A non-conformance report records work, materials or processes that do not meet the specified requirement: the wrong concrete strength, a missed weld inspection, membrane installed contrary to the detail.
An NCR typically describes the non-conformance, its location and evidence, the proposed disposition (rework, repair, accept with concession or reject) and the close-out with verification. Patterns of NCRs are management information: repeated non-conformances in one package or trade point at a process problem, not bad luck.
Commercially, NCRs and their close-out records matter in final accounts and defect disputes, because they evidence both the problem and the fact it was put right.