Document Number: PD01
Rev Date: 7-13-17
NEURO LOGIC SYSTEMS, INC.
PURCHASE ORDER TERMS and CONDITIONS
The following terms and conditions and quality requirements are applicable to every purchase order issued by Neuro Logic Systems, Inc. (NLS) and shall remain in effect without expiration. Additional conditions may apply in accordance with our customers’ requirements as stated on the actual purchase order. Should you have any concerns or require clarification regarding the following, please contact the buyer listed on our PO.
PURCHASE ORDER AGREEMENT
INDEPENDENT CONTRACTOR: Seller is an independent contractor, and not an agent or employee of Buyer. Seller will comply with all applicable US laws and regulations including export control laws and regulations and FAR flow downs, including Counterfeit Parts Prevention, government source inspection or other US government DFAR.
PURCHASE ORDERS: Supplier shall deliver to Buyer the parts or services as stated in Supplier’s written quote, regarding part number or description of service, price and delivery date. Changes made after receipt of Buyer’s purchase order must have Buyer’s written approval. Suppliers are required to notify NLS when there is a discrepancy in piece count or other purchase order detail.
REVISION LEVEL: All processing/service associated with purchase orders must be performed in accordance with the latest specification revision and identified on all documents, unless otherwise specifically requested.
WARRANTY. All product supplied under the Order will be free from defects in material and workmanship and will conform with all requirements of the order, including specifications, drawings, samples or other description furnished by Buyer. All articles purchased are warranted to be of good material and workmanship, and to be free from defect for a period of one year (or the manufacturer’s warranty period, whichever is longer) after delivery and acceptance by Buyer. Warranties shall run to Buyer’s successors and customers.
PACKING AND SHIPMENT: Deliveries shall be as specified, without additional charge for boxing, crating, carting or storage, unless otherwise specified. Goods shall be suitably packaged in accordance with the requirements of common carriers and be packaged to ensure against damage from weather or transportation. Buyer’s Order number must be plainly marked on all packages, bills of lading, and invoices. Packing lists shall accompany each shipment listing all materials and quantities.
DELIVERY: Date of delivery shall mean the date the item is to be delivered at Buyer’s facility. On Time delivery is very important. If Seller is unable to deliver goods on the promised date, Seller shall promptly notify Buyer of the reasons for the delay and the actions being taken to minimize the delay. Buyer may request that Seller share cost of a more expeditious means of transportation.
TITLE AND RISK OF LOSS: Title shall pass to Buyer at Buyer’s destination. Acceptance and passage of title shall not impair the right of Buyer to inspect and reject any item. Seller shall assume and bear the risk of any loss of, or damage to, the supplies covered until delivered at the Buyer’s destination, and for all rejected items after notice of rejection.
PAYMENT: Payment date will be calculated from the date of Buyer’s receipt of an acceptable invoice or Buyer’s acceptance of the goods and supporting documentation at destination, whichever occurs last.
SUBSTITUTION OF PARTS: Seller will not substitute any part on Buyer’s purchase order without Buyer’s written approval. This includes replacement, upgraded or substituted parts that Seller may consider equal to unavailable part, even if Seller’s part number remains the same. All such substitutions must be approved by Buyer in writing.
REQUIRED NOTIFICATIONS:
1. OBSOLETE or EOL PARTS: In the event a component is no longer to be stocked or manufactured as part of Seller’s regular product line, Seller shall notify Buyer in writing of any pending future action as soon as Seller has made such decision.
2. CHANGES IN PRODUCT: Any changes to the design, components and/or process of manufacturing the purchased part, including changes of suppliers, changes of manufacturing facility location.
3. FLOW DOWN TO THE SUPPLY CHAIN: If required by government contract, the applicable requirements will be flowed down to supplier’s own vendors.
WRITINGS REQUIRED: No order, change order, direction, requirement, consent or approval will be valid unless provided in writing. No oral statements will modify or affect the terms of the Order. No extra charge of any kind, or change in the price or delivery schedule of the Order will be allowed unless specifically agreed to in writing by Buyer’s Authorized Representative.
PROPRIETARY INFORMATION: Seller shall not divulge to anyone any of Buyer’s confidential or proprietary information, whether such information was provided verbally or in drawings, designs, specifications, technical information, tools, data or any other form.
PRODUCT HANDLING and TRACEABILITY
HANDLING: Product must be handled, stored and packaged to prevent damage or deterioration of product appropriate to the current state of manufacture.
INSPECTION AT SOURCE: Supplier must inspect all product and test electronic components to ensure all shipped product meets Supplier’s and Buyer’s product and quality requirements. Nonconforming product will not be accepted.
TRACEABILITY: All products/components must be traceable to OEM/OCM or their authorized distributors.
Certificates of Conformance or Process Certifications must identify the Part Number, Revision or Issue, Purchase Order Number, Quantity, Serial Numbers (if applicable), NLS Job or Lot Number, all relevant Specifications with Revisions and Material Heat Number when known; identify the name, title, date and signature of the issuer.
SUB-TIER CONTROLS: You are required to flow down all applicable purchase order requirements, including NLS’s customer requirements, to your sub-tier suppliers when applicable, including all counterfeit parts prevention requirements. Sub-tier suppliers must be able to provide written documentation of traceability to OEM/OCM or their authorized distributors. NLS must have previous knowledge and approval of all (sub-tier) suppliers used for our product.
CHANGES TO SUB-TIER SUPPLIERS: Must be approved by NLS if product is designed by or modified for NLS.
APPROVED PROCESS SUPPLIERS: You have been delegated the authority to process and inspect your product to ensure all applicable process and material specifications are met and documented accordingly. You are further required, upon request, to demonstrate and provide evidence that your processes meet planned results and that arrangements have been established for the processes, including:
- Defined criteria for review and approval of the processes (qualification and approval of special processes prior to use)
- Approval of equipment and qualification of personnel
- Use of specific methods and procedures (control of the significant operations and parameters of special processes in accordance with documented process specifications and changes)
- Requirement for records
- Revalidation
DOCUMENTATION: When required by contract, Seller must provide with each shipment documented proof of processing (process certification, MIL testing report, physical and/or chemical test result, etc.) traceable to purchase order details.
RECORDS: Suppliers are required to retain quality and process records such as certifications and test reports relating to NLS product, for a minimum of 7 years. After that time, records may be disposed of by shredding only. Records forwarded with shipments (Certificates of Conformance, etc.) must be maintained and protect from deterioration and damage and made available for review by request of NLS, our customers and regulatory authorities in accordance with contract or regulatory requirements.
QUALITY REQUIREMENTS
QUALITY CONTROL: Supplier shall maintain a quality control system in accordance with ISO9001 (or a more current update) for the goods or services purchased under the Order. Supplier shall have a continuing obligation to promptly notify Buyer of any nonconforming product as result of your process/service. Nonconforming product must not be further processed or delivered without written authorization by Buyer. Immediate notification must be made of any process or product discrepancy and any known or suspected violation or deviation from the quality control system and to identify any goods delivered to Buyer that may be affected.
QMS REQUIREMENT – Approved Process Suppliers must meet the minimum quality management controls for the product or service provided and associated risk:
Special Processors: NADCAP and/or (our) Customer Approval
Machining Suppliers: Neuro Logic Systems’ QMS review (preferred ISO, may use 100% Inspection)
Material Suppliers: ISO9001 and/or BAA and/or (our) Customer Approval
and/or AS6174 and/or Consumer Protection Act HR4173, Section 1502
PROCESS CHANGES: Suppliers are required to notify NLS of changes in product and/or process, changes of supplier, changes of manufacturing facility location and, where required, obtain NLS approval prior to actions.
CALIBRATION SOURCES: Sellers must comply with the requirements of ISO 17025 or equivalent. All certificate(s) of calibration must reflect compliance.
CUSTOMER PROPERTY: Sub-Contractors who receive NLS parts in order to provide special processes or other service shall have a quality control procedure in place to prevent cosmetic or functional damage to NLS property during handling. Subcontractors will handle NLS property carefully, and return it to NLS without any defects in appearance or performance.
ENVIRONMENTAL POLICY: NLS believes it has an important duty to ensure good environmental performance in all its business operations and to provide the necessary commitment and training to fulfil this obligation. We expect our suppliers to share in this commitment to monitoring and improving environmental performance, pollution prevention and environmental protection, and to expect the same throughout their supply chain.
FLOW DOWNS
CONFLICT MINERALS POLICY: NLS supports our customers in their obligations of the Dodd-Frank Wall Street Reform and Consumer protection Act Section 1502 pertaining to conflict minerals disclosure regulations. We rely on suppliers to provide information on their supply sources, and comply with customers’ requests to disclose information they may need to meet their own reporting obligations.
FOREIGN MATERIAL SOURCE: Raw material may only be procured from known and reliable sources inside the USA or Canada and/or countries listed on the Bilateral Airworthiness Agreement (BAA) to ensure no foreign/counterfeit materials or conflict minerals enter the supply chain.
RIGHT OF ENTRY: If required by US government contract, supplier will comply with the right of access by Neuro Logic Systems, our customer and/or regulatory authorities to the applicable areas and all applicable records of all facilities, and those of your sub-tiers involved in the fulfillment of this order and applicable records to ensure compliance with all applicable specifications and laws.
FARS/DFARS: SELLER shall comply with any Federal Acquisition Regulations (FARS) and Defense Federal Acquisition Regulations(DFARS) specifically cited as a flowdown requirement in theBUYER’s Purchase Order. SELLER agrees to flowdown FAR/DFARSclauses to all parts of its supply chain, as applicable.
COMBATING TRAFFICKING IN PERSONS POLICY: The US Government requires all suppliers and their subcontractors to prohibit their employees from engaging in trafficking of persons in any form: forced labor, procuring a commercial sex act, denying access to identity or immigration documents, fraudulent practices during recruitment. NLS and all our suppliers are obligated to report any suspected trafficking activities without reprisal.
COUNTERFEIT PARTS PREVENTION AND NOTIFICATION:
Due to the serious concerns about counterfeit parts getting into production lines, our military and commercial customers entrust us with procuring parts that meet the standards of AS5553 and DFARS 252.246-7007. You can find these requirements in full online.
- Acceptance of this Contract constitutes confirmation by the seller that it is the Original Equipment Manufacturer (OEM)/Original Component Manufacturer (OCM), or a franchised or authorized distributor of the OEM/OCM for the product herein procured.
- Seller represents and warrants that only new and authentic materials are used in products required to be delivered to NLS and that the work delivered contains no Counterfeit Parts.
- Seller shall only purchase authentic parts/components directly from the OEMs/OCMs or through the OEM’s/OCM’s authorized distributor. Seller must make available to NLS, at NLS’ request, OEM/OCM documentation that authenticates traceability of the components to that applicable OEM/OCM.
- Purchase of parts/components from Independent Distributors (brokers) is not authorized.
- Seller shall maintain a documented Counterfeit Parts Prevention system (policy, procedure, or other documented approach) that is consistent with industry standards, AS5553 as minimum, or DFARS 252.246-7007 including policies and procedures for training personnel, designing and maintaining systems to mitigate risks associated with parts obsolescence, making sourcing decisions, prioritizing mission critical and sensitive components, ensuring traceability of parts, developing lists of trusted and non-trusted suppliers, flowing down requirements to subcontractors, inspecting and testing parts, reporting and quarantining Suspect Counterfeit Electronic Parts and Counterfeit Electronic Parts, and taking corrective action.
- Seller further warrants that OEM/OCM acquisition documentation that authenticates traceability of the components to that applicable OEM/OCM is available upon request. The seller shall retain source documentation as a quality record for 5 years.
- Seller shall flow the requirements of this provision to its subcontractors and suppliers at any tier for the performance of this Contract.
- Notifications: Should seller become aware of a Counterfeit Part or Suspect Counterfeit Part that, by any means, has been delivered to NLS, or acquired for this Contract whether or not delivered to NLS, seller shall notify NLS as soon as possible but not later than 7 days of discovery. Seller will verify receipt of this notification by NLS. This requirement will survive this Contract.
- Seller shall be liable for cost of Counterfeit Parts and Suspect Counterfeit Parts and the cost of rework or corrective action that may be required to remedy the use or inclusion of such parts.
- Seller shall quarantine Suspect Counterfeit Electronic Parts and Counterfeit Electronic Parts, and make them available for investigation by appropriate government authorities. Suspect Counterfeit Electronic Parts and Counterfeit Electronic Parts shall not be returned to the supply chain unless and until such time that the parts are determined to be authentic.
