1. Formation of Contract
This Agreement constitutes the terms and conditions that govern all Purchase Orders issued by AIH (the Buyer) to Seller (the Seller) for products (the Product). Any different or additional terms of Seller contained in any document whatsoever are hereby objected to and rejected by Buyer. Seller’s performance under this Agreement and/or Purchase Order shall constitute acceptance of this Agreement.
Any Purchase Order provided herein is an offer by Buyer which must be accepted by Seller without change or modification to become binding. No acknowledgement is an acceptance if it contains any terms or conditions different from, or in addition to, the provisions of the Purchase Order. In the event the Purchase Order operates as an acceptance of Seller’s offer, such acceptance is conditioned upon Seller’s assent to any terms or conditions contained therein that differ from, or are in addition to, the terms and conditions of the Seller’s offer. No modifications of the foregoing terms and conditions shall be effective unless agreed to in writing. If a Purchase Order is issued pursuant to a separately signed master agreement between AIH and Seller, the terms of such master agreement shall apply to the extent such terms and conditions are more advantageous to Buyer than the terms and conditions contained herein. A request for quote, promise of purchase, or other verbal or written inquiry regarding product should be constructed by Seller as a forecasting tool only and not a request by Buyer for product or shipment. AIH will not be held responsible for any Product produced or shipped by Seller in response to such requests, promises or inquiries.
Time is of the essence in the performance of this Agreement and all deliveries are to be made in quantities and at times specified. Delivery shall occur at the place and in the manner indicated on the face of the Purchase Order.
3.1 Early Delivery
AIH may either retain Product received in advance of requested delivery schedule or return them to the Seller at Seller’s risk and expense. If retained, payment and discount shall be based on the scheduled delivery dates.
3.2 Late Delivery
In the event Seller fails to deliver as and when specified, AIH reserves the right to cancel the Purchase Order, or any part thereof, without prejudice to any of its other rights and remedies. Seller agrees that AIH may return part or all of any shipment so made, and if the Purchase Order calls for partial shipment, the balance may be canceled or suspended. Buyer further reserves the right to charge Seller any expedited routing charges or any loss or expense sustained as a result of said failure to deliver as and when specified.
4. Handling, Preservation, and Packing
The Seller shall ensure that Products supplied are protected from damage during production, inspection, packing and shipping operations. All shipments shall be prepared in a manner that follows good commercial practice, acceptable to common shipping carriers at the lowest rate, and adequate to ensure safe arrival. Products found to be damaged upon receipt are subject to rejection and will be returned to Seller. The Purchase Order number and part number must appear on all invoices, packages, packing slips, or correspondence pertaining to the Purchase Order. All shipments shall be accompanied by an itemized packing list.
5. Changes to Purchase Orders
AIH may make any changes to open Purchase Orders at any time. If any such change causes an increase or decrease in the cost of or the time required for completion of a Purchase Order, an equitable adjustment shall be made in the Purchase Order price, the delivery schedule, or both, and the Purchase Order shall be modified in writing accordingly. In the event that Seller changes any of its Products or processes to manufacture Products delivered pursuant to a Purchase Order, Seller shall notify Buyer six (6) months before the change or as early as possible.
6. Purchase Order Cancellations
If the Buyer cancels a Purchase Order or any portion thereof, Seller shall employ reasonable efforts to mitigate any costs to Buyer.
7. Buyer Tooling
Government, Customer or AIH owned property (“Tooling”) is:
Any Tooling separately furnished to Seller by AIH is the sole property of the Buyer. Seller shall use the Tooling exclusively for the manufacture or assembly of AIH products. Seller agrees to store, protect, maintain and insure the Tooling at its cost in accordance with best commercial practices but with no less care than Seller uses in the storage of its own property of similar value.
7.1 The Supplier shall
Have a system, which includes written procedures for control of all tooling, test equipment and material. Procedures shall be in accordance with the controls specified within this Terms and Conditions.
7.2 Receiving and Identification
Each individual piece of test equipment and tooling acquired shall be marked in a permanent manner with the appropriate identification number and ownership as provided by the Buyer. If not otherwise specified, all equipment that is used to determine acceptance of material will be subject to, as a minimum, an initial inspection and calibration, and a re-inspection and re-calibration every six (6) months thereafter.
The supplier shall maintain a record of all Government/customer and AIH owned property. The list shall include:
When the property is transferred to another supplier or returned to AIH, supplier is required to maintain the records of the move for 5 years.
7.4 Physical Inventory
Seller is required to perform a physical inventory of all of the Government/customer or AIH owned property upon request from Buyer. A copy of the Seller’s inventory reconciliation must be submitted to the Buyer, unless otherwise specified.
Maintain the calibration on all the gages as shown in ISO10012-1 or ANSIZ540. Maintain, protect and preserve tooling and test equipment.
Retain all Government/customer or AIH owned property until disposition directions are received from the Buyer. Seller is required to report immediately to the Buyer any loss, theft or destruction of, or damage to, the Government/customer or AIH owned property while in its possession.
7.7 Furnished Property Provided on an “As Is” Basis
All Government/customer or AIH owned property is provided on an “as is” basis. Buyer and the Government/customer make no warranty whatsoever with respect to the property authorized for use “as is”. The seller may repair any Government/Customer or AIH property made available on an “as is” basis. Such property may be modified only with written permission of Buyer. Any repair or modification of such property furnished “as is” shall not affect the title of the Government/customer or AIH.
8. Product Specifications and Requirements
Seller shall manufacture, assemble, test, mark, package and label the Products in compliance with specifications provided by the Buyer, industry standards, and as required by applicable laws and regulations. For purchases of Products specifying manufacturers’ part numbers, substitutions are not permitted. Seller represents that they are either the manufacturer specified or an authorized distributor of the manufacturer specified for the product supplied.
9. Revision and Material Changes
The applicable revision status of specifications shall be the revision in effect on the date of the Purchase Order, unless otherwise specified. For Purchase Orders that are open longer than typical manufacturing Lead Times (e.g. Blanket Purchase Orders), specification changes that occur after issue of the Purchase Order shall be implemented within sixty (60) days.Parts on existing Purchase Orders or Long Term Agreements that are processed before the specification change are acceptable unless otherwise specified in the specification revision document. Material substitutions or any deviation are not allowed without written approval.
10. Prohibited Practices
The following acts or practices are prohibited:
10.1 Unauthorized Repair
Repairs (by welding, brazing, soldering, or the use of adhesives) of parts damaged or found faulty in the fabrication process; repairing holes in castings, forgings or other materials by plugging or bushing without authorization from Buyer.
10.2 Unauthorized Processing
Addition, revision, or deletion of thermal, chemical, or electrochemical processes in manufacturing when processes are subject to specification control by Buyer.
10.3 Improper Material Submittal
Submission of material having known defects/problems to Buyer without notification.
10.4 Improper Material Re-Submittal
Resubmission of material to Buyer without material being clearly identified as resubmitted material.
10.5 Unauthorized Material and Information Transfer
No supplier shall buy, sell, trade, or transfer AIH supplied drawings, data, material, parts, devices, assemblies or end equipment for purposes other than the performance of AIH business, without prior written approval.
10.6 Reclaimed Material
No supplier shall use reclaimed material without prior written approval from the Buyer.
11. Quality System Requirements
Seller shall provide and maintain a quality control system acceptable to Buyer and its customers for the goods and services purchased under this Agreement. Seller shall ensure personnel are aware of their effect on product and service conformity, product safety, and the importance of ethical behavior. Seller shall permit Buyer to review procedures, practices, processes and related documents to determine acceptability. The Seller shall maintain all quality, material and special process test certifications and reports for a minimum of eleven (11) years. This requirement shall be communicated by Seller to all its sub-tier suppliers.
12. General Vision Requirements
Individuals who inspect material for final acceptance must have:
Acceptable testing methods include: Pseudochromatic plates, Dvorine, Ishihara, Richmond, Farnsworth lantern, Keystone Orthoscope, Titmus vision tester, Titmus II Vision Tester, Titmus 2 Vision Tester. There are standard definitions of what is a pass/fail on these tests that should be followed.
Acceptable testing methods include: Snellen 14/18 or better, 20/25 or better, Jaeger type 1, Ortho-Rated 8 or equivalent method.
A medical professional must perform the eye examinations (eye clinic, occupational health clinic, onsite health clinic or medical department).The Individual(s) must meet the minimum standards in one eye, corrected with glasses or not corrected.
12.1 NDT Requirements
Near-Vision Eye Examination requirements for persons performing Nital / Temper Etch shall be Jaeger type 2 – 20/30 or equivalent. For Inspectors certified to the requirements of NAS410 (NDT) or Mil-STD-867 (Nital / Temper Etch), and for personnel performing visual inspection of welds, Seller may administer their own eye examinations per the standard.
13. Shelf Life Compounds Applied to Products
Seller shall maintain a documented system for identification and control of limited shelf life compounds (e.g. adhesives and paints) so that compounds that have expired shelf life are not used on product shipped to AIH.
14. Inspection and Testing
All products delivered and services performed under this Agreement are subject to inspection, surveillance and testing at all times and places, including the place of manufacture. All inspections and tests required by the drawing and procurement specifications must be performed prior to shipment to AIH. Buyer has the right to inspect/test Products and to reject all Products which, in AIH’s sole judgment, are defective or in noncompliance with specifications or drawings referenced in the Purchase Order. Seller and Seller’s subcontractors shall provide and maintain an inspection system acceptable to Buyer. Goods rejected may be returned to Seller at Seller’s expense. In addition to recovery of damages, AIH reserves the right to require replacement of such goods.
15. Foreign Object Damage (FOD)
Seller is required to maintain a Foreign Object Damage (FOD) prevention program to prevent contamination of Products during manufacturing, storing, packaging, handling and shipment. Maintenance of the work area and control of tools, parts, and material shall preclude the risk of foreign object incidents. Prior to closing inaccessible or obscured areas and compartments during assembly, the Seller shall inspect for foreign objects/materials. Tooling, jigs, fixtures, and test or handling equipment shall be maintained in a state of cleanliness and repair to prevent FOD. Potential FOD includes but is not limited to burrs, chips, dirt, corrosion and contamination resulting from the manufacturing, assembly, maintenance, processing, cleaning, storage and subsequent packaging of parts. Specific attention should be given, where applicable, to items such as:
Seller shall ensure the responsibilities of the FOD program are clearly defined and appropriate personnel have received FOD awareness training. Seller is responsible for flow down of these requirements to their sub-tier suppliers to ensure FOD free products.
Seller warrants to Buyer that each Product shall be: (a) free from defects in design, workmanship, materials and manufacture; (b) comply with all requirements of this Agreement, including specifications; (c) of merchantable quality; (d) fit for intended purposes; (e) free from all defects of title; and (f) in compliance with all applicable laws (the “Product Warranty”). The Product Warranty shall inure to the benefit of the AIH, its customers, end users and successors. Seller agrees to offer non-warranty repairs that are within its capabilities and will provide timely estimates for each non-warranty repair when requested by the Buyer. In the event that any Product is recalled by Seller, whether voluntary or as required by law, Seller shall bear all costs and expanses of such recall, including without limitation, the costs associated with notifying customers, shipping, and fulfilling obligations to third parties arising from the recall.
17. Discontinuance Notification
Seller shall provide notice to AIH in the event of discontinuance of any Products.
18. Right of Access
AIH, our customers, and regulatory authorities reserve the right to access the Seller’s facility for the purpose of audit and inspection. Reasonable notice will be given to the Seller prior to visitation. Seller shall provide notice of any proposed relocation of facilities.
19. Flow-Down of Requirements
Sellers are required to communicate requirements of the Purchase Order to sub-tier suppliers and special processors.
AIH requires Sellers to identify nonconforming product and to provide advanced notice of any changes in product definition. Seller must obtain AIH approval for nonconforming product disposition. Seller shall notify AIH in writing of any changes in certification, manufacturing location, or any other changes that may affect product quality.
21. Business Continuity
Seller shall ensure their Company has robust Business Continuity Plan (BCP) in place that includes disaster recovery and preparedness. The BCP shall detail what the Company would do in the event that key People, Processes or Technology was to become unavailable. This BCP shall be applicable, including but not limited to, natural disasters, labor disputes, lockouts, evictions, power or systems failures, hazardous spills, fire, floods, explosions, sabotage, riots, war or other civil disturbances, and voluntary or involuntary compliance with any laws, regulations, or requirements of any government authorities. The Seller’s BCP should also include planned actions to mitigate any disruptions in supply from critical sub-tiers.
22. Crisis Management
The Seller must use best efforts to notify AIH within 24hrs if they experience an incident, including but not limited to those listed in above, that may impact their ability to make their scheduled shipments to AIH.
Seller must notify AIH within 24 hours of receiving notification that any of their critical sub-tier suppliers or processors have experienced an incident, including but not limited to those listed above, that may impact their ability to provide materials or components to the Seller that are required in the manufacture or assembly of end product.
22.3 Disaster Recovery
In the event of a supply interruption, AIH may engage the Seller to collaborate on recovery. Seller is expected to fully support any such engagement until the delivery schedule to AIH is recovered.
23. Corrective Action
Acceptance of the Purchase Order obligates the Seller to perform, upon request, a corrective action investigation when discrepant material is received by AIH.
All invoices shall include the Purchase Order number, part number and shipment date. Payment of an invoice does not constitute acceptance of the product by AIH and is subject to adjustment for errors, shortages, rejects or any other failure of Seller to strictly meet all the requirements of the Purchase Order. Seller shall send all invoices to:
Arizona Industrial Hardware
6965 West Frye Road
Chandler, Arizona 85226
Attn: Accounts Payable
Seller shall indemnify, defend and hold harmless AIH and its affiliates, agents, representatives, customers, assigns and successors from and against any damages, liabilities, costs and expenses (including reasonable attorneys’ fees) arising from Seller’s breach of this Agreement, failure to comply with any applicable law, and any third party claim of injury or damage to a person or property as a result of the use of the Product or a claim that any Product infringes on any copyright or patent, misappropriates a trade secret, or otherwise violates an intellectual property right of a third party.
26. Intellectual Property
Any and all technology embodied in and related to the Product, including but not limited to design, specifications and intellectual property embodied therein, all improvements, developments, derivatives and modification thereto remain the exclusive property of AIH. Notwithstanding the foregoing, proprietary technology developed solely by the Seller and used in manufacture of Products, including all intellectual property embodied therein, shall remain the exclusive property of the Seller.
27. Confidential Information
Both parties shall keep confidential and not disclose to any third party or use for its own benefit of for the benefit of any third party, any information that should reasonably be treated as confidential or proprietary. The Seller shall limit access to Confidential Information to its employees and agents who need to know such information for carrying out the activities contemplated by this Agreement. The identity of Buyer’s customers shall be treated by Seller as Confidential Information. The foregoing obligations remain in effect after termination or expiration of this Agreement.
Seller shall maintain and carry commercial general liability insurance, which includes but is not limited to employer’s liability, workman’s compensation, general liability, public liability, property damage liability, product liability, completed operations liability and contractual liability in the amount of $1,000,000.
29. Governing Law
This Agreement shall be governed by, interpreted and enforced in accordance with the laws of the State of Arizona.
Seller shall comply with all applicable federal labor standards.