customer requirements. If the risk is deemed acceptable and does not compromise the overall integrity of the product, releasing the nonconforming product may be considered.
  2. Engineering Judgment: Engineering or technical experts assess the relationship between the violated MAC and the product’s design and functionality. If they determine that the nonconformance does not affect the product’s ability to meet its intended purpose or performance requirements, releasing it may be justified.
  3. Customer Agreement: In some cases, customers may explicitly agree to accept products with certain nonconformities, especially if they do not significantly impact the product’s usability or performance.
  4. Cost-Benefit Analysis: Releasing nonconforming products may be a more cost-effective option compared to scrapping or reworking them, especially if the cost of addressing the nonconformity outweighs the potential benefits.
  5. Regulatory Compliance: If the violated MAC does not affect the product’s compliance with relevant regulations and standards, releasing the nonconforming product may be permissible.

To ensure that the release of nonconforming products under these circumstances is appropriate and controlled, organizations typically follow a structured process, which may include:

  • Risk Assessment: Evaluate the impact of the violated MAC on product performance, safety, and compliance.
  • Technical Evaluation: Engage technical experts to assess the relationship between the nonconformance and product requirements.
  • Customer Communication: Communicate transparently with customers regarding the identified nonconformities and obtain their agreement if necessary.
  • Documentation: Document the decision-making process, including the rationale behind releasing the nonconforming product and any associated risks or mitigations.
  • Quality Controls: Implement additional quality controls or monitoring mechanisms to ensure that released products continue to meet customer requirements and regulatory standards.

By following such a process, organizations can make informed decisions about releasing nonconforming products when the violated MAC is determined to be unnecessary to satisfy design and customer criteria, while also managing associated risks effectively.

The non conforming product can be released under concession when the Design Acceptable Criteria is changed and the affected products satisfy the revised Design Acceptable Criteria and associated Manufacturing Acceptable Criteria requirements.

Organizations may be allowed to release nonconforming products when the Design Acceptable Criteria (DAC) is changed, and the affected products satisfy the revised DAC and associated Manufacturing Acceptable Criteria (MAC) requirements for several reasons:

  1. Continuous Improvement: Changes to the DAC often reflect efforts to improve product design, functionality, or performance based on updated engineering practices, technological advancements, or lessons learned from previous iterations. Releasing nonconforming products that meet the revised DAC allows organizations to implement these improvements and enhance product quality.
  2. Compliance with Updated Standards: DAC changes may be driven by updates to industry standards, regulations, or customer requirements. Releasing nonconforming products that comply with the revised DAC ensures alignment with current standards and regulatory obligations.
  3. Risk Assessment: Organizations conduct thorough risk assessments to evaluate the impact of nonconforming products against the revised DAC. If the nonconformance poses minimal risk to product safety, functionality, or customer satisfaction, releasing the products under concession may be deemed acceptable.
  4. Customer Authorization (if applicable): If the original DAC was established in agreement with the customer, any changes to the DAC require customer authorization. Releasing nonconforming products under concession ensures that the revised DAC meets customer expectations and aligns with their evolving needs.
  5. Cost Considerations: Scraping or reworking nonconforming products can be costly and resource-intensive. Releasing them under concession, provided they meet the revised DAC, may be a more cost-effective solution while still maintaining product quality and compliance.
  6. Operational Efficiency: Releasing nonconforming products that meet the revised DAC allows organizations to maintain production schedules, fulfill customer orders, and minimize disruptions to supply chains or project timelines.

To ensure that the release of nonconforming products under these circumstances is appropriate and controlled, organizations typically follow a structured process that includes:

  • Thorough evaluation of nonconforming products against the revised DAC and associated MAC requirements.
  • Technical review by subject matter experts to assess product compliance and evaluate any associated risks.
  • Documentation of the decision-making process, including rationale for releasing the products under concession and any customer authorizations obtained.
  • Implementation of additional quality controls or monitoring mechanisms to ensure ongoing compliance with the revised DAC.

By following these steps and ensuring alignment with the revised DAC and associated requirements, organizations can responsibly release nonconforming products when DAC changes occur, while still upholding product quality, regulatory compliance, and customer satisfaction.

When the Design Acceptable Criteria was previously agreed with customer, the Design Acceptable Criteria change shall be authorized by the customer.
when the Design Acceptable Criteria (DAC) was previously agreed upon with the customer, any changes to the DAC must be authorized by the customer. This ensures that the product design aligns with the customer’s expectations and requirements. Here’s why this authorization is necessary and how it can be obtained:

  1. Customer Agreement: When the DAC is established in agreement with the customer, it reflects the specific design characteristics, features, and performance requirements that the customer expects from the product. Any changes to these criteria can potentially impact the product’s functionality, usability, or suitability for its intended purpose.
  2. Maintaining Customer Satisfaction: Obtaining authorization from the customer ensures that they are aware of and agree to the proposed changes in the DAC. This helps maintain transparency and trust between the organization and the customer, enhancing overall customer satisfaction and loyalty.
  3. Compliance with Contractual Obligations: Many customer agreements or contracts include provisions regarding changes to product specifications, including the DAC. Adhering to these contractual obligations is essential for maintaining a positive relationship with the customer and avoiding disputes or legal issues.
  4. Risk Management: Customer authorization provides an opportunity for the customer to assess the potential impact of the DAC changes on their needs, requirements, and intended use of the product. This allows them to identify any risks or concerns associated with the proposed changes and provide input or feedback as necessary.

To obtain customer authorization for DAC changes, organizations typically follow these steps:

  • Notification: The organization notifies the customer of the proposed changes to the DAC, including details of the revisions and the rationale behind the proposed modifications. This notification may be communicated through written correspondence, meetings, or other forms of communication as per the contractual agreement.
  • Review and Approval: The customer reviews the proposed DAC changes and assesses their impact on product performance, functionality, and suitability for their intended use. If the customer agrees to the proposed changes, they provide formal approval or authorization for the revisions.
  • Documentation: The organization documents the customer’s authorization for the DAC changes, including any correspondence, agreements, or approvals obtained from the customer. This documentation serves as evidence of the customer’s consent to the proposed modifications.

By obtaining customer authorization for DAC changes, organizations can ensure that any modifications to the product design align with the customer’s expectations and requirements, ultimately contributing to enhanced customer satisfaction and positive business relationships.

The organization shall not release product not conforming to DAC or contract requirements without customer authorization.

The organization must not release any product that does not conform to the Design Acceptable Criteria (DAC) or contract requirements without obtaining explicit authorization from the customer. This requirement is crucial for maintaining product quality, meeting customer expectations, and upholding contractual agreements. Here’s why this restriction is essential and how it can be enforced:

  1. Customer Confidence: Releasing nonconforming products without customer authorization can erode customer confidence and trust in the organization’s ability to deliver products that meet their requirements. Customers rely on organizations to adhere to agreed-upon specifications and standards, and any deviation from these expectations can result in dissatisfaction and potential loss of business.
  2. Risk Mitigation: Nonconforming products pose risks to both the customer and the organization. They may fail to perform as intended, leading to safety concerns, operational issues, or product failures. By obtaining customer authorization, organizations can ensure that customers are aware of any deviations from the agreed-upon specifications and can assess the associated risks before accepting the products.
  3. Contractual Obligations: Contractual agreements often stipulate specific requirements regarding product quality, specifications, and conformity to standards. Releasing nonconforming products without customer authorization may constitute a breach of contract, leading to legal ramifications, financial penalties, or damage to the organization’s reputation.
  4. Transparency and Accountability: Obtaining customer authorization for nonconforming products promotes transparency and accountability in the organization’s processes. It demonstrates a commitment to open communication and collaboration with customers, allowing them to participate in decision-making regarding product quality and compliance.

To enforce this requirement effectively, organizations typically implement the following measures:

  • Strict Controls: Establish robust controls and procedures to prevent the release of nonconforming products without customer authorization. This may include thorough inspection, testing, and verification processes to ensure that all products meet the specified requirements before being released to the customer.
  • Authorization Process: Implement a formal authorization process that involves obtaining explicit approval from the customer before releasing any nonconforming products. This process may include documenting the customer’s consent, rationale for the release, and any associated risks or mitigating actions.
  • Communication Channels: Maintain open communication channels with customers to facilitate the authorization process. Clearly communicate any deviations from the DAC or contract requirements, along with the proposed corrective actions or concessions, to ensure that customers are fully informed and can make informed decisions.
  • Documentation and Record-Keeping: Document all instances of nonconforming products, including details of the deviation, actions taken, and customer authorization obtained. Maintain comprehensive records to demonstrate compliance with contractual requirements and regulatory standards.

By adhering to these measures and ensuring that nonconforming products are not released without customer authorization, organizations can uphold product quality, mitigate risks, and maintain positive relationships with customers.

an example of a record documenting the release of nonconforming product under concession:

Record IDDate ReleasedProduct IDDescription of NonconformityReason for ReleaseCustomer AuthorizationComments
NC-0012024-06-30PRD-123Dimensional deviationMinor deviation from specifications. Concession granted due to minimal impact on functionality.Customer approval obtained via email on 2024-06-28.Product reinspection conducted post-concession. No further nonconformities identified.

In this example:

  • Record ID: Unique identifier for the record.
  • Date Released: Date when the nonconforming product was released under concession.
  • Product ID: Identification code or number for the nonconforming product.
  • Description of Nonconformity: Brief description of the identified nonconformity or deviation from specifications.
  • Reason for Release: Explanation of why the nonconforming product was released under concession, including the rationale for granting the concession.
  • Customer Authorization: Details of the authorization obtained from the customer, including the method of authorization (e.g., email, written approval) and the date of authorization.
  • Comments: Additional comments or notes related to the release of the nonconforming product, such as post-concession actions taken or follow-up inspections conducted.

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