QP1CBD-22June2005.doc

Proposal for Implementing Painting Contractor Certification Program

The United States Coast Guard, Maintenance and Logistics Command Atlantic (MLCA), Naval Engineering Division is responsible for insuring high quality repairs and overhauls of cutters and boats. To that end this office has instituted a quality assurance (QA) program, which will require surface preparation and painting Contractors to implement and maintain a Painting Contractor Certification Program (PCCP) in order to engage in preservation of ship surfaces that are identified as “critical-coated surfaces”. Information pertinent to the impact of the QA PCCP program on solicitation awards may be requested from the point of contact:

Vanessa A. Nemara

Maintenance and Logistics Command, Atlantic 300 E. Main Street, Suite (600) Norfolk, VA 23510-9102

Phone: (757) 628-4634

FAX: (757) 628-4676

Background.

Historically, the MLCA has been plagued with pre-mature coating failures on surfaces deemed “critical-coated” surfaces i.e. bilges, u/w body surfaces, potable water tanks, and flight deck surfaces. Such coating failures typically lead to a loss of cutter operational days and increased contract costs. When analyzing these pre-mature coating failures, in most cases, the root-cause is often attributed to a lack of quality control (QC) during surface preparation or coating application.

What we have done and are doing to remedy the problem.

Over the past 5 years, MLCA has been requiring Contractors to, at a minimum, hire coating inspectors who have completed the “Level I” Session of the NACE-International (NACE) Coating Inspector Program (CIP), to oversee all aspects of critical coating applications. We've also included a variety of in-process QC requirements in coating specifications. Unfortunately, these efforts have been largely unsuccessful, due in part to the lack of in-the-field experience of some “Level I” inspectors, and Contractor use of technical/sales representatives provided free of charge by coating manufacturers - a practice now prohibited in our specifications due to potential conflict of interest. MLCA specifications currently require the use of inspectors who have successfully completed not only “Level I” Session, but also the “Level II” and “Peer Review” Sessions of the NACE CIP, and have received certification as NACE Coating Inspectors. In addition, the coating inspectors must not be employees of either the Contractor or any of the coating system manufacturers. Additional information regarding the CIP may be obtained at the following URL address: http://www.nace.org/ What we are doing as the next step.

As is currently required by NAVSEA and various other major facility owners, the next step is to require Contractor certification. In our view, the PCCP developed and managed by the Society for Protective Coatings (SSPC), is the appropriate certifying medium. The SSPC programs are based on consensus standards developed by a diverse committee of industry professionals and are nationally recognized independent Contractor evaluation programs. The certification program “QP-1” at a minimum involves reviewing the painting Contractors’ primary ability to provide quality work (surface preparation and protective coating application) and assesses Contractor conformance with applicable safety, health and environmental compliance standards.

Certification particulars.

The QP1 certification process normally takes less than six months at an initial cost of approximately $4,800; annual renewal is required at a gradually diminishing cost, down to approximately $3,300. Consequences for certified Contractors who violate established safety, quality, environmental, and or ethical practice standards of performance include (but are not limited to) the following: warnings, probationary periods, suspensions or revocation of certification by the SSPC.

Enforcing the PCCP requirements.

The MLCA recognizes the importance of maintaining a broad Contractor base. In fact, as part of the PCCP implementation, we are actively engaging Contractors by providing advance notification of intent to use the QP-1 program as a qualifying factor. All prospective bidders for preservation work for the aforementioned critical-coated surfaces will be required to submit SSPC QP1 certification with their pricing, in order to be evaluated prior to award. The notice reads as follows:

”Notice To Contractors: This is to advise all concerned parties that all U.S. Coast Guard Maintenance and Logistics Command Atlantic (MLCA) commercial availability projects advertised on or after 01 October 2005, will require that any Contractors engaged in surface preparation and coating application of “critical-coated surfaces”, as defined in MLCA Standard Specification 0000_STD (General requirements), be certified by SSPC to the requirements of SSPC-QP 1, prior to contract award. The MLCA retains the option of including these requirements in any projects advertised prior to the listed date above. Information on the SSPC certification programs can be found at www.sspc.org”.

In lieu of meeting the QP1 certification, Contractors may opt to use “Peer Review” NACE Coating Inspectors, but as this is known to significantly more costly to the Contractor than QP1 certification, we highly encourage Contractors to seek SSPC QP1 certification in order to remain competitive. The MLCA Vessel Procurement and Logistics (vpl) branch will enforce the PCCP requirements in a manner that is legally fair and equitable. Rules for certification and re-certification have been established by SSPC to provide a reasonable amount of time for all parties to perform the required tasks; however, SSPC can provide temporary extensions where "good-faith" efforts have not succeeded in fulfilling all requirements. The policy of enforcement of the basic PCCP requirement, initially, and for fostering continuous certification will be as follows:

· Contractors will be allowed to work during their certification period only.

· Upon expiration of the certification, work will be stopped and will resume only upon presentation of a valid certification, or written certification extension, from SSPC.

· No grace period will be allowed and liquidated damages will not be waived for non-performance due to expired certification.

Placing Requirement for PCCP in Project Specification.

At the time of implementation, the “General Requirements” item will be amended with verbiages that convey the intent of PCCP implementation; they will read as follows:

“All Contractors and subcontractors who perform surface preparation and coating application on “critical-coated surfaces”, as defined in MLCA Standard Specification 0000_STD (General requirements), shall be certified by the Society for Protective Coatings (SSPC) to the requirements of SSPC QP 1 prior to contract award, and shall remain certified while accomplishing any surface preparation or coating application. The painting Contractors and painting subcontractors must remain so certified for the duration of the project. If a Contractor or subcontractor's certification expires, the Contractor will not be allowed to perform any work until the certification has been reissued. Requests for extension of time for any delay to the completion of the project due to an inactive certification will not be considered and liquidated damages may apply. Notify the KO of any change in Contractor certification status”.

Conclusion.

The SSPC certification programs will offer the MLCA the advantage of employing industrial painting Contractors with the experience; knowledge and equipment to produce high quality work in accordance with local, state and federal guidelines for safety, health and environmental compliance.