1. LESSON 5 Government Contract Quality Assurance Surveillance Planning
15November2013
Lesson 4: Safety Stock

2. Lesson Introduction
Given a contract with Quality Assurance (QA) oversight responsibilities, you will be able to develop a Government Contract Quality Assurance (GCQA) surveillance plan.

3. Lesson Objectives
Upon completion of this lesson, you should be able to:
Identify specialized GCQA surveillance planning requirements.
Articulate the relationship between the Risk Impact and GCQA scope.
Describe considerations, methods, and factors that must be determined when developing a surveillance plan.
Document a surveillance plan using Risk Profile and Plan Tool.
Track the surveillance planning process for a sample situation.
Describe how to execute and revise a surveillance plan.
Lesson 4: Safety Stock

4. Lesson Topics This lesson covers the following topics:
Specialized GCQA Requirements
The Relationship Between CTR, Risk Assessment, and GCQA Surveillance Planning
Developing a Surveillance Plan
Documenting a Surveillance Plan
Surveillance Plan Example
Executing and Revising a Surveillance Plan

5. Significance of Quality
Cost of Quality

6. WIIFM? This lesson is important because:
Proper surveillance planning and execution is essential to ensuring contract compliance.
It can literally be a matter of life and death.
Surveillance planning is critical to ensuring Defense Contract Management Agency (DCMA) focus is effective in mitigating risk likelihood.
A well-developed surveillance plan is the output from Contract Technical Review (CTR) and risk assessment.

7. Balance of Risk Likelihood Frequency and Intensity Decrease
Overview
Analyzing risk information enables the Quality Assurance Specialist (QAS) to:
Determine which surveillance methods to employ.
Define frequency and intensity of surveillance.
Balance of Risk Likelihood
Frequency and Intensity Decrease
Frequency and Intensity Increase

8. Policy and Authority Policy Authority
Federal Acquisition Regulation (FAR)
DCMA GCQA Surveillance Policy
Authority
FAR through -9
FAR

9. Definition
GCQA surveillance plan - The documented methods and techniques to reduce the likelihood of risk causes and to provide a basis of confidence that the supplies meet the quality and technical requirements of the contract.

10. SPECIALIZED GCQA REQUIREMENTS
Lesson Topics:
Specialized GCQA Requirements
The Relationship Between CTR,
Risk Assessment, and GCQA
Surveillance Planning
Developing a Surveillance Plan
Documenting a Surveillance Plan
Surveillance Plan Example
Executing and Revising a Surveillance Plan

11. Topic 1: Specialized GCQA Requirements
GCQA exclusions include:
Safety of Flight (SOF)
Naval Special Emphasis Program (NSEP)
National Aeronautics and Space Administration (NASA)
Host Nation Contract Administration Services (CAS)

12. Specialized Requirements: SOF
Safety of Flight (SOF)
SOF QA surveillance plan is “above and beyond” separate surveillance plan dealing with SOF characteristics.
SOF is a DCMA-imposed program with specific surveillance requirements.
SOF QA requirements do not preclude standard GCQA requirements.

13. Specialized Requirements: NSEP
Naval Special Emphasis Program (NSEP)
NSEP planning is covered in the DCMA NSEP Quality Assurance Representative Instruction (QARI).
NSEPs include Naval Nuclear Propulsion Program (NNPP), Nuclear Plant Material (NPM), Level 1 /SUBSAFE (L1/SS) Program, Navy Propulsion Program (NPP), Deep Submergence System/Scope of Certification (DSS-SOC) Program, and Fly By Wire Ships Control Systems (FBWSCS).
NPP QA Memorandum of Agreement (MOA) defines DCMA’s customer compliance and Program Management requirements for NSEPs.

14. Specialized Requirements: NASA
National Aeronautics and Space Administration (NASA)
Surveillance plan requirements must address all requirements specified in:
NASA’s Letter of Delegation (LOD) (NASA Form 1430)
NASA Program Requirements (NPR) A
If “insight” is delegated, the QAS must develop and document insight strategy.

15. Specialized Requirements: Host Nation CAS
Host Nation Contract Administration Service (CAS)
DFARS (1)(ii): DCMA follows Standardization Agreement (STANAG) when performing or delegating QA services for/to North Atlantic Treaty Organization (NATO) Host Nation.
DFARS (2): DCMA performs or delegates QA services for non-NATO international military sales contracts.

16. Question and Answer
Which programs have specialized GCQA surveillance planning requirements?
Body of Armor
Ammunition
Safety of Flight
All of the above

17. The Relationship Between CTR, Risk Assessment, and GCQA Surveillance Planning
Lesson Topics:
Specialized GCQA Requirements
The Relationship Between CTR,
Risk Assessment, and GCQA
Surveillance Planning
Developing a Surveillance Plan
Documenting a Surveillance Plan
Surveillance Plan Example
Executing and Revising a Surveillance Plan

18. Contract Technical Review GCQA Surveillance Planning
Topic 2: The Relationship Between CTR, Risk Assessment, and GCQA Surveillance Planning
GCQA concept
System/Process integration
GCQA process-based system
DCMA strategy
Contract Technical Review
Risk assessment concept
Contract Technical Review
Risk Assessment
GCQA Surveillance Planning

19. Contract Technical Review GCQA Surveillance Planning
GCQA Concept
GCQA is a process-based approach for Government determination of product or service acceptability based upon confidence in the supplier’s Quality Management System (QMS) or inspection system developed through a risk-based systematic verification of significant objective evidence.
Contract Technical Review
Risk Assessment
GCQA Surveillance Planning

20. System/Process Integration
FAR/ DFARS
Agency Policy/Process Instructions
Records/Results/Evidence
Mandated by DoD
Issued via Headquarters (HQ) instructions
Captured by QAS

21. GCQA Process-Based System
Direct GCQA and Support Processes
GCQA Program
ALRE CSI
CTR
CAR
CSI
Cust. Compl (PQDR)
DC&A
Del Surv
FAT
FLS Rev
GCQA Surv Plan
NCM
PAOC
Proc Review
Prod Accept /Rel
Prod Exam
QA Dev
QAE Hdbk
QA Stamps
QA Sys Audit
Risk Assess
SOF
Std Insp
Intl Agree

22. DCMA Strategy Contract Technical Review (CTR) Risk Assessment
GCQA Surveillance Planning
Perform
Surveillance
Product Release
SOW
Tech. Item
System Req.
Schedule/Cost
Exhibits
Data Pkg.
Impact
Performance
Causes
Likelihood
QA Surveillance Methods
System Audit
Process Review
Product Exams
Data Collection and Analysis (DC&A) is part of the Plan, Do, Check, Act (PDCA) cycle.
DC&A
Records

23. Process-Based Approach
Perform and document Contract Technical Review (CTR)
Perform and document Risk Assessment
Plan GCQA Surveillance Plan
Document GCQA Surveillance Plan
Perform GCQA surveillance
Document results of GCQA surveillance (records)
Adjust GCQA Surveillance Plan based on data analysis 1 2 3 4 5 6 7
OUTCOME = Accept product on behalf of Government

24. Contract Technical Review
Multiple contractual quality and technical requirements
Scattered contractual requirements
Consolidated, concise listing of specific contract requirements
Begin focused planning approach
CTR:
Identifies the nature and extent of the customer’s requirements associated with procurements.
Includes a complete review of Technical Data Package (TDP), Quality Letters of Instruction (QALIs), LODs, and any other associated documentation.

25. QA Risk Assessment Concept
Impact Assessment
Risk Statement
Potential Cause Assessment
Likelihood Assessment

26. Question and Answer
Which two statements accurately describe DCMA’s GCQA approach? (Select two.)
GCQA relies on a risk-based systematic verification method.
GCQA relies on a risk-based random selection verification methodology.
Determination of acceptability is based on confidence in the supplier’s ability to address CARs.
Determination of acceptability is based on confidence in the supplier’s QMS or inspection system.

27. Developing a Surveillance Plan
Lesson Topics:
Specialized GCQA Requirements
The Relationship Between CTR,
Risk Assessment, and GCQA
Surveillance Planning
Developing a Surveillance Plan
Documenting a Surveillance Plan
Surveillance Plan Example
Executing and Revising a Surveillance Plan

28. Topic 3: Developing a Surveillance Plan
Types of surveillance plans
Surveillance methods
Surveillance factors

29. When is a Surveillance Plan Required?
Instrument
Surveillance plan required?
Contract
Yes
Customer QALI
External LOD
Maybe
Note: LOD may serve as surveillance plan.
DCMA Subcontract Delegations
DCMA Subcontract Delegations of Specific Tasks Only
Note: Delegation may serve as surveillance plan.

30. Types of Surveillance Plans
Surveillance plan is contingent upon a risk profile.
Risk profile, along with associated levels of risk, determine extent of planning.
Three types of surveillance plans:
Facility-wide basis (covers all contracts associated with a particular facility)
Based on a specific program, product, or product line
Contract-by-contract basis
Do not confuse the three types of surveillance plans with the three surveillance methods:
Product examination
Process reviews
System audits

31. Surveillance Methods: System Audit
Risk causes requiring system audit:
Quality Management System (QMS)
Specific QMS clause(s)
Document:
Which clauses and sub-clauses are to be audited (partial audit)
Schedules and/or frequency of planned audits
Time period for a full QMS audit cannot exceed three years.
If QMS process is identified as the risk cause, see Process Review Method.

32. Surveillance Methods: Process Review
Document the type:
Single event (full)
Incremental
Process reviews shall be scheduled at intervals of no greater than one year when:
Identified risk cause is a special process.
Process is associated with a High impact risk statement.
Frequencies must be semiannual (at a minimum) when:
Risk cause likelihood is Moderate or High.
Process review is the only surveillance method used.

33. Surveillance Methods: Product Examination
Risk causes requiring product examination:
Product characteristics
Product features
Product examination should be planned and performed as early in the product realization process as practicable.
The specific characteristics to be verified must be identified in the:
Surveillance plan
Inspection records
The surveillance plan must also define the intensity and frequency of planned product examinations.

34. Surveillance Methods: Product Examination (cont.)
The surveillance plan records must identify the product examination technique:
Inspect
Test
Witness
Verify
The QAS can verify multiple characteristics of the same product using product examinations with different:
Techniques
Frequencies
Intensities

35. Scope Intensity Frequency
Surveillance Factors
Scope
Intensity
Frequency
Customer-directed requirements
Contractual requirements
Confidence for product/service acceptance

36. Impact Influences Scope
Broader scope might require multiple methods.
Product examination (Critical and Major)
Process review (Full or Incremental)
System audit (QMS clauses)
Any combination
Narrow scope might not require multiple methods.
Low impact generally defaults to product examination or process review.
Higher
Risk Impact =
Broader Scope
Lower
Risk
Impact
= Narrow
Scope
The impact of the risk statement influences the scope of GCQA surveillance.

37. Likelihood Influences Frequency and Intensity
Increased intensity and frequency
High likelihood increases the frequency and intensity of the methods and techniques used.
– Intensity: “How much” surveillance to perform.
– Frequency: “How often” surveillance is performed.
Reduced intensity and frequency
Lower likelihood extends the frequencies and/or reduces intensity of methods and techniques used.
Higher
Risk Likelihood of Cause Occurring
Lower Risk Likelihood of Cause Occurring
Likelihood of risk cause drives the frequency and intensity of GCQA surveillance.

38. Question and Answer
Which type of Risk Profile and Plan is usually considered the most efficient for the QAS?
Program-based plan because it covers a variety of products/services
Product or product line-based plan because it is customized to a specific type of item.
Contract-based plan because it is specific to each contract a supplier is fulfilling.
Facility-wide based plan because it is a more cost effective GCQA strategy.

39. Question and Answer
If the likelihood of a risk cause occurring is high, the surveillance methods and techniques used _________________________.
Increase in frequency but decrease in intensity
Increase in both frequency and intensity
Decrease in frequency but increase in intensity
Decrease in both frequency and intensity

40. Documenting a Surveillance Plan
Lesson Topics:
Specialized GCQA Requirements
The Relationship Between CTR,
Risk Assessment, and GCQA
Surveillance Planning
Developing a Surveillance Plan
Documenting a Surveillance Plan
Surveillance Plan Example
Executing and Revising a Surveillance Plan

41. Topic 4: Documenting a Surveillance Plan
Use the Risk Profile and Plan Tool to document risk:
Information
Statement(s)
Cause(s)
Likelihood(s)

42. Documentation Benefits
Increased effectiveness
Proactive vs. Reactive
Provides a basis for (and can more easily make) adjustments
Improved efficiency
Everyone knows the plan:
QAS
CMO
Supplier
Backups, successors, and delegates
When necessary, share the plan with the customer to:
Report status
Solicit input
Garner confidence

43. Document Risk Profile and Plan
The planning tool contains a Risk Profile and Plan tab in which the QAS documents risk information.

44. Document Risk Profile and Plan (cont.)
In this section of the tool, the QAS documents:
The nature of the risk (Risk Statement and associated impact).
Risk Causes (and associated likelihood).

45. Risk Results Feed Surveillance
GCQA Methods
In this section of the tool, the QAS documents surveillance methods used to manage risks, including:
Planned and scheduled surveillance activities.
Location of surveillance records.

46. Surveillance Plan Example
Lesson Topics:
Specialized GCQA Requirements
The Relationship Between CTR,
Risk Assessment, and GCQA
Surveillance Planning
Developing a Surveillance Plan
Documenting a Surveillance Plan
Surveillance Plan Example
Executing and Revising a Surveillance Plan

47. Topic 5: Surveillance Plan Example
Vehicle armor example
Randy Wright (left), DCMA
Atlanta lead QAS, Space and Naval Warfare Systems Command, and Robert Rhett (right), lead QAS, SPAWAR, reviewing MRAP vehicle.

48. Surveillance Plan Example: Risk Results Feed Surveillance (1 of 2)
Risk Statement
Risk Impact
Supplier fails to control processes impacting ballistic capability.
High
Potential Risk Cause
Likelihood
Purchase order generation
Surveillance Methods
Method
Details
Frequency
System Audit
Partial QMS (entire purchasing system)
Annually
Process Review
Full review (purchase order generation)
Quarterly
Product Examination
Sampling of Purchase Orders (POs) Acceptable Quality Level (AQL) 1.0
Monthly

49. Surveillance Plan Example: Risk Results Feed Surveillance (2 of 2)
Risk Statement
Risk Impact
Supplier fails to control processes impacting ballistic capability.
High
Potential Risk Cause
Likelihood
Welding
Moderate
Surveillance Methods
Method
Details
Frequency
Delegated
Discussed options with delegatee.
Determined method: Full process review.
Initial 5 lots
Product Examination
Sample at AQL 1.0
Monthly

50. Surveillance Plan Example: Documentation (1 of 2)
GCQA Methods
Schedule & Interval
Note: QA records are filed in P:/Central/DCMA Huntsville/SHQ/SHQA/Quality Surveillance Records
Product examination on purchase orders issued each month. System audit is of the entire purchasing system.
Purchase Order Generation
Annual/Jan 11
Supplier fails to control processes impacting ballistic capability. X X
1.0
Monthly Lot
Full
Quarterly
Dec 10 X
Joe Welding Inc., Newark, NJ. Delegation eTool.
*Process review schedule determined by delegatee.
Welding X
Full
Initial 5 Lots *
YES

51. Surveillance Plan Example: Documentation (2 of 2)
GCQA Methods
Schedule & Interval
Note: QA records are filed in P:/Central/DCMA Huntsville/SHQ/SHQA/Quality Surveillance Records
Joe Welding Inc., Newark, NJ.
Delegation eTool.
*Process review schedule
Determined by delegatee.
Welding X
YES
Full
Initial 5 Lots *
Supplier fails to control processes impacting ballistic capability. X
Product Examination (Inspection Technique) performed at Receiving Inspection.
Welding X
1.0
Each Lot

52. Executing and Revising a Surveillance Plan
Lesson Topics:
Specialized GCQA Requirements
The Relationship Between CTR,
Risk Assessment, and GCQA
Surveillance Planning
Developing a Surveillance Plan
Documenting a Surveillance Plan
Surveillance Plan Example
Executing and Revising a Surveillance Plan

53. Topic 6: Executing and Revising a Surveillance Plan
Contract Technical Review (CTR)
Risk
Assessment
GCQA Surveillance Planning
Perform
Surveillance
Product Release
SOW
Tech. Item
System Req.
Schedule/Cost
Exhibits
Data Pkg.
Impact
Performance
Causes
Likelihood
QA Surveillance Methods
System Audit
Process Review
Product Exams
Data Collection and Analysis (DC&A) is part of the Plan, Do, Check, Act (PDCA) cycle.
Plan updates may be based on:
Single risk event
Results of DC&A
DC&A
Records

54. Data Collection and Analysis Plan
Surveillance plan must include a plan for DC&A
At a minimum, DC&A must address:
Data to be collected.
Intervals of collection.
Method of analysis.
Intervals of analysis.

55. Documenting DC&A
The Risk Profile and Plan Tool contains a DC&A tab in which the QAS can document a plan for data collection.

56. Summary (1 of 3)
Having completed this lesson, you should understand that:
Separate DCMA Policies cover the four programs requiring specialized GCQA surveillance planning requirements (SOF, NSEP, NASA, and Host Nation CAS).
GCQA surveillance planning is contingent upon a complete and accurate CTR and risk profile.
Lesson 4: Safety Stock

57. Summary (2 of 3)
Having completed this lesson, you should understand that:
Developing a surveillance plan requires you to define:
Plan type (facility-based, program/product-based, contract-based).
Surveillance methods (system audit, process review, product examination).
Surveillance factors (scope, intensity, frequency).
Lesson 4: Safety Stock

58. Summary (3 of 3)
Having completed this lesson, you should understand that:
Documenting a surveillance plan may be accomplished in the Risk Profile and Plan Tool.
Executing a properly developed DC&A plan improves risk assessment, surveillance, and supplier performance.
Lesson 4: Safety Stock

59. Questions

60. Job Aid: Surveillance Planning Flowchart
Students are provided with the GCQA Surveillance Planning Flowchart handout.
CMQ101_M4_L5_JA1_surv_plan_flowchart.pdf
This job aid assists students by stepping through the process of developing a surveillance plan.

61. Exercise: System/Process Integration
Students work individually to complete the System/Process Integration exercise.
Open the exercise file:
CMQ101_M4_L5_E1_process_integration.pdf.
Fill in the portions of the diagram with the listed element(s).
Time: 5 minutes

62. Exercise: Surveillance Planning
Students work in pairs to plan surveillance using the Risk Profile & Plan tab.
Open the saved Risk Profile and Plan Tool (xlsx) file from Exercise 7 in Module 3, Lesson 3.
Base surveillance decisions (methods, techniques, frequency, and intensity) on the information in the completed Risk Profile.
Time: 30 minutes

63. Case Study: Part 2 GCQA Surveillance Planning and Performance
Students work in pairs to resolve Case Study Situation(s).
Use the Case Study: Part 2 – GCQA Surveillance Planning and Performance document (CMQ101_M4_CaseStudy.pdf).
Class review/discussion upon completion.
Time: 30 minutes