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NHQ Builder
Quality Management System Requirements

Introduction
Notes
1.0 General
2.0 Quality System and Safety Program Management
3.0 Production Operations
4.0 Warranty and Service Operations
5.0 Sales Operations

Download the NHQ builder requirements

Revised December 13, 2004.

Introduction

These Quality System Requirements were developed based on ISO 9000 quality principles and adapted to residential builder business practices based on the experience of the NAHB Research Center working with numerous builders and trade contractors.

As with any good quality system, this set of requirements is continually subject to improvements. As experience is gained on the effectiveness of this type of quality assurance system with home builders, it will be changed and improved. The overall intent is to provide a system that will assure consistent customer satisfaction and continual improvement.

The quality assurance guidelines apply to all home builder organizations in residential new construction.

Notes

The following notes may be used to clarify these requirements:

The intent of these requirements is to define the major elements of a practical quality assurance system for home builders.
Considerable latitude is allowed for the builder to develop and implement a quality assurance system customized to their organization’s needs. The organization/format of the quality manual does not need to follow the organization of these requirements; however, a compliant system shall cover all the clauses of these requirements.
The terms effective or adequate should be interpreted to mean that evidence is available to show that the quality plan is being fulfilled.
Undocumented processes are common but these should be clearly and uniformly understood by those in the organization needing to use them. Flow charts and brief process outlines are encouraged wherever practical. These requirements explicitly state when a retrievable document is required by the use of the terms document, defined in, record, or written . The term policy is also used to indicate the need for a retrievable document.
A functional area is a separate department or independent management area within the company that has its own quality representative reporting to the company quality representative, and administering its own quality plan within the company’s quality system. The company must include in the quality system functional areas covering production, warranty/service, and sales. A company may include other functional areas as they see benefit in doing so.
A functional position is a position in the organization with specific responsibilities for implementing some or all of the company’s quality system.
A jobsite can be considered a community where a builder is building multiple houses at one time.
If the company is depending on a trade contractor’s quality system which has not been certified to meet some of these requirements then the company must provide assurance through auditing or other methods that the contractor’s quality system is effective.

1.0 General

1.1 Scope - The quality manual shall include the scope of the services and/or housing products provided and the geographic region served by the company (or division of the company) and governed by the quality system defined in the quality manual.

1.2 Leadership - Senior management shall provide executive leadership to the company's quality and safety initiatives. This shall include setting policy and performance expectations, communicating to the organization the importance of safety and meeting customer expectations, providing resources, and reviewing the effectiveness of the quality system and safety program.

1.3 Quality and Safety Statement - There shall be a written statement by senior management that describes the company’s commitment to quality and meeting customer's expectations. The quality statement will commit the entire organization to continuous improvement and achieving measurable quality results. It shall be communicated to customers, suppliers, trade contractors, and employees.

The company shall also have a written statement from senior management that defines the company’s commitment to jobsite safety and an accident prevention program. The safety statement will commit the entire organization to maintain an accident prevention program and endorsing a zero-accident occurrence policy. This policy will be communicated to employees and trade contractors. The safety statement shall obligate the company to maintaining an active safety/accident prevention program in compliance with local, state, and federal safety requirements and established good safety practices.

1.4 Quality System - The company shall develop and maintain a controlled, documented quality system that promotes continual improvement. The quality system shall be documented in a quality manual. This manual shall define or reference the company’s policies, processes, procedures, and documents that assure that customer expectations and company standards are met. The company shall provide ready access to the most current versions of the pertinent quality system documents to those personnel needing them. The quality system shall cover all areas of the company having a direct impact on the “as built” quality of the house and on customer expectations. At a minimum, this will include those functions included in Sections 3.0, 4.0 and 5.0. (See note 5.)

1.5 Safety Program The company shall develop and maintain a safety and accident prevention program. This program shall be documented. The company shall develop and utilize procedures that will inform, enforce, and support the jobsite safety program.

1.6. Responsibilities

1.6.1 Quality Responsibilities Quality responsibilities shall be established for all employees including accountability for adhering to quality system policies and procedures. The manual shall outline the major responsibilities of the senior manager (e.g. Quality Manager) responsible for the company wide quality system. Each operating area or functional area included in the quality system of the company shall have a designated quality representative with responsibility for managing the quality system in their area. Management responsibilities shall include ensuring that all employees have an awareness of the quality system and the quality commitment, are following those portions of the system appropriate to their job, and understand the importance of the system.

1.6.2 Safety Responsibilities Safety Responsibilities shall be established for all employees regarding adherence to the safety program. The program shall outline the duties of the senior manager responsible for safety. Management responsibilities shall include ensuring that all employees have an awareness of the safety commitment and the safety program, and its application to their work activities.

1.7 Organization Chart There shall be a company organization chart showing the reporting relationship of all functional positions. The senior manager(s) responsible for quality and safety shall be identified on the organization chart. (See note 6.)

1.8 Component Personnel Personnel in each functional area shall be qualified and competent to fill assigned positions. Each functional area shall develop and maintain job descriptions that define the responsibilities and qualification requirements of all positions key to meeting customer expectations and/or the quality of the “as built” house and the safety of the jobsite operations. At least one employee who is generally available at the job site shall have completed the OSHA 10 hour training class. This person shall have the authority to address safety related issues on the job site. (See note 7.)

1.9 Training A program of training for all personnel involved in meeting new homebuyer expectations shall be implemented. This training shall include training in the technical requirements of the positions, operation of the company’s quality system, training in safe work methods/accident prevention, and management of the company’s safety program. Ongoing training shall focus on identified opportunities for improvement that lead to reduction of recurring quality non-conformances and recurring safety non-conformances in the builder’s operation. At a minimum, training needs specific to the areas of production, warranty, service, and sales shall be included.

1.10 Corporate Communications Procedures shall be implemented to assure communication exists between all areas of the company and the trade partners of the company. This includes identification of and communication to other functional areas to address recurring non-conformances in production, service, sales, and jobsite safety. There shall be procedures implemented to communicate with new home buying customers and to manage their expectations. The company shall implement a formal plan to communicate to their trade contractors the company’s safety policy and expectations.

1.11 Customer Feedback The company shall establish and implement procedures to evaluate customer satisfaction with the company’s work. This assessment shall be conducted at least annually and shall identify overall satisfaction as well as satisfaction with the various functional areas of the company that comes in contact with the new home buying customer. The results of this assessment shall be considered in analyzing the effectiveness of the quality system and initiating changes to the system. These procedures shall be documented and records kept of the customer feedback.

1.12 Performance Measures The company shall establish performance measures and goals that are indicative of the effectiveness of the quality system and safety program. These shall be defined, documented, and quantified for each functional area covered by the company’s quality system. Progress towards meeting these performance measures shall be documented quarterly.

1.13 Company Process Flow The company shall define and document a sequence or sequences of activities for the overall company at a minimum for sales, production/purchasing, and warranty service, and their relationships to each other. Each sequence shall include all major planning, work, and quality assurance activities.

2.0 Quality System and Safety Program Management

2.1 Management Committees - A quality management committee shall be established and at a minimum shall consist of the quality manager, the quality representatives for each functional area, and a senior management representative. This committee shall meet periodically to review the overall operation of the quality system. Minutes of the committee meetings shall be documented.

A safety management committee shall be established and at a minimum shall consist of the Safety Officer, appropriate management representatives, and representative superintendents. The committee shall meet periodically to review the overall safety program and accident prevention program. Minutes of all meetings shall be documented.

(Note: The Company may combine the quality management and safety management committees.)

2.2 Annual Management Review - At least annually the quality management committee and the safety management committee shall review the operation and effectiveness of their respective systems with the senior management of the company. The annual review shall include a summary of the independent reviews of the activities of each functional area of the company, performance measures, customer feedback, trade contractor and supplier feedback, complaints, and recommendations from the quality representatives. The annual review shall also include assuring compliance with these requirements, setting new annual goals, and addressing needed changes to the system. Records shall be maintained for each review. The records shall be in sufficient detail to disclose the participants, significant issues, conclusions, recommendations, and planned changes.

2.3 Third-Party Audits The quality system shall be evaluated by the NAHB Research Center to assess compliance with the system. This evaluation shall occur at least annually, or as necessary to assure the continuous effective operation of the quality system.

2.4 Quality System and Safety Program Changes - The company shall have a documented approval procedure for incorporating changes and improvements to the quality system and safety program. Individual functional area quality system changes must be approved and integrated into the overall company quality plan.

2.5 Document Control - The company shall have procedures for updating and controlling the quality system documents to assure they are current. The company shall have procedures for assuring that obsolete documents cannot be used. These documents include the quality manual, reference documents, and supporting procedures.

2.6 Record Keeping - The company shall define a procedure for the retention of quality and safety records and shall specify which records shall be kept and for how long. Further, it shall specify how records are disposed of once they have matured beyond the retention period. Records shall be maintained for a minimum of three years.

Safety records relating to inspections, equipment, training, meetings, and injury occurrence shall be kept. The records that satisfy local, state, and federal safety management record keeping requirements shall be kept available and accessible during the prescribed period.

2.7 Update of Referenced Documents The company shall provide a procedure that assures each code, regulation, industry standard, company standard, or manufacturer’s instructions are reviewed and the references for each in the quality program are updated annually. The company shall communicate any changes to key personnel and appropriate trade contractors. Any such changes are to be incorporated into the builder’s and the trade contractor’s quality system, as needed.

3.0 Production Operations

3.1 Production Operations Quality Plan

3.1.1 Scope of the Production Operations - The production operation shall define the scope of its operations including the purchasing function.

3.1.2 Process Flow - The company shall define and document a sequence or sequences of activities for the production operation of the company. This sequence shall include all major planning, work, and quality assurance activities.

3.1.3 Trade Contractor and Supplier Contract Documents and Scopes of Work

3.1.3.1 General Procedures shall be implemented to review all construction contracts and construction documents related to the production process to assure expectations of the new home buyer customer are defined and can be met.

3.1.3.2 Individual Trade’s Contracts Procedures shall be implemented to prepare and review the subcontracts and construction documents specific to the work of each trade utilized by the production operation to assure that new home buyer customer expectations are defined and will be met. Trade contracts shall include agreed upon job ready conditions. Trade contracts shall also include provisions requiring the trade contractor to comply with all safety regulations and provide their accident prevention plan to the company.

3.1.4 Codes, Standards, and Regulations Procedures shall be implemented to assure the all applicable codes, industry standards, and governmental regulations, including safety, are identified and complied with.

3.1.5 Company Standards Procedures shall be implemented to document and include in Scopes of Work the requirements for workmanship, including tolerance requirements, construction standards, construction procedures, and material specifications. When a conflict exists between local practice and other requirements (e.g. industry standards, manufacturer’s instructions, etc.), there shall be a procedure for allowing exceptions while maintaining quality. There shall be a procedure to require that all equipment used in the construction process requiring calibration is properly calibrated and maintained. (Note: Procedures, standards, and materials included in the quality system of their NHQ certified trade contractors may be utilized to meet parts of the requirements of this section. See note 8.)

3.1.6 Manufacturer's and Product Installation Instructions The production operation shall develop and implement procedures for obtaining and maintaining current copies of all installation instructions and assuring that all products are properly installed. The production operation shall also develop and implement procedures for determining safe installation methods, safety equipment, and personal protective equipment for all products installed. (Note: NHQ certified trade contractor’s quality/safety programs can be used to satisfy part of the requirements of this section. See note 8.)

3.1.7 Safety Plans The production operation shall develop and implement applicable safety plans for hazards on the jobsite. Trade contractors shall be required to have compliant plans in these same areas, where applicable, to their work activities on the jobsite.

3.1.8 Safety Procedures The builder shall recognize the particular safety rules and procedures for their operations, make them available for all employees, and train the affected employees. Trade contractors will also adopt these procedures for their workforce, and implement these procedures on each jobsite.

3.1.9 Scheduling Time requirements for completing each segment of work in the production operation shall be established. Methods and systems for organizing and scheduling the work to meet established time requirements and to facilitate quality construction shall be established. Processes to monitor the work progress shall be established and shall have criteria under which deviations from the time requirements can occur. Procedures shall be established for communicating all schedules and any schedule changes to trade contractors, suppliers, and new home buyer customers.

3.1.10 Approval and Selection of Trade Contractors, Materials, and Other Support Services Procedures including quality criteria and safety record/program shall be established and implemented for review, approval, selection, and monitoring of:

3.1.8.1 Trade Contractors,
3.1.8.2 Materials and Suppliers, and
3.1.8.3 Other Support Services.

An approved vendor list shall be maintained of all suppliers, trade contractors and support services. This list shall be reviewed at least annually. There shall be a procedure for both adding to or deleting from the approved list of suppliers, trade contractors or support services firms.

3.1.11 Version Control Procedures shall be established and implemented to assure that all plans and specifications are updated when changes are made, and that no outdated or obsolete versions of construction documents, trade contractor scopes of work, or inspection procedures can be used.

3.1.12 Job Completion Policy There shall be a policy that states the conditions under which a new home can be closed. It shall include how any items to be completed or corrected after closing or other formal turnover shall be handled.

3.1.13 Protection of Work There shall be a policy established to protect completed work of individual trades and of the entire completed lot or home. This policy shall address the correction of damage to completed work, as well as procedures for the prevention of similar problems in the future.

3.1.14 Quality System Changes

3.1.14.1 The production operation shall implement a documented approval procedure for incorporating changes and improvements to the production operations quality system.

3.1.14.2 Individual changes to the production operation’s quality plans must be approved, documented and integrated into the overall company quality plan.

3.2 Production Operations Inspections

3.2.1 Job Ready Procedure Job ready conditions that are required to ensure quality and jobsite safety prior to beginning each phase of construction work shall be established and documented. There shall be a documented procedure for the production operation of the company that provides guidance for proceeding when job ready conditions are not met. The job ready procedures shall include measures to assure that quality and safety are not compromised when proceeding before all job ready conditions are met. (Note: Job ready conditions included in the quality system of the company’s certified trade contractors may be utilized to meet the requirements of this section. See note 8.)

3.2.2 In-Process Inspections or Reviews Activities and work done in the production operation shall have documented in-process inspections to assure that the builder’s quality plan is being followed. These shall be documented prior to the covering or concealment of any trade’s completed work.

(Note: When documentation provided by a NHQ certified trade contractor is used to meet this requirement, the company shall periodically review the trade contractor’s job site quality procedures to assure confidence in the accuracy in the trade contractor’s documentation. Each trade contractor shall be required to provide documented assurance that, at the time their work is completed and turned over to the company, the work is complete and meets the company’s requirements.)

Periodic safety inspections shall be made and documented at all jobsites. Trade contractors not in compliance will be notified immediately.

3.2.3 Final Inspection The completed work product for the production operation shall have a final inspection to verify conformance with the job completion policy. Any non-conformances to the builder’s quality plan shall be recorded. Corrections shall be completed and documented in accordance with the job completion policy.

3.2.4 Corrective Action Deviations from the quality plan shall be corrected in a timely fashion and in such a way as to assure the quality of the completed work. These deviations and their correction shall be documented.

The company shall have procedures to promptly address any safety issues identified.

3.2.5 Inspection Records

3.2.5.1 Quality Inspection Records Records shall be maintained of all code compliance inspections and when deficiencies are noted the production operation shall provide a copy to the trade contractor responsible for the work. The production operation shall document its own internal inspections of job ready, work in progress, and work completed sufficient to assure that all work meets the company standards of the builder.

3.2.5.2 Safety Inspection Records Records shall be maintained of all safety inspections. Safety non-conformances will be documented and copied to both the appropriate trade contractor and to the company’s senior manager responsible for safety.

3.3 Production Operations Continual Improvement

3.3.1 Preventive Actions Actions shall be established and implemented to eliminate recurring quality and safety issues in the production operation. These actions shall include identification, prioritization, cause analysis, and development and implementation of a plan of preventive action. The effectiveness of the preventive actions shall be evaluated. When identified issues have not been eliminated, the plan shall be reassessed and appropriate actions initiated.

3.3.2 Production Operations Training A program of ongoing training for all production operations employees and trade contractors involved in meeting quality and safety requirements and new home buyer customer expectations shall be implemented. This training shall focus on identified opportunities for improvement that lead to reducing recurring quality and safety issues in the production operation. Training of production personnel shall include how to assure that job ready conditions exist for all phases of construction work and how to maintain a safe jobsite. This training shall include both task specific skills and training in the operation of the functional area’s quality system. (Note: Hot-Spot training included in the quality system of the company’s NHQ certified trade contractors may be utilized to meet some of the requirements of this section. See note 8.)

3.3.3 Internal Reviews The company quality committee shall require internal reviews of the production operation, to assure that the policies and procedures of the production operations quality system and safety program are met. The reviewer shall be trained and independent of the production operation. These reviews shall be documented. When deficiencies in the operation of the quality system or safety program are identified, steps to correct any nonconformance shall be taken in a timely manner. Frequency and scope of internal reviews shall be sufficient to assure the effectiveness of the quality system, but shall be conducted at least twice each year.

3.3.4 Trade Contractor Quality Assurance Program Support The production operation quality system shall integrate with quality assurance programs of trade contractors and other material and service providers. Communication shall be established between the production quality representative of the company and the quality representatives of the trade contractors to support the quality initiatives of each other. Where a trade contractor quality assurance program does not exist, the production quality representative will establish necessary procedures (including inspections) for assuring that the quality of the trade contractor’s work meets customer expectations and that their work is accomplished in a safe manner. Feedback shall be provided to the trade contractor to enable the trade contractor to improve the quality and safety of their work. Feedback shall be solicited from the trade contractor in order for the company to improve the quality and safety of the company's work.

4.0 Warranty and Service Operations

4.1 Warranty and Service Operations Quality Plan

4.1.1 Scope of the Warranty and Service Operations The warranty and service operation shall define the scope of its operations including whether employees or trade contractors typically do warranty service work in existing homes, and what conditions must be met to affect “turnover” from production operations to warranty and service operations.

4.1.2 Process Flow The company shall define and document a sequence or sequences of activities for the warranty and service operation of the company. This sequence shall include all major communications, service work in existing homes, managing and tracking service requests, and quality assurance activities.

4.1.3 Warranty Documents, Repair Procedures, and Installation Manuals

4.1.3.1 General The company shall have a defined warranty policy that is provided to each home buyer customer.

Procedures shall be implemented to review all warranty documents including performance standards for all items and systems found in a new home to assure expectations of the new home buyer customer are met.

4.1.3.2 Individual Trade’s Performance Standards Procedures shall be implemented to develop each trade contractor’s scope of work to assure that warranty service work meets the performance standards set forth in the warranty documents.

4.1.3.3 Procedures and Manuals The warranty and service operation will maintain current copies of repair procedures and installation manuals for any materials or equipment that needs or requires repair or replacement.

4.1.4 Codes, Standards, Regulations, and Manufacturer’s Instructions Procedures shall be implemented to assure that all applicable codes, industry standards, governmental regulations, and manufacturer’s instructions are identified and complied with.

4.1.5 Warranty and Service Operations Policies Procedures or standards shall be developed and implemented for:

Communicating the company’s warranty and service obligations and the company’s commitment to the new home buyer.
Workmanship standards
Addressing and successfully completing warranty and service work.

Receiving and documenting warranty and service requests.
Confirming any work required
Scheduling the required work
Completing the required work
Obtaining a customer sign-off of the completed work

Tracking the warranty and service work requested through completion.
Determining the level of new home buyer satisfaction with the Warranty and Service operation.
Identifying the monetary approval authority or the permitted level of commitment of company resources for warranty and service personnel.
Identifying future steps to prevent recurring warranty and service needs.
Ensuring that all equipment necessary for Warranty and Service operations is properly calibrated and/or maintained.

4.1.6 Scheduling Processes to schedule and monitor the work progress shall be established and shall have criteria under which deviations from the time requirements can occur. Procedures shall be established for communicating all schedules and any schedule changes to trade contractors, suppliers, and new home buyer customers.

4.1.7 Selection and Approval of Trade Contractors, Materials, and Other Support Services to Complete Warranty Service Work Procedures based on quality and safety criteria shall be established and implemented for review, approval, selection, and monitoring of any trade contractors or consultants not already approved by the Company. A list of any such trade contractors or consultants shall be maintained and be reviewed annually. There shall be a procedure for both adding to or deleting from the approved list of trade contractors or consultants.

4.1.8 Version Control Procedures shall be established and implemented to assure that the files for all new homes covered under the company’s warranty documents clearly indicate which version of the company’s warranty applies to that new home. When more than one version of the company’s warranty exists, all warranty and service personnel shall understand the terms and coverage of the warranty as it relates to each house.

4.1.9 Confirmation of Completed Warranty and Service Work There shall be a procedure that secures the homeowner’s confirmation that a warranty or service request has been completed. This procedure shall address when and under what conditions a warranty or service request can “remain open” until some reasonable confirmation that the warranty or service work is, in fact, satisfactory.

4.1.10 Protection of Work There shall be procedures established to protect all affected areas of a completed home during the work of individual trades or warranty personnel. These procedures shall address the correction of any damage occurring to a completed home and the process of authorizing any such correction.

4.1.11 Quality System Changes The warranty and service operation shall implement a documented approval procedure for incorporating changes and improvements to the warranty and service operations quality system. Individual changes to the warranty and service operation’s quality plan must be approved, documented, and integrated into the overall company quality plan.

4.2 Warranty and Service Operations Inspections

4.2.1 Confirmation of Needed Warranty or Service Work After the receipt of a warranty or service request, there shall be procedures established and implemented to determine the scope of the actual work required in accordance with the company’s Warranty and Service Operations Policy.

4.2.2 Final Inspection The warranty and service operation shall have a warranty request completion policy. The completed warranty and service work shall have a final inspection. All non-conformances to the quality plan shall be documented. Corrections shall be completed and documented in accordance with the Warranty and Service Operations Policy. Each trade contractor shall be required to provide documented assurance that, at the time their warranty or service work is completed, the work is complete and meets the builder’s requirements.

4.2.3 Corrective Action Deviations from the quality plan and safety program shall be corrected in a timely fashion and in such a way as to assure the quality of the completed work and the satisfaction of the new home buyer customer. These deviations and their correction shall be documented.

4.2.4 Inspection Records Records shall be maintained of all warranty and service inspections and when deficiencies are noted, the warranty and service operation shall provide a copy to the warranty personnel or appropriate trade contractor. The warranty and service operation shall document inspections of work completed. (Note: Inspection records for warranty or service work included in the quality system of the company’s NHQ certified trade contractors may be utilized to meet the requirements of this section. See note 8.)

4.3 Warranty and Service Operations Continual Improvement

4.3.1 Preventive Actions Actions shall be established and implemented to eliminate recurring quality and safety issues in the warranty and service operation, or production operations. These actions shall include identification, prioritization, cause analysis, development and implementation of a plan of preventive action. When appropriate these actions shall include recommendations of changes in materials, equipment, trade contractors, or company performance standards. The effectiveness of the preventive actions shall be evaluated. When identified issues have not been eliminated, the plan shall be reassessed and appropriate actions initiated.

4.3.2 Warranty Service Training A program of ongoing training for all warranty and service operations employees and trade contractors involved in meeting new home buyer customer expectations shall be implemented. This training shall focus on identified opportunities for improvement that lead to reducing recurring quality issues in the warranty and service operation. This training shall include both task specific skills (including safety) and training in the operation of the company’s quality system. (Note: Hot-Spot training included in the quality system of the company’s NHQ certified trade contractors may be utilized to meet some of the requirements of this section. See note 8.)

Warranty and service operations staff will be trained on required repair and installation procedures for equipment or products used in the warranty and service operation. Warranty and service personnel shall be trained on any different versions of the company’s warranty and when those different versions apply. Warranty and service personnel shall be trained on industry performance standards, company performance standards, and work practices of the company’s trade contractors.

4.3.3 Internal Reviews The company quality committee shall require internal reviews of the warranty and service operation to assure that the policies and procedures of the warranty and service operations quality system are met. The reviewer shall be trained and from outside the warranty and service operation. These reviews shall be documented. When deficiencies in the operation of the quality system are identified, steps to correct any nonconformance shall be taken in a timely manner. Frequency and scope of internal reviews shall be sufficient to assure the effectiveness of the quality system, but shall be conducted at least twice each year.

4.3.4 Trade Contractor Quality Assurance Program Support Communication shall be established between the warranty quality representative of the company and the quality representatives of the trade contractors to support the quality initiatives of each other. Where a trade contractor quality assurance program does not exist, the warranty and service quality representative will establish necessary procedures for assuring that the quality of any trade contractor’s warranty work meets customer expectations. Feedback shall be provided to the trade contractor to enable the trade contractor to improve the quality of their warranty and service work. Feedback shall be solicited from the trade contractor in order for the warranty and service to improve the quality of the company's work.

5.0 Sales Operations

5.1 Sales Operations Quality Plan

5.1.1 Scope of the Sales Operations The sales operation shall define the scope of its operations including whether employees or independent realtors typically perform new home sales functions, when the “turnover” occurs from sales operations to production operations, and the customer selections and options process.

5.1.2 Process Flow The company shall define and document a sequence or sequences of activities for the sales operation of the company. This sequence shall include all major outreach, advertising, and external communications needed to develop sales traffic; staffing the model homes or other sales centers; writing, processing, and approving sales contracts; customer selections, options, and change orders; clearing contingencies, including financing; and communicating details of the new home to the production operation. The process shall include all necessary quality checkpoints to assure a satisfied new home buyer.

5.1.3 Sales Documents Procedures shall be implemented to review all sales documents and marketing materials documents to assure that the expectations of the new home buyer customer are appropriately defined and managed. These procedures shall assure that these documents and materials are confirmed to be correct at least annually.

5.1.4 Sales Operation Policy Procedures shall be developed and implemented for:

Soliciting and managing sales inquiries.
Tracking and servicing all prospects.
Negotiating and completing sales contracts.
Communicating the company’s sales offerings and the company’s quality commitment to the new prospect or new home buyer.
Identifying the monetary approval authority or the permitted level of commitment of company resources for sales personnel.
Confirming any agreements reached with new home purchasers.
Communicating the construction schedule of a new home.
Communicating any changes or modifications to the new home delivery times.
Communicating the company’s job site safety procedures, as they relate to the customer or their representatives, to the customer
Obtaining customer concurrence at prescribed points in the new home construction process.
Tracking the sales process through contract, selections, contingency removal, home completion, and new home closing.
Determining the level of prospective customer satisfaction with the marketing and sales process.
Determining the level of new home buyer satisfaction with the marketing and sales operation.
Identifying future steps to improve the marketing and sales process.

The sales operation shall maintain current copies of these procedures. These procedures shall be reviewed at least annually and updated as needed to improve customer satisfaction with the sales and marketing process.

5.1.5 Scheduling Procedures shall be established for determining and communicating all schedules and any schedule changes between the production operation and new homebuyer customers.

5.1.6 Version Control Procedures shall be established and implemented to assure that the current version of sales contracts, warranty documents, and marketing materials are utilized in the sales operation. When more than one version of the company’s sales or marketing documents exists, all sales personnel shall understand the proper use of those different versions of the documents.

Procedures shall be established as needed to ensure that the most current documents (including options, selections, and change orders) relating to the sale of a specific house are the documents available and referenced by all employees and trade contractors.

5.1.7 Confirmation of Sales Process Completion There shall be a procedure that secures the home owners confirmation that each step in the sales process has been completed. This procedure shall address when and under what conditions new information or action is required by either the new home buyer customer or any company personnel.

5.1.8 Quality System Changes The sales operation shall implement a documented approval procedure for incorporating changes and improvements to the sales operations quality system. Individual changes to the sales operation’s quality plan must be approved, documented, and integrated into the overall company quality plan.

5.2 Sales Operations Quality Review

5.2.1 Final Document Review The sales operation shall develop and implement a document review procedure prior to filing a completed sales contract or a completed new home purchase. Any non-conformances to the quality plan shall be recorded. Corrections shall be completed and documented in accordance with the sales completion policy.

5.2.2 Corrective Action Deviations from the quality plan shall be corrected in a timely fashion and in such a way as to assure the quality of the completed work and the satisfaction of the new home buyer customer. These deviations and their correction shall be documented.

5.2.3 Review Records Records shall be maintained of all sales process reviews and when process deficiencies are noted, the sales operation shall implement a procedure to improve or correct the process. The sales operation shall document internal reviews of sales contracts in progress and completed sales.

5.3 Sales Operations Continual Improvement

5.3.1 Preventive Actions Actions shall be established and implemented to eliminate recurring quality issues in the sales operation. These actions shall include identification, prioritization, cause analysis, development and implementation of a plan of preventive action. When appropriate these actions shall include recommendations of changes in sales and marketing procedures or documents. The effectiveness of the preventive actions shall be evaluated. When identified quality issues have not been eliminated, the plan shall be reassessed and additional appropriate actions initiated.

5.3.2 Sales Operations Training A program of training for all sales operations employees and independent realtors involved in meeting new homebuyer sales and marketing expectations shall be implemented. This training shall focus on identified opportunities for improvement that lead to reducing recurring quality issues in the sales operation. This training shall include both task specific skills and training in the operation of the company’s quality system. Suggestions for and coordination of the training subjects from the production operation and the warranty and service operation may be utilized to meet some of the requirements of this section. Sales operations staff will be trained on the use of approved documents and procedures for assuring a complete and accurate sales documentation process that meets the expectations of the new home buying customer. Sales personnel shall be trained on any different versions of the company’s sales documents and when those different versions apply. Sales personnel shall be trained on industry practices, standards, and safety regulations.

5.3.3 Internal Reviews The company quality committee shall require internal reviews of the sales operation, to assure that the policies and procedures of the sales operations quality system are met. The reviewer shall be trained and from outside the sales operation. These reviews shall be documented. When deficiencies in the operation of the quality system are identified, steps to correct any nonconformance shall be taken in a timely manner. Frequency and scope of internal reviews shall be sufficient to assure the effectiveness of the quality system, but shall be conducted at least twice each year.

NHQ Builder Quality Management System Requirements