Changes in Materials or Process
Seller, and their sub-tiers, shall not make any change in any design, material or in processes used for the goods, or in any scope of work or method of performing of services without reasonable advance written notice to Buyer and Buyer’s written consent. Upon request, Seller will furnish to Buyer in advance of making any such changes such information as Buyer may request to evaluate any proposed changes. No product may be shipped prior to Buyer’s written approval.
Changes to the Purchase Order:
Buyer shall have the right to make changes in a Purchase Order, including additions to or deletions from the quantities originally ordered, by a written notice to the Seller. If such changes cause an increase or decrease in Seller’s cost of or time required for performance, Seller must notify the Buyer in writing within five (5) business days of receipt of Buyer’s change order. The parties shall promptly agree on any adjustment in the contract price or delivery schedule or both.
Seller shall treat all information furnished by Buyer in connection with any Purchase Order to be confidential and shall not disclose or use any information for any purpose other than performance under such Purchase Order without express written permission of the Buyer. Information includes, but is not limited to parts, equipment, tools, drawings, specifications, instructions or other documents.
Control of Sub-Tier Suppliers
The Seller, as the recipient of the Purchase Order, is responsible for meeting all requirements, including work performed by the Seller’s sub-tier suppliers. When the Seller uses sub-tier sources to perform work on material or parts for Buyer, Seller shall include flow-down requirements on Purchase Orders to its sub-tier suppliers, along with all of the applicable technical and quality requirements contained in Buyer’s Purchase Order. Buyer and its customers reserve the right-of-entry to sub-tier facilities, subject to proprietary considerations.
Time, quantity and accuracy of deliveries are of the essence. Seller shall immediately notify Buyer in the event that Seller’s timely performance under a Purchase Order is delayed or likely to be delayed, in whole or in part. Seller shall provide Buyer with all available information regarding the reasons for such delay. Buyer reserves the right, without liability: (a) to terminate the Purchase Order by written notice effective when received by Seller as to stated goods not yet shipped or services not yet rendered; (b) to expedite shipments at the sole cost and expense of Seller; and (c) to purchase substitute goods or services elsewhere and charge Seller with any difference between the cost of the goods or services as set forth in the Purchase Order and the cost of obtaining substitute goods or services.
If this Purchase Order is transmitted by fax or by other electronic transmission, such transmission shall have the legal significance of a duly executed original delivered to Seller.
Inspection and Rejection
Material or parts supplied by Seller shall be received subject to Buyer’s inspection and approval within a reasonable time after delivery. Payment for the material or parts shall not constitute acceptance. If specifications or requirements are not met: (a) material or parts may be returned at Seller’s expense; (b) reworked by Buyer, at Seller’s expense, to cover immediate requirements, or (d) sorted by Buyer, at Seller’s expense, to cover immediate requirements.
Unless otherwise specified, the material or parts Seller provides shall be: (a) packed, packaged, marked and otherwise prepared for shipment in a manner which is in accordance with applicable regulations; (b) acceptable to common carriers for shipment at the lowest rate for the particular goods and in accordance with applicable regulations and (c) adequate to ensure safe arrival at the named destination. Seller agrees to mark all containers with shipping information and also Purchase Order numbers, date or dates. A packing list must be enclosed in all shipments showing the Purchase Order number and exact quantity and description of the deliverables shipped.
If the Purchase Order is not priced it shall not be filled at process higher than those last quoted and charged Buyer for the same material or parts. Charges for boxing, packaging or cartage will not be allowed or paid by Buyer unless otherwise expressly stated on the Purchase Order.
Sellers Request for Nonconformance Deviation
Seller shall not knowingly ship material or parts that deviate from the drawing, specification or design intent without written authorization for the Buyer. Buyer approval of the deviation is specific to the material or parts for which it has been submitted and approved, and shall not be construed as a permanent engineering change.
Upon request, Buyer and/or their Customers may conduct source inspections or process audits at the Seller’s facilities upon reasonable notice and during normal business hours. Seller will give Buyer and/or its designee reasonable access to Seller’s facilities for this purpose at Buyer’s expense.
Buyer may terminate any Purchase Order, in whole or in part, at any time upon giving five (5) days written notice to Seller. Seller shall immediately stop all work hereunder, and shall immediately cause any of its suppliers or subcontractors to cease such work. Seller shall be paid a reasonable termination charge, consisting of a percentage of the price reflecting the percentage of work performed prior to the notice of termination, plus actual direct cost resulting from termination. Seller shall not be paid for any work done after receipt of the notice of termination, not for any cost incurred by Seller’s suppliers or subcontractors which Seller could reasonably have avoided.
Seller represents and warrants to Buyer that all material or parts and services supplies under the Purchase Order will be free from defects in material and workmanship; will conform to all applicable specifications; will be suitable for the intended purposes; and be free from all other defects whether patent or latent. Buyer’s approval of Seller’s samples or first articles shall not be construed as a waiver by Buyer of any requirements of the specifications.