KIMBERLY MACHINE INC.
TERMS AND CONDITIONS OF PURCHASE
(TCP Rev. D)
A. THE TERMS & CONDITIONS IN THIS SECTION APPLY TO ALL PURCHASES
1. ACCEPTANCE: This order shall be deemed acceptable by Seller and shall constitute the exclusive agreement between the parties upon any of the following (a) Seller’s acknowledgement of the order, (b) Seller’s commencement of performance, or (c) Sellers acceptance of any payment under this order. No terms or conditions other than those set forth in this order shall bind Buyer Co., Inc., hereinafter referred to as “Buyer” unless accepted in writing even though such other terms or conditions do not materially alter this order.
2. BUYER FURNISHED PROPERTY: Unless otherwise expressly provided in this contract, all property furnished to Seller by Buyer for use in Seller’s performance here-under shall remain the exclusive property of Buyer. For purposes of this contract, the term “property” includes without limitation, dies, fixtures, gages, test equipment, or similar items of special tooling used in Seller’s performance of this contract that are of such specialized nature that absent substantial alteration, their use is limited to the production of the goods or the rendering of the services referenced on the order. The term “property” also includes all designs, processes, drawings, specifications, reports, data and other technical or proprietary information and the features of all parts, equipment, tools, gauges and patterns furnished or disclosed to Seller by Buyer in connection with this order, and Seller hereby agrees to keep all such information confidential. Seller shall not sell, encumber, transfer, assign, dispose of or modify Buyer’s property and shall not use Buyer’s property for any purpose other than in the performance of this contract without Buyer’s prior written consent. Any property supplied to Seller will be returned in as good condition as when received, except for reasonable wear or tear or for use of property in accordance with the provisions hereof. Seller agrees that while Buyer’s property is in its possession or control, it shall be maintained in good condition and fully covered by insurance at Seller’s expense. Buyer’s property shall be segregated by the Seller in the Seller’s plant and wherever possible clearly marked so as to be easily identified as the Buyer’s property. In the event that Buyer’s property is damaged or destroyed while in Seller’s possession, Seller shall repair or replace such property at its expense. Seller agrees that Buyer’s property shall remain personalty and shall not become a fixture attached to realty. Seller shall allow Buyer’s representative to inspect Buyer’s property upon Seller’s premises at any time upon reasonable notice. At the termination of this contract or at any time upon the request of Buyer, Seller shall deliver Buyer’s property to the Buyer, F.O.B. Seller’s business location, packaged in a manner suitable for shipment by common carrier, such packaging to be at Seller’s cost. The provisions of this section shall survive the completion of performance of this contract and remain in full force until all items are delivered to Buyer or otherwise disposed of with Buyer’s written consent.
3. CHANGES: Buyer shall have the right to make changes in this order, but no additional charge by Seller will be allowed unless authorized in writing by Buyer. If such changes affect Seller’s contract price or delivery schedule, Seller shall notify Buyer immediately and within 30 days of such notice shall submit a detailed cost breakdown comparing original requirements and costs to the changed requirement and costs. The parties will then negotiate and equitable adjustment in contract price, delivery schedule or both. However, nothing in this clause shall excuse Seller from proceeding with this order as changed.
4. DELIVERY: Time is of the essence in this contract. If Seller’s delivery of the purchased goods or services is not made in the quantities and at the times specified herein, Buyer reserves the right without liability and in addition to any other rights and remedies, to terminate this contract and to procure substitute goods or services and charge Seller with any loss incurred including lost profits and special damages. Seller is authorized and expected to ship goods or services and to have on Buyer’s dock by the due date specified on this contract. Neither party shall be liable for delays or defaults due to causes beyond its control and without its fault or negligence, provided that when Seller has reason to believe that performance will not be made as scheduled, written notice setting forth the cause if the anticipated delay is immediately given to Buyer. If Seller’s delay or default is caused by a delay or default of a sub-contractor or supplier, such delay or default shall be excused only if it arose out of causes beyond the control of both Seller and the subcontractor or supplier and without the fault or negligence of either of them and the goods or services were not obtainable from other sources in sufficient time to meet the required delivery or performance schedule. The Seller shall notify the Buyer as soon as it has been determined that Seller is not able to ship as specified.
5. QUALITY SYSTEM: Supplier shall maintain a quality and inspection system which is compliant with the requirements of ISO9001/AS9100 and all other terms of this Purchase Order in the manufacture and / or delivery of the materials or services stated within this order. The applicable scope of work shall be determined by the Supplier Capabilities Survey (FORM-PUR-001).
6. ENTRY, AUDIT AND INSPECTION: Seller agrees that its plant, books and records so far as they relate to the performance of this or a related order, or costs incurred under this or a related order (to the extent consistent with laws and regulations), shall at all practical times be subject to review, inspection and audit by any authorized representative of the Buyer, any authorized representative of the Buyer’s customer, and, in the event that this order is placed under a government contract, any authorized representative of the United States Government shall also have the same rights of entry, audit and inspection as provided herein. This requirement must be flowed to any supplier at any level of the supply chain.
7. INSPECTION: All Materials of articles ordered may be subject to (i) inspection during the period of manufacture (ii) inspection prior to shipment and (iii) final inspection and acceptance at destination notwithstanding any prior payment or inspection and acceptance. Buyer may reject and hold at Seller’s expense, subject to Seller’s disposal, all materials or articles not conforming to applicable drawings, specifications and (or) samples. Seller agrees to replace at its expense or, at Buyer’s option, to refund the price of any article which fails to meet the requirements of applicable drawings, specifications and (or) samples. Materials or articles rejected and returned to Seller shall not be retendered by Seller to Buyer unless notification of that fact is submitted with the retender and Buyer specifically agrees to acceptance thereof. All materials or articles ordered maybe subject to Government source inspection, if applicable. Final inspection and acceptance by Buyer (and, if applicable, the Government) of any materials or articles delivered hereunder shall not be conclusive as to latent defects, fraud, such gross mistakes as to amount to fraud, or Seller’s warranty obligations hereunder. During performance of this order, Seller shall maintain a Quality Control/inspection systems acceptable to Buyer. The system is subject to review, verification, and analysis by authorized Buyer and/or Government representatives. All process work must be performed by sources approved by Buyer, Buyer’s customer or by the cognizant military service, as applicable.
8. NOTIFICATION OF NONCONFORMING PRODUCT: The Seller shall immediately notify Buyer when it is suspected or known that nonconforming material has been produced or delivered. The notification must include a clear description of the actual or suspected nonconformance and obtain organization approval for nonconforming product disposition.
9. CHANGES IN PRODUCT, PROCESSES, SELLERS AND MANUFACTURING LOCATION: The Seller shall notify Buyer of any changes in product or process definition, Sellers, or location of the manufacturing facility and obtain Buyer’s approval.
10. USE OF CUSTOMER APPROVED SPECIAL PROCESS SOURCES: The Seller shall use and direct sub-tier Sellers to use Buyer or Buyer’s customer’s designated Sellers as instructed on Buyer’s purchase order.
11. RECORD RETENTION: As a minimum, all Quality Records (Training, C of C’s, Calibration, FAI’s, Machine Maintenance, etc.) shall be maintained for a period of 15 years and available for review upon request. At the end of this 15-year period, the supplier shall contact the organization for disposition of all records. At the end of retention, records shall be destroyed by shredding the documents.
12. HAZARDOUS MATERIAL: The Seller shall furnish applicable Material Safety Data Sheets for products designated by industry, state, or federal agencies as hazardous materials.
13. PROPRIETARY INFORMATION: All information disclosed or furnished by Buyer to Seller under this order, regardless of form or format, and including but not limited to, designs, processes, drawings, specifications, reports, data (including CADCAM data) trade secrets, software, know-how and other technical or business information, and the features of all parts, equipment, tools, gauges, patterns, and other items furnished or disclosed to Seller by Buyer and all information created, developed or made by Seller in performance of this order, is and shall be treated by Seller as proprietary information of Buyer. Unless otherwise provided or authorized by Buyer in writing, Seller shall hold all proprietary information in confidence, and shall use proprietary information only in the performance of this order. Seller shall not use or disclose proprietary information to, or for the benefit of, any third part nor shall Seller sell or otherwise dispose of as scrap or otherwise any completed or partially completed or nonconforming products (or parts thereof) without destroying or rendering such products (or parts) unsuitable for use, and without removing or destroying any proprietary information embodied therein.
14. FOREIGN OBJECT DAMAGE: The Seller shall maintain a Foreign Object Elimination (FOE) program assuring work is accomplished in a manner preventing foreign objects or materials from entering and remaining in deliverable items. Seller shall provide FOE program training to employees performing operations on Foreign Object Damage (FOD) sensitive products, maintenance of the work area and control of tools, parts, and material to mitigate the risks of FOD incidents. Tooling, jigs, fixtures, and test or handling equipment shall be maintained in a state of cleanliness and repair to prevent FOD.
15. FOREIGN MATERIAL REQUIREMENTS: In support of this contract, the supplier is required to comply with DFARS clause 252.225-7014 ALT 1 “Preference for Domestic Specialty Metals”.
16. COUNTERFEIT PART PREVENTION PROGRAM: The supplier shall establish and maintain a Counterfeit Parts Prevention and Control Plan using Industry Standard AS6174 as a guideline. The purpose of this document shall be to prevent delivery of counterfeit parts and control parts identified as counterfeit. The supplier and sub-tier suppliers agrees and shall ensure that Counterfeit work is not delivered to Kimberly Machine. The supplier shall immediately notify Kimberly Machine with the pertinent facts if the Supplier becomes aware or suspects that it has furnished Counterfeit work. If in the event that Kimberly Machine Inc. receives Counterfeit material, material will be scrapped on site per Kimberly’s expense.
17. COMPLIANCE WITH U.S. EXPORT LAWS: Seller shall maintain procedures to prevent the disclosure of technical data and products in this purchase order in written, oral, or visual form to any foreign national without prior export authorization from Buyer Inc., or Buyer’ customer or the U.S. Department of State (Reference: 15 CFR Part 730-774; Export Administration Regulations (EAR) & 22 CFR Part 120-130, International Traffic in Arms Regulations (ITAR).
18. FLOW DOWN REQUIREMENTS: The Seller shall flow down to the sub-tier Sellers all requirements of the order, including these quality clauses.
19. PACKING: All articles shipped under this order are to be packaged in a manner that will provide for efficient handling and will preclude damage to the articles during shipping and/or storage. Damage to any article resulting from improper packaging will be charged to the Seller. No additional charges will be allowed for boxing, packing, returnable containers, or transportation thereof, unless stated on the face of this order.
20. PACKING SLIPS: Packing slips must accompany all shipments. The Buyer’s count will be accepted as final and conclusive on all shipments not accompanied by packing slips. The buyer’s order number and seller’s packing slip number, description and count must appear on all invoices, packages, and bills of lading.
21. SPECIFICATION: All articles ordered to Buyer’s or Government’s specifications must comply with such specifications current as of the date of this order unless otherwise specified by Buyer. Any manufacturing or other specifications referred to in this order are hereby made a part hereof, as if fully set forth herein.
22. WAIVER: Buyer’s failure to insist upon the performance of any term or condition of this contract or to exercise any right hereunder on one or more occasions shall not constitute a waiver of relinquishment of Buyer’s right to demand future performance of such item or condition or to exercise such right in the future.
23. WARRANTIES: Seller hereby warrants that all goods and services covered by this contract will conform with Buyer’s instructions, specifications, drawings and data will be merchantable, will be free from defective material or workmanship and will be fit for buyer’s purposes. Seller further warrants that the goods and services furnished under this contract shall conform to all representations, affirmations, promises, descriptions, samples or models forming the basis of this contract. Seller agrees that these warranties shall survive acceptance of the goods and services. Seller further warrants that all services performed for or on behalf of Buyer will be performed in a competent workmanlike manner and shell be free from fault, and any warranties of additional scope given by Seller to Buyer shall apply None of said warranties and no other implied or express warranties shall be deemed disclaimed or excluded unless evidenced by a purchase order change notice or revision issued and signed by Buyer. The warranties hereunder shall inure to the benefit of Buyer, its successors and assigns, customers, and users of its products. If there is a breach of warranty, Buyer may remove the product from any component assembly or system into which the product may have been incorporated and return such product, at Seller’s expense for correction, replacement, or credit as buyer may elect.
B. THE TERMS & CONDITIONS IN THIS SECTION ARE SPECIFIC TO THE COMMODITY PURCHASED
1. SPECIAL PROCESSES: Processing certifications shall be in conformance with the latest specification revision unless otherwise specified on our purchase order. Sellers that perform special process fabrication processes such as heat treating, coating, and plating shall obtain NADCAP certification. In lieu of NADCAP certification, Seller must be approved by Buyer. A Certificate of Conformance and/or equivalent Process Certificate is required with shipping documentation as follows:
a. Purchase Order Number
b. Part Number including revision level
c. Serial and/or lot number(s) (as applicable)
d. Process specification number and revision level
e. Processing date
f. Name & address of the processor(s) performing each process
g. A certification statement that the special process was performed per the applicable drawing/specification requirements
2. RAW MATERIALS: The Seller shall include with each shipment a certificate of conformance that states that the raw materials provided was tested, inspected, and found to be in compliance with all applicable parts and material specifications. The certificate will include the following information:
a. Name and address of Seller
b. Purchase Order Number
c. Part Number including revision level
d. Serial and/or lot number(s) (as applicable)
e. Raw material specification number and revision level
f. Raw material heat/lot batch number
g. Name of the raw material manufacturer
The Certificate of Conformance will be signed, with title, and dated by authorized Seller representative. A mill test report that complies with the requirements below must also be provided:
a. List of specifications, including revision numbers or letters to which the material has been tested and/or inspected and the identification of the material lot to which it applies.
b. When the material specification requires quantitative limits for chemical, mechanical, or physical properties, the test report will contain the actual test and/or inspection values obtained. For aluminum mill products (except castings), certifications for chemistry may indicate compliance within the allowed range. Certifications for physical properties will show actual values.
c. If converted material produced by a raw material manufacturer is supplied, the Seller is responsible for ensuring performance of all physical tests where the manufacturing process has altered the properties from what had been certified by the raw material manufacturer. The data submitted must reflect the condition of the material
d. Shall be domestic or DFARS 252.225-7014 compliant.
3. MONITORING & MEASURING EQUIPMENT: Contractors performing calibration services for Buyer shall use equipment, which has been calibrated and maintained using standards traceable to the National Institute of Standards and Technology (NIST) in accordance with the latest revision of ANSI / NCSL Z540-3, ISO10012-1, ISO 17025 or equivalent. Calibration certifications for equipment shall contain the following information as a minimum:
a. Equipment description and identification (model / serial number)
b. Equipment size / range and rated accuracy
c. As received / found conditions
d. Date calibration performed
e. Calibration due date
f. Serial number of standards used traceable to NIST
g. Identification of personnel performing calibration
h. Applicable environmental conditions
i. Measuring and test equipment shall be packed to prevent damage in shipment or storage.
4. MATERIAL SAFETY DATA SHEET: Seller shall submit a Material Safety Data Sheet with the shipment.
5. 100% INSPECTION: The Seller shall submit (1) reproducible copy of all inspection documentation, stamped by the responsible quality inspector, showing 100% inspection for all attributes noted on the drawings, for all parts submitted. Inspection documentation shall include serial numbers and/or lot codes, if applicable.
6. 100% INSPECTION-CRITICAL CHARACTERISTICS: Seller shall perform 100% inspection of critical characteristics identified in the drawing or specification. Seller shall submit a Certificate of Conformance with each shipment attesting that all critical characteristics have been verified to meet the requirements of the engineering document(s). The certification shall contain as a minimum:
a. Name and address of Seller
b. Purchase Order Number
c. Part Number including revision level
d. Serial and/or lot number(s) (as applicable)
e. Quantity
f. Listing of critical characteristics verified
7. RADIOGRAPHIC INSPECTIONS: Seller shall submit radiographic inspection results (associated films, test reports, actual values) of each item defined in the purchase order. The results shall be accompanied by a radiographic control document identifying the areas inspected, image views, and orientation to allow precise film interpretation with appropriate traceability to the items.
8. LIMITED LIFE & AGE CONTROL ITEMS: Items with limited shelf life require submittal of a Certificate which includes the following information as a minimum:
a. Name and address of Seller
b. Purchase Order Number
c. Part Number including revision level
d. Manufacturer’s name (if not Seller)
e. Lot, heat, batch, date code, and/or serial number (as applicable)
f. Date of manufacture
g. Date of shipment from manufacturer
h. Upon shipment, the remaining shelf life of the item shall meet the minimum shelf life specified in Buyer’ purchase order. If no minimum is specified, 75% of the shelf life shall be remaining on the item. Seller shall identify each item on the part itself, or the interior or exterior of the packaging in compliance with the specification
9. PERSONNEL QUALIFICATIONS: The supplier’s Quality System shall assure all relevant Purchase Order requirements are met and all applicable processes affecting the final quality of the product in the Purchase Order were rendered by qualified personnel. NDT personnel shall be certified IAW NAS410.
10. SUPPLIER PERFORMANCE: It is the expectation of this organization that the performance of our suppliers maintains (at a minimum) On-Time Delivery >90% and Product Quality >90%. Failure to meet these requirements will result in corrective action and / or disqualification from future orders.
11. CONTRIBUTION AWARENESS: Suppliers provided products and services are expected to conform to the requirements explained in each purchase order description and these Quality Clauses, handling of components shall ensure that product safety is a top priority to prevent damage to parts and ethical behavior shall include (but not limited to) no favoritism, no gifts in exchange for work, no inappropriate exchange of information and the immediate notification when unethical behavior occurs.