LEVEL II QMS

Title: SpaceX Source Inspection Program

Document No.: SPX-00042457

Procedure Owner: Elizabeth Sondecker

Department: SUPPLY CHAIN MANAGEMENT

Document Reference: [Document Reference]

DOCUMENT APPROVAL

Approved Version: 3.0Approved By: Elizabeth Sondecker, Oscar Bernal, Mason Falk, Christian Green, Vibhor

Jain, Eric RomanoApproval Date: 2/6/2019Current Version: 3.0

ADDITIONAL APPROVALSChristian Green;Mason Falk;Oscar Bernal;Vibhor Jain

REVISION/CHANGE RECORD

Version Description1.0 Initial Release2.0 Various clarification updates

Contents1. PURPOSE..................................................................................................................22. DEFINITIONS ............................................................................................................23. REQUIREMENTS ......................................................................................................4

3.1. Eligibility for Source Inspection.........................................................................................................4

3.2. Source Inspection Requirements ......................................................................................................4

3.2.1. General Responsibilities........................................................................................................4

3.2.2. SPXQC-17 ..............................................................................................................................5

3.3. The Source Inspection Process .........................................................................................................9

3.3.1. Requesting Source Inspection...............................................................................................9

3.3.2. During the Source Inspection Event ...................................................................................10

3.4. Source Inspection Results ...............................................................................................................11

4. REFERENCE DOCUMENTS...................................................................................11Appendix.........................................................................................................................13

TablesTable 1: Avionics Component Source Inspection 7

FiguresFigure 1: Sample Purchase Order Bill of Material 5

Figure 2 – Example of Masking w/ Defined Dimensional Limits (Source Inspection Required) 6

Figure 3 – Example of Masking w/ NO Defined Dimensional Limits (Source Inspection NOT Required) 6

Figure 4: Process Flow: Determining When Source Inspection Should be Performed 13

1. PURPOSEThe purpose of this procedure is to establish expectations for suppliers who participate in the SpaceX Source Inspection program, and communicate when Source Inspection is required.

2. DEFINITIONSAssembly - One or more sub-assemblies or piece parts.Bill of Material (BOM) – A complete list of all part numbers and quantities of parts needed to manufacture a certain product.Certificate of Compliance (CoC) – A document provided by the Seller and certified by a competent authority that the provided goods or services meet all required specifications. Alternatively referred to as a Certificate of Conformance.Child Part / Piece Part – A piece part that is later built into a multi-part assembly. Commercial Off the Shelf (COTS) – Any item or supply that is; (i) A commercial item, that is, of a type customarily used by the general public or by non-governmental entities for purposes other than governmental purposes, and (a) Has been sold, leased, or licensed to the general public; or (b) Has been offered for sale, lease, or license to the general public; (ii) Sold in substantial quantities in the commercial marketplace; and (iii) Offered to SpaceX under a contract or subcontract at any tier, without modification, in the same form in which it is sold in the commercial marketplace.Finished Product - The part is in its finished state as required by the Purchase Order (ex: If part is ordered in a Manufacturing State (“M-state”), the product will be considered “Finished” once all requirements of the Manufacturing State are met.)

First Article Inspection (FAI) – A First Article Inspection (FAI) is an inspection record which is used to validate that product realization processes were capable of producing parts and assemblies which meet engineering, design, and compliance requirements at a given point in time. These records are documented on an AS9102B form.Hard Fail – A non-conformance identified in a Source Inspection event which cannot be fixed within a two hour time period. A Hard Fail does not necessarily require an SRI submission. In-Process Product - Additional inspection, processing, assembly, or compliance-related review is required for the part. Not all of the requirements have been fulfilled. Examples:

Child part(s) that will later be assembled into the part purchased on the PO. A part where cleaning / processing remain to be completed. Part has completed scope of work at Supplier, but will be sent to a third party for processing and

then will be shipped directly to SpaceX.Inspection Authority – A program by which a supplier and supplier personnel are certified to release product on behalf of SpaceX. Source Inspection results will be used as qualifying criteria for this program.Manufacturing Lot – A batch of parts that shall, as far as is practicable, consist of units of product of a single type, grade, class, size and composition, manufactured under essentially the same conditions and at essentially the same time.Manufacturing Development Program (MDP) – Synonymous with the SpaceX Part Approval Process, is a mechanism by which suppliers may obtain inspection authority on mature parts where SpaceX has completed a full production / inspection review. See SPX-00040165 for details.Manufacturing State (M-State) - Variant or interim configurations of a part to facilitate the manufacturing process. A part which may be procured in a condition less certain features / requirements as defined by the Purchase Order, Manufacturing State drawing, or supplied model.Processing - Coating, conformal coating, plating, painting, masking, bending, forming, heat treating, etching, or any other process which would result in the inspection of a feature being impaired or otherwise unverifiable. Note this category includes but is not limited to “special processing” controlled by the SpaceX Approved Supplier List (ASL).Programmable Equipment – Inspection equipment which requires a program to accurately measure hardware; includes Coordinate Measuring Machines (CMM), Romer/Faro Arms, Optical, Laser, White Light, Blue Light, etc. Soft Fail – A non-conformance identified in a Source Inspection event which can be fixed within a two hour time period or before the end of the Source Inspector’s inspection event, whichever is shortest.Source Inspection Form (SIF) – SPX-00002162, the form that certifies the results of a Source Inspection.Source Inspection - The inspection of purchased products and documentation based on requirements in the Supplier Manual, on the PO and drawing, at the supplier’s facility to verify compliance with these requirements before shipment to SpaceX.Source Inspector – A SpaceX employee or third-party representative who acts on behalf of SpaceX.Special Processes – Those processes which cannot be verified by SpaceX prior to installation or delivery. Typically, these processes can only be tested or inspected by destructive testing. Examples include: Welding, brazing, plating, heat treating, non-destructive testing, etc. Note that SpaceX may elect to control certain processes as though they were Special Processes even if they do not meet the definition listed here.Sub-Assembly - Piece parts which have: hardware installed or press fit, inserts installed, or that are: bonded, welded, brazed, glued, sealed, crushed, snapped, locked, fastened, potted, seated, etc.Sub-tier Supplier – A supplier to which a SpaceX prime (i.e. direct) supplier subcontracts work.Supplier Request for Information (SRI) – SPX-00002691 is a form used to establish effective communication between SpaceX and Suppliers to assure compliance with required specifications. The

SRI form should be used as a means to 1) request information, 2) request approval for changes to product or processes, 3) request documentation and direction related to non-conformances / rework, and 4) submit an NDT technique for approval.

3. REQUIREMENTS

3.1. Eligibility for Source Inspection

Suppliers are evaluated by SpaceX to determine eligibility for approval to participate in the SpaceX Source Inspection Program. SpaceX reserves the right to revoke Source Inspection approval at any time.

Suppliers must meet the following minimum Source Inspection program qualifications:

Procedures to maintain equipment that accepts conforming material, including: in-process inspection, final inspection, and calibration procedures therein.

Procedure for control of non-conforming product.

3.2. Source Inspection Requirements

3.2.1. General Responsibilities

Source Inspection is required for each lot of material prior to shipment when stated on the SpaceX Purchase Order or otherwise notified. This inspection takes place at the Supplier’s facility and is conducted by a representative of the SpaceX Quality Assurance organization or a designated agent. A SpaceX Source Inspection does not preclude subsequent inspection nor does it relieve the Seller of the responsibility to provide acceptable product, and meet all other requirements stated/flown down through Purchase Order, drawing, and applicable specifications.

The supplier is responsible for providing the Source Inspector with access to calibrated gages and equipment. This includes: Hand tools, programmable equipment, any program/routine/script used to generate or calculate a result, and reports for all parts measured. Additionally, the inspector shall be provided with a well-lit and inspection-appropriate environment in compliance with the inspection requirements as defined by the drawing.

All parts, materials, and documentation submitted to a Source Inspectior shall be in an “inspection ready state” as if submitting to SpaceX for delivery. Accordingly, this information is subject to review, documentation, and transmission to and from SpaceX personnel or systems for processing and process compliance related purposes.

If a non-conformance is identified during a Source Inspection event, the supplier is responsible for either correcting the non-conformance and requesting another event prior to shipment of hardware to SpaceX or submitting an SRI. If the non-conformance can be corrected during the initial Source Inspection event (resulting in a soft fail), an additional Source Inspection is not required. If a disposition by SpaceX is requested via SRI as a result of a non-conformance, please reference Section 3.2.2.4 of this document for scheduling direction.

If an issue ticket(s) is required at any point, all parts shall be clearly identified with the issue ticket number(s) in accordance with the SpaceX Supplier Manual (regardless of status) prior to scheduling and submission.

Source Inspection shall be used to audit suppliers and / or hardware covered under the Manufacturing Development Program (MDP), as well as for approval of FAI submissions (if applicable).

In the event that a supplier to SpaceX contracts their own Source Inspection company to inspect SpaceX designed hardware at a sub-tier supplier, that supplier to SpaceX shall only utilize SpaceX-authorized Source Inspection vendors with SpaceX-authorized Source Inspectors. If a SpaceX supplier outsources any inspection or manufacturing activities, it is the supplier’s responsibility to notify SpaceX and have sub-tier supplier approved for Source Inspection by SpaceX before subcontracting the work.

3.2.2. SPXQC-17

Source Inspection shall be requested when required by the PO via SPXQC-17. When SPXQC-17 is indicated on a PO line / Bill of Material (See Figure 1 below), the supplier shall follow the procedure as defined in Section 3.2.2.1 for determining when and how many Source Inspections are required. It is the supplier’s responsibility to request Source Inspection when appropriate; failure to do so may result in features being inaccessible for inspection and may require the submission of an SRI. SRI submission does not guarantee acceptance or usability. Multiple Source Inspections may be required for a piece part or assembly. If in doubt about when to request Source Inspection, reach out to your Supplier Development Engineer or Buyer prior to manufacturing.

Review the print and relevant specifications upon contract award to determine when Source Inspection is required. Reference the process flow in Appendix A and the procedure below to help determine when to request a source inspection event.

Figure 1 – Sample Purchase Order Bill of Material

3.2.2.1. Determining When Source Inspection is Required, Machined Parts and Composites:

NOTE: Refer to Figure 1 in the Appendix for a visual guide.

For each piece part or sub-assembly:

a) If some or all dimensional limits or features apply BEFORE processing, request a Source Inspection PRIOR to each processing step, in the state(s) in which dimensional limits apply.

b) If some or all dimensional limits apply AFTER processing, request a Source Inspection AFTER processing, in the state(s) in which dimensional limits apply. If processing is not required, request a Source Inspection in the state in which dimensional limits apply. NOTE: This includes any marked, masked, or plated features for which defined dimensional limits exist. (Ref. Figure 2 - Example of Masking w/ Defined Dimensional Limits (Source Inspection Required) If no dimensional limits are applied to the marked, masked, or plated feature (ex. NOTE 2: “Mask all threaded holes”), or the feature is defined as a reference dimension, no additional Source Inspection events are required to verify those features specifically. (Ref. Figure 3 - Example of Masking w/ NO Defined Dimensional Limits (Source Inspection NOT Required)

Figure 2 – Example of Masking w/ Defined Dimensional Limits (Source Inspection Required)

Figure 3 – Example of Masking w/ NO Defined Dimensional Limits (Source Inspection NOT Required)

For each piece part, sub-assembly, or assembly:

c) Ensure that Source Inspection has been performed for all piece parts. Request a Source Inspection AFTER assembly has been completed in the state(s) in which dimensional limits apply.

d) If SPX-00022791 (Propulsion-Component Damage Spec.) or SPX-00035277 (Crew Dragon Valve Piece Parts Inspection) IS a requirement for any piece parts, sub-assemblies, or the final assembly, request a Source Inspection in the final, shipping-ready state and prior to any cleaning / sealed packaging operation.

3.2.2.2. Additional Instructions for Machined and Composite Parts:

All dimensional verification must be completed with the part in a free-state condition in compliance with ASME Y14.5 2009 Section 1.4(m) unless otherwise specified by the drawing, SpaceX Detailed Inspection Plan, or applicable specification.

For threaded inserts, a Source Inspection shall be performed on the host part in which the threaded inserts are being installed both pre- and post- insert installation.

o Pre-Installation: Prior to the installation, population, or seating of any threaded insert(s), all un-populated internal thread, hole, and chamfer dimensional limits must be verified per drawing requirements. This inspection shall occur in combination with any prior inspection where the feature is accessable, and prior to alodine application (if applicable).

o Post-Installation: Inspection of the insert(s) post-installation shall be completed after any and all installation, population, seating, plating, alodine, or potting application operations (if applicable) per drawing requirements.

If alodine is required on any masked area(s), verification shall be combined with any Source Inspection event (pre- or post-plating operation), and prior to the installation of all applicable hardware. Threaded inserts are an exception to this requirement and inspection may be combined with the post-installation inspection as specified above.

If the integrity of passivation, special plating, corrosion resistance, or environmentally controlled processes may be sacrificed / contaminated in order to successfully complete a Source Inspection event, all dimensional limits shall be verified prior to the processing operations unless otherwise specified by the drawing.

If dimensional limits are defined via an applicable specification or enacted via a drawing note, inspection shall be scheduled in compliance with Section 3.2.2.1. The only exception to this requirement is part mark depth requirements, which will be verified upon receipt at SpaceX.

In the case of assemblies which include multiple child parts, a single combined in-process inspection should be scheduled in an attempt to minimize the number of Source Inspections. However, several may be needed depending on the part configuration.

Child part feature inspection (such as plating, part mark, and cleaning) may be scheduled in combination with an assembly or sub-assembly so long as features requiring inspection are fully accessable. Multiple Source Inspection reports may be required as a result to document the varying states of inspection for compliance and tracking related purposes.

3.2.2.3. Determining When Source Inspection is Required, Avionics Components:

Source Inspection requirements for Avionics components are dependent on part type. Table 1 below indicates when Source Inspection should be performed.

Table 1: Avionics Component Source Inspection

Component Type Number of Source Inspections When to Perform Source Inspection

Connectors 1 Prior to shipping

Wire and Cable 1 Prior to shipping

Harnesses 1 Prior to shipping

PCBs 1 Prior to shipping

PCBAs 2-Prior to conformal coating

-Prior to shipping

Transducers 3

-Upon completion of machined parts

-Upon completion of PCBA integration into housing

-Prior to shipping

3.2.2.4. Scheduling Source Inspection for parts where an issue ticket exists

If at any point an issue ticket is required for a non-conformance or deviation, Source Inspection may be required to verify the documented condition. Several details and dispositions may be included in a single issue ticket, requiring different actions. If this is the case, please review each section below for those that apply.

When a Use As Is disposition has been communicated on any detail of an issue ticket (parts will deviate from drawing / Purchase Order requirements, and such deviation has been documented and approved via SpaceX issue ticket):

If a Use As Is disposition is determined due to a condition found during a Source Inspection event (resulting in a Hard Fail), no additional inspection is required to verify alignment to the issue ticket, and parts may be shipped to SpaceX if the following conditions are met:

1. All other necessary inspection is complete in accordance with Section 3.2.2.1 2. The issue ticket is in a “Closed” status3. There are no other details included on the issue ticket which have a disposition other than Use As Is.

If a Use As Is disposition is determined due to a condition found at any other point of the procurement process, or if additional inspection is required post disposition, it shall be verified in combination with any other Source Inspection event.

When a Rework disposition has been communicated on any detail of an issue ticket (condition on detail will meet all drawing / Purchase Order requirements at time of inspection):

For parts which are returned to supplier on a SpaceX issue ticket or as a result of a Supplier Request for Information (SRI) submission, where a “Rework / Replace” disposition is determined, the ability to inspect per the procedure in 3.2.2.1 may present challenges. The supplier shall complete a careful evaluation to understand if the rework required on the issue is feasible while continuing to meet all drawing / Purchase Order requirements.

Once part has been reworked to print and part is in an “inspection ready” status, Source Inspection shall be requested to verify rework.

Inspector will verify all available dimensions per the standard Source Inspection procedure in SPX-00002182. If any dimensions are not verifiable which may have been affected as a result of the rework, the supplier should submit a Supplier Request for Information (SRI). NOTE: Source Inspection for reworked parts should not be requested until all open issue tickets have been resolved, or if the issue ticket explicitly states to submit.

When a Repair disposition has been communicated on any detail of an issue ticket (parts will deviate from drawing / Purchase Order requirements, and such deviation has been documented and approved via SpaceX issue ticket).

For parts with a “Repair” disposition, the ability to inspect per the procedure in 3.2.2.1 may present challenges.

Supplier shall complete a careful evaluation to understand if the standard or SpaceX-requested repair may alter other dimensions on the part. Example: A repair resulting in undersized linear (which is documented via issue ticket) will also result in a Profile deviation (which has not been documented via issue ticket).

Part shall be repaired per the disposition instructions, and all dimensions shall be re-evaluated by the supplier for conformance.

Any dimensions not previously documented via issue ticket, which deviate from drawing requirements or cannot be inspected, must be communicated via a Supplier Request for Information (SRI).

Request Source Inspection when all repairs have been performed and validated. The Source Inspector will verify all available dimensions per the standard Source Inspection procedure in SPX-00002182. The issue ticket for repaired parts will remain open until receipt at SpaceX.

3.3. The Source Inspection Process

3.3.1. Requesting Source Inspection

Source Inspection shall be performed on piece parts, sub-assemblies, or assemblies when SPXQC-17 is listed on the relevant Purchase Order line or enacted via Bill of Material. (Ref. Section 3.2.2)

Scheduling requests shall be submitted a minimum of two (2) business days prior to the expected inspection date. All parts and necessary documentation shall be in an “inspection ready” state and available to the Source Inspector upon arrival at the supplier’s facility.

Requests submitted after 3:00PM local time will be processed the following day.

All SpaceX issue ticket details (including those generated as a result of an SRI submission) must either be “Closed”, “Work In Progress”, or “Verification” status prior to scheduling inspection. These tickets must contain closed details or interim dispositions which provide direction to ship parts.

Failure to provide hardware / documentation which is in an “inspection ready” state at the time of inspector arrival may result in either a soft or hard fail, depending on severity. If inspection readiness is in doubt after a request has been submitted, a second request to cancel or delay the inspection shall be submitted.

In the event of a hardware or documentation non-conformance that can be corrected within two hours, the supplier will be given the opportunity to resolve the non-conformance, which will be documented as a “soft fail” on the Source Inspection form. NOTE: This two hour window is subject to an inspection demand evaluation at time of soft fail and is not guaranteed.

If SPXQC-17 is not on the PO line for which Source Inspection has been requested, the inspection request may be rejected. If in doubt, discuss the need for Source Inspection with your Buyer.

3.3.2. During the Source Inspection Event

When the Source Inspector is onsite, the supplier is responsible for providing the following:

1. The most recent revision of the Purchase Order, engineering drawing, relevant specifications, and any associated issue tickets.

2. All documentation required by the Purchase Order, drawing, applicable specifications, and the Supplier Manual.

3. SpaceX approved and calibrated hardware, fixtures, tooling, and appropriate inspection equipment.

4. Programmable equipment reports for all parts measured on such equipment.

5. Any program, routine, or script used to generate or calculate a result (in the event of an SPX-00040457 audit)

The Source Inspector will complete the following:

Review all required documentation, including dimensional inspection reports, material certifications, NDT techniques, Certificate of Conformance, etc. All documents must be complete, accurate, and provide full tracability between all operations and processing methods.

If programmable equipment was used for inspection, the Source Inspector will select a single random part from the lot. The Inspector will observe the setup and run of the chosen part on the programmable equipment and will review the inspection report for every part in the lot. The program, routine, or script used to create any report may be subject to audit. Any features not inspected by programmable equipment will be manually inspected per the

SpaceX Source Inspection sample plan. For CMM inspection, video recording will be accepted in lieu of Source Inspection witness when the following requirements have been met:

o Parts are serialized for complete traceability; they must be accessible at any time for re-evaluation.

o CMM reports:

Must have the same serial number as the part in the video recording

Must have the same time stamp as the video recording

Must be stamped by the CMM operator

Manual dimensional inspection: The Source Inspector will inspect parts per the SpaceX sample plan (either 100% or on a sampling basis). Additionally, the Source Inspector will visually inspect all parts for damage, part marking, burrs, coating uniformity, etc. Source Inspector will inspect internal cavities using a borescope if required or if otherwise not visible via line-of-sight.

Witness of eCert submission, confirmation that the uploaded documents are legible, and that the submission has been successfully received (if feasible).

If packaging is specifically defined by the Drawing, Purchase Order, or any applicable specification, the supplier must be prepared to allow the Source Inspector to witness the packaging process and review materials used to comply with the packing requirement(s). NOTE: If packaging is the only remaining step following any special process / cleaning operation, and no additional inspection is required per the logic provided in Section 3.2.2.1, then no additional inspection is required to verify packaging as it will be verified upon arrival at SpaceX receiving.

Stamp, sign, and complete the Source Inspection Form (SIF) with inspection results. Completion of stamped blue or orange stickers for each box in the shipment.

If the supplier does not have appropriate inspection equipment for a part or feature(s), the Source Inspector will complete as much of the inspection as possible and will hard fail the event. An SRI must be submitted by the supplier to ensure the feature(s) are appropriately inspected at SpaceX.

Source Inspectors will not follow verbal or email direction from a SpaceX or supplier representative when such instruction deviates from SpaceX requirements; any deviation from the Purchase Order, drawing, specifications, or Supplier Manual must be documented via SRI.

3.4. Source Inspection Results

If documentation and hardware are accepted as a result of the Source Inspection event (or otherwise approved as a result of a SpaceX Issue Ticket (Ref. Section 3.2.2.4), the supplier is responsible for including a copy of the Source Inspection Form(s), issue ticket reports (if applicable), and all source inspector stamped documentation with their eCert submission or physical documentation package. A Source Inspection sticker will be provided for each passing shipment and shall be placed in a visible location on each shipping container.

If a Source Inspector made an error on the Source Inspection Form, the form SHALL NOT be corrected by the seller. Only Source Inspectors and Source Inspection Program Management are authorized to

correct Source Inspection Forms. Please contact SQA or SpaceX Program Management staff to request an update.

Source Inspection results may be used to determine a suppliers quality rating, or qualify a supplier for SpaceX’s Manufacturing Development Program (MDP). Consistently poor Source Inspection results may prompt a diagnostic audit or Supplier Development Engineer intervention. A record of Source Inspection results may be requested from SpaceX by emailing sourceinspectionfeedback@spacex.com.

4. REFERENCE DOCUMENTSSPX-00002162 SpaceX Source Inspection FormSPX-00000874 SpaceX Quality Clause Attachment for Purchase Orders SPX-00007672 Supplier ManualSPX-00002162 Source Inspection Form SPX-00002691 Supplier Request for Information SPX-00022791 Propulsion-Component Damage SpecificationSPX-00035277 Crew Dragon Valve Piece Parts Inspection SPX-00040165 Manufacturing Development Program ExecutionSPX-00040457 SpaceX Measurement Requirements and Guidelines

SUPPLY CHAIN MANAGEMENT Level II QMS SpaceX Proprietary - Page 13 of 14Printed documents are uncontrolled. Verify document revision with online system prior to use.

APPENDIX Figure 4: Process Flow: Determining When Source Inspection Should be Performed

SUPPLY CHAIN MANAGEMENT Level II QMS SpaceX Proprietary - Page 14 of 14Printed documents are uncontrolled. Verify document revision with online system prior to use.

5. REVISION HISTORY (CHANGES FROM LAST REVISION)Section 2 - Bill of Materials and Manufacturing Development Program definitions added. SpaceX Part Approval Process definition removed.

Section 3.2.1 - Verbiage added to support CMM Program Approval, FAI Validation, Document Transmission, Non-Conformance identification, and clarified expectations for the "inspection ready" status.

Section 3.2.2 - Clarified expectations around use of the BOM Information for Source Inspection scheduling. Figure 1 added to provide clear guidance on scheduling requirements.

Section 3.2.2.1 - Enhanced to include defined requirements for marking, masking, and plating requirements and when inspection is required for each scenario. Figure 2 and 3 added to provide clear guidance on defined dimensional limits.

Section 3.2.2.2 - Free state inspection expectation added. Threaded insert installation inspection expectations broken down and further clarified. Exception added to alodine section for threaded inserts. Guidance around dimensional limits defined by a specification added. Addressed combined inspection expectations.

Section 3.2.2.4 - Added UAI disposition instructions, addressed multiple-detail issues, and provided scheduling guidance for each scenario.

Section 3.3.1 - Scheduling request cut-off added. Issue status direction clarified.

Section 3.4 - eCert and Documentation Package submission expectations updated.

Section 5 - Created to provide insight into documentation changes