The API Monogram Licensing Program Requirements, Part 4 - API Monogram License Agreement, Revision 2, Item #8 states: "If API's requirements are modified during the term of this Agreement, API shall determine the date by which the new requirements become effective and shall notify the Licensee of such date. Licensee agrees to comply with the modified requirements and to use the API Monogram after the effective date only on products that meet the new or revised requirements."

So, what does this mean? It means that you are required to compare the new product specification edition with the existing edition; and depending upon the specification and the level of revisions, you may have some work ahead of you.

The simple way to do this is with a "gap analysis". This identifies the new requirements in a table and shows if anything in your quality management system needs to change. It also states which document or documents have to be changed. For example: A product specification may identify a revision to a calibration frequency to a pressure gauge. Document this change and adjacent to it in a table identify which procedures have to change (e.g., calibration procedure, test procedure, calibration recall log, etc.).

While this may be time consuming, think if it as reducing your risk of noncompliance to the product specification requirements and mitigating the possibility of notifying your customer or recalling product if you do not comply.

To keep you up to date with upcoming changes, the following two (2) sources are invaluable:

Despite the perception that it is due to the current economy, the fact of the matter is that users of oil and gas industry equipment are becoming more demanding about quality, specifically with API Product Specification equipment.

Think of the cost of a piece of equipment that goes downhole that fails, and what that failure represents to the end user.

Manufacturers typically replace the equipment, but it's not that easy for the user. Their costs include retrieving the equipment, transportation, re-installation and the probability of lost revenue due to a well not realizing its full potential (depending upon the type of failure).

In general, the industry is becoming more demanding, and rightly so when you add in health and safety associated with higher well pressures.

So why are audits and compliance to the Monogram Program becoming tougher? The bottom line is continual improvement - and here is the reality:

I. Auditor Scrutiny

Initial qualification - focus on the auditor having or attaining an international auditor recognition such as IRCA, RABQSI and/or ASQ-CQA

Examination - testing on each and every product specification that they audit, no exceptions

Observation - watching a qualified auditor perform an audit; a qualified auditor watching a new candidate perform an audit

Monitoring - input from the licensees on the auditor performance and periodic observation by the API and/or seasoned auditors

Note: It helps to be honest and specific on your submittal of the auditor performance form; this will be a catalyst for change

II. Product Questions

The API is including product questions in the audit packages. The basic input on how to do this came from the Task Group for Auditing Effectiveness which I chaired. The task group has recently been disbanded, but API is using our recommendations with regards to putting together product specification questions for the audits.

III. Q1, Modifications

Q1 is changing. The major changes began in 2007 with the 7^th Edition which parallels ISO 9001:2000. Now we have the 8^th Edition and some additional changes will be forthcoming this fall due to the recent ISO 9001:2008 modification.

The 7^th Edition brought about more administrative considerations and maintained the procedures required by Q1, 6^th Edition and ISO 9001:1994. There are 7 procedural requirements in Q1 and approximately 18 control features.

Requirements are becoming more specific. This is the difference between ISO 9001 compliance and Q1 compliance. Q1 is linked to product specifications; this means compliance in tandem; Quality and Product. It provides a direct linkage to a product specification and this is what the users want to see; that the licensee knows, understands and complies with the product requirements while operating the oversight of a documented quality management system.

IV. API Advisories
(http://www.api.org/certifications/monogram/documents/advisories.cfm)

API issued advisories for the conduct of its business related to the Monogram Program. All of the advisories are important. I believe the two most important are:

Advisory #3 - This advisory basically states that the management representative has to be an employee of the company and consultants cannot be audited or interject responses during the audit process.

Being both a consultant and an auditor, this is a sound business practice. It prevents a consultant from responding to the auditor's questions; and also means that the licensee must be ready for the audit. There are no mistakes here; the licensee must know their quality management system.

We take a more biased approach, we require our customers to "talk the walk and walk the talk". This is best summed up by:

Advisory #8 - This is an onerous advisory notice in some ways. Basically it means that you can not turn on and turn off your quality management system. A quality management system operates with your day to day activities.

In looking deeper it means that your quality management system (QMS) applies to all the work you do in your facility. The QMS is not exclusive to the API Product Specification requirements, but is required for all products, both monogramable and non-monogramable that you produce.

An example would be manufacturing API Spec 6A valves under license and also manufacturing general service valves for the pipeline industry that do not fall under the Monogram Program. Advisory #8 clearly states that your QMS must apply to all products. The users want to know that your QMS covers general application products as well as monogrammable products.

This is not as bad as you may think, as this approach allows you to achieve high grade levels of compliance. In short, this means that your process control for monogrammable product will be more specific than your commercial grade product.

V. Oversight of ANAB

The ANAB is the ANSI - ASQ National Accreditation Board, which is the U.S. accreditation body for management systems certification. The ANAB is the recognized accreditation board for the United States under the International Conformity Assessment Movement (i.e., in shore standardization of product for trade) http://www.anab.org/HTMLFiles/ab_faq.htm.

While the ANAB does not monitor the API for the Monogram Program, it does for ISO 9001 and TS 29001 certification activities under API Quality Registrar (APIQR). Since the two programs are similar, the API is applying some of the lessons learned under their ANAB certification to the Monogram Program in order to maintain more consistency.

VI. API Audit Report

The API Audit Report is the outline which auditors use to conduct their audit. The layout of the audit report incites the auditor to ask questions using a specific methodology. This allows the auditor to dig deeper into the licensee's ability to comply. Also, the product questionnaire blends both quality management system and product questions, getting to the very heart of compliance. Are you complying or aren't you?

VII. API Purchasing of Monogrammed Equipment Course

The API offers a purchasing program to the users; that identifies product specification requirements, supplemental requirements and subtleties about the product specifications. The goal of the program is to make users more aware of the product specification requirements and the benefits of the API Monogram Program.

• Withdrawn - facility's choice / due to market changes, mergers, changes in product specification, etc.
• Suspended - API's choice / due to significant noncompliances identified during an API audit
• Cancelled - API's choice / due to extreme systemic noncompliances identified during an API audit
• Inactive - facility's choice / due to economic conditions