Third Party Inspection
Third Party Inspection refers to independent inspection services that are provided by inspection agencies. In purchasing and procurement projects the sellers and vendors are first parties. The second parties are purchasers or buyers.
First party inspection refers to quality control activities that are done by equipment vendors or sellers.
Second party inspection refers to inspection activities that are done by equipment buyers or purchasers.
In fact first party is seller and second party is buyer. So when you say second party inspection, it means that an inspection and quality control activities that are done by a buyer and when you say first party inspection, it means that an inspection and quality check that are done by a vendor in its construction shop.
These quality controls and inspections are done based on Proforma Invoice, Purchase Order and International standards.
The Third Party Inspection refers to independent inspection activities that are done by a Third Party Inspection either hired by a buyer or seller.
A third-party inspection company is a business organization complying with the ISO 17010 standard. Inspection and quality control are the most important tools in today’s corporate world.
Third-party inspection or “Category A” is the most stringent of the 3 categories of inspection organization that the standard specifies. Such organizations are third party inspection agencies that must not be involved in any activities other than inspection and testing. Based on this requirement the third party inspection agency must not be involved in design, procurement, fabrication, construction and installation.
All companies and parties such as buyers, sellers, engineering companies, plant owners must have access to these agencies and use their services. The confidentiality, independence, impartiality and integrity are important conditions for being a Third Party Inspection Company.
The ISO 1720: – Requirements for the operation of various types of bodies performing inspection- specifies characteristic of these kinds of inspection agencies.
Based on these requirements, these agencies must be impartial and independent in their inspection activities and in their inspection reports and results.
All interested companies such as traders, buyers, sellers, engineering companies, construction companies must have access to the services of these inspection agencies.
The impartial and independence conditions are very important factors for third party Inspection agencies. In this direction ISO 17020 does not allow these companies to be participated or involved in any procurement, purchasing, construction, installation and even design activities.
They must only provide Third Party Inspection and not anything else.
Based definition of the ISO 17020, these inspection companies are category A inspection organization. Based on this standard there are two more inspection organizations that are not independent.
A category B inspection organization is an inspection department in a large-scale company that is involved in the design, procurement, construction, installation, etc. and this inspection department provides inspection services to its own company.
Normally a category B inspection organization is a quality control department in an engineering or EPC company.
This department assists company in procurement and purchasing projects and makes inspections on the equipment and materials that are purchased by own company.
Suggest an EPC company has a contract with an oil company for design, procurement, and construction of a desalting plant.
Then the quality control department of this EPC Company makes inspection on the equipment and material that have been ordered by EPC contractor for this desalting plant.
So this is what we name second party inspection and based the ISO 17020 is category B type inspection.
This inspection will not be enough by end-user or in this example oil company.
The oil company will hire an independent inspection agency or in other word a category A inspection company to conduct inspection on the procured equipment and material by EPC company.
Sometimes the end-user or “oil company in this example” ignores to hire an independent inspection company by itself but mandates that the EPC Company to hire an independent inspection agency that is in their approved list.
Different projects have different procedures for handling inspection activities in their procurement projects.
Sometimes the procured equipment is inspected by both parties i.e. by EPC contractor quality control as well as by end-user third party inspection agency. In other word equipment are inspected by category A and category B inspection organizations.
Based on ISO 17020 definition, there is also category C inspection organizations. These inspection organizations are not too much. It refer to an inspection department of engineering company that provide services to its own procurement and purchasing projects as well as to other engineering companies.
Similar to the category B inspection organizations these companies also cannot be independent.
There are lots of scopes of work for Category A inspection agencies or in other word in third party inspection companies. One of them is Third Party Inspection that refers to quality part of work.
In this part an inspection agency checks and makes sure that the quality of the commodity is as the same of purchase order specification.
The scope of work is determined by buyers and purchasers. Some of them require only a pre-shipment inspection and some other may mandate more stringent scope and ask their third party inspection agency to witness important tests and inspections such as material certificate review, material identification, welding inspection, NDE test review, dimensional control, hydro-static testing, mechanical running testing, performance testing, painting inspection, packing and marking inspection and loading inspection.
The scope of work for inspection and testing is defined through inspection and test plan (ITP). This is very important document in purchasing and procurement projects. This document identifies duty and task of each parties regarding inspection during manufacturing and construction process.
In giant project it is necessary that an inspection company or a category A inspection organization toThird Party Inspection. It is duty of inspection agency to check that to see if all inspections and tests are done with satisfactory results before issuing of inspection release notes.
But in no case an inspection agency must expedite procurement work such as reporting to client about percentage of manufacturing progress or etc. These are not task of inspection agency; this must be done by EPC contractor expeditor engineer or technician.
This checking must be done based approved inspection and test plan. The inspection agency can use the ITP as check list to see if all inspection completed and their inspection visit reports are available.
It is best practice that an inspection releases note to be referred to the purchase order number as well as to the inspection and test plan document number. The quantity also must be stated in release note if the commodity is going to be shipped partially.
It is responsibility of the category A inspection organization or inspection agency to issue an inspection visit report after each visit in manufacturer shop. The inspection date must be notified to inspection agency normally 7 working days in advance.
It is responsibility of the vendor to notify the inspector agency. The quality control team of a manufacturer must check inspection and test plan frequently and when they see they have reached to specific stage of construction that need an inspection, then must notify inspector for its visit.
The communication channel between inspection agency, vendor and client must be set-up.
This normally is done in Pre-Inspection meeting or Pre-Production meeting. In this meeting that is conducted before commencement of project, all parties will be attended in the meeting and discuss about project coordination and communication.
All parties are responsible to act and communicate based what is agreed and confirmed in the meeting and Minute of Meeting (MOM) will be based for coming actions.
Raw material inspection must be done based purchase order specification. The Third Party Inspection is another important task of inspection agencies. They check material conformity based on BSEN 10204 requirements for 3.1 and 3.2 certifications.
A 3.1 material certificate refers to the certificate that is issued by a material manufacturer but a 3.2 certificate is material certificate that is issued by material manufacturer but confirmed and approved by independent inspection agency. It is necessary that inspection agency to witness important test during of manufacturing process for confirming such certificates.
TYPES OF QUALITY INSPECTION
- A pre-production inspection tells the buyer which kind of raw materials (or components) will be used. Factories are often suspected of lowering their costs by purchasing substandard materials, and this can be disastrous for the buyer (e.g. the wrong kind of chip in an electronic device).
- A during production inspection (often called “DUPRO” in the industry) allows the buyer to have an idea of average product quality, early in the production cycle. It is the most useful and the most under-rated tool at the disposal of importers, who often only rely on final inspections.
- The final random inspection (also called “pre-shipment inspection”) is by far the most common type of QC check. It takes place once 100% of shipment quantity is finished and at least 80% is packed, so it can be a real random inspection (this is not exactly the case if quality is checked earlier) and suppliers cannot play games.
- The container loading inspection, like the pre-production inspection, it is seldom used. But it can be a worthwhile option in some specific cases.
Third-party inspection is not a “cure-all” solution or a “silver bullet” as some importers might be mistakenly led to believe. But if used correctly, it can be a powerful tool for shedding light on the status and quality of the goods you’re importing abroad.