TERMS AND CONDITIONS FOR SUPPLIERS

REVISED 8/8/2018

DEFINITIONS:

PMC refers to Prieto Machine Company, Inc.

Supplier refers to the entity that is receiving the Purchase Order and fulfilling the actual Purchase Order. The Supplier may be a Distributor, Manufacturer, Producer, Retailer, Provider of a Service or Information, or any other entity empowered to sell the goods or services contracted by the Purchase Order.

Authorized Purchasing Agent refers to the PMC representative whose initials appear on the Purchase Order.

ACCEPTANCE OF CONTRACT/TERMS AND CONDITIONS: Supplier’s acknowledgement, acceptance of payment, or commencement of performance shall constitute Supplier’s unqualified acceptance of PMC Terms and Conditions. Failure to meet terms and conditions of Purchase Order may result in delayed payment of invoice, cancellation of order, return of merchandise at Supplier’s expense, or reduction in future orders. Supplier is required to flow down to sub-tier Suppliers all applicable requirements of this Purchase Order, including key characteristics where required.

RIGHT OF ACCESS: Acceptance of this Purchase Order by the Supplier grants representatives from PMC, PMC’s customers (only if needed or authorized by PMC), and regulatory agencies the right of entry to the Supplier’s premises and right of access to Supplier’s records for the purpose of verifying that purchased materials or processes conform to specified requirements.

COMPLIANCE WITH LAWS AND REGULATIONS: Supplier warrants that he has been duly authorized to do business in the jurisdiction in which the work is to be performed; that he has obtained at no cost to PMC or PMC’s customer(s) all necessary and required licenses and permits required in connection this Purchase Order, and that he will comply fully with all pertinent laws, decrees, regulations, and labor standards of such country or countries during the performance of this Purchase Order.

QUALITY SYSTEM: The Supplier must maintain a documented Quality System (manual). This documented Quality System must include provisions for the Supplier to manage the competence, awareness, and training of all personnel. PMC reserves the right to request evidence of a documented quality system of the Supplier and applicable sub-tier Suppliers.

WORKMANSHIP: All components must be manufactured, inspected, and tested in a documented and controlled process. Objective evidence of workmanship instructions, Inspection records, and training records shall be retained and available by the supplier for PMC review upon request. Where applicable, statistical methods for product acceptance may be used should the supplier demonstrate appropriate justification for these methods. Special Instructions for product acceptance, Special requirements, critical items, or key characteristics will be stated on the purchase order where appropriate.

PRESERVATION OF PRODUCT: All product must be handled and packaged in a manner to prevent damage. The weight of any individual box delivered to PMC must not exceed 40 lbs. regardless of delivery method. PMC reserves the right to refuse product due to shipping and handling damage caused while in the supplier’s control or during transport to PMC’s facility.  

PRODUCTION PROCESS VERIFICATION: When specified on the Purchase Order, Supplier shall provide a copy of the First Article Inspection compliant to AS9102. Documentation to be provided with shipment is as follows: AS9102 compliant Form 1 with approval, Form 2 with all material certificates, form 3 including any testing and inspection data performed with accompanying balloon drawing. Should First Article Inspection be required to be approved by PMC prior to shipment, this requirement will be clearly stated on the Purchase Order.

DESIGNATED SOURCES: When Sources or Special Processes are defined on the Purchase Order, suppliers shall use PMC designated sources, including process sources. Evidence of source and/or special process supplied shall accompany product with shipment. Failure to comply with the Purchase Order may cause product or process to be rejected at the dock and returned to the Supplier freight collect.

FOREIGN OBJECT DEBRIS (FOD) PROGRAM: Suppliers shall have procedure implemented to prevent foreign objects or material in purchased components. PMC suppliers shall maintain handling, in process protection, housekeeping, work area accountability, parts, and byproducts in a manner to prevent the risk of FOD occurrences. The suppliers FOD Program shall be subject to audit and to PMC or their customers review and approval.

SUBSTITUTIONS: No substitutions allowed whatsoever. The product shipped to PMC must exactly match those shown on the PMC Purchase Order. To ship an alternate or “better than” product, a Supplier must receive prior written authorization from PMC (formal change order to the Purchase Order). Product deviations from the Purchase Order may be rejected at the dock and returned to the Supplier freight collect.

SHELF LIFE: In cases of materials with expiration dates, at least 85% of shelf life is required upon delivery unless otherwise agreed upon or specified.

NONCONFORMANCE OF PRODUCT: If at any time Supplier becomes aware that shipped material is nonconforming product, Supplier must immediately notify buyer to negotiate arrangements for disposition. PMC does not accept nonconforming material, and no oral agreement or action of any kind may alter this provision without specific written agreement by PMC.

COUNTERFEIT MATERIAL AVOIDANCE: Suppliers shall maintain a counterfeit material avoidance and mitigation process using AS5553 as a guide and be able to produce for review by PMC. If supplier does find counterfeit components in the process of supplying components to PMC, supplier will immediately notify PMC. Supplier shall purchase components directly from OEM, OCM, or from authorized distributors and have traceability records, test data to support documentation. Suppliers are not authorized to deliver any components from any other than those noted above without written consent from PMC.

CHANGE IN PRODUCT AND/OR PROCESSES: Any change in the product and/or process definition and/or site of manufacture must be made known in advance of shipment to PMC for authorization/approval. (Also includes changes in ownership, change in quality control procedure,)

OVER SHIPMENTS: Over shipments of up to 5% of the quantity specified on the Purchase Order will be accepted by PMC without written formal written consent from PMC. Any over shipment that exceeds 5% of the specified quantity will require authorization from PMC through a change to the Purchase Order or a written confirmation. The quantity set forth in the Purchase Order is the contract quantity. Without authorization, the additional overage portion of your shipment may be returned to you freight collect which will require you to re-deliver/re-invoice consistent with the quantity or pricing specified in the Purchase Order.

UNDER SHIPMENTS: Exact quantity on Purchase Order is required. No under shipments allowed. If quantity cannot be met, then PMC must be notified in writing prior to order fulfillment. This notification must include the cause for the quantity discrepancy. PMC will choose at that time whether to allow the Purchase Order to be amended to reflect the new approved quantity or whether the Purchase Order needs to be cancelled.

PARTIAL SHIPMENTS: Partial shipments may be authorized if PMC is contacted by the Supplier prior to shipment and subject to PMC’s agreement that a partial order will be allowed. Partial shipments are only authorized in cases where the Supplier gives a verified Purchase Order fulfillment date to PMC. If the Partial Shipment is not fulfilled by the verified Purchase Order fulfillment date, the PMC reserves the right to return the already delivered product at the Supplier’s expense for a full refund. Partial shipments are never allowed in cases where the Purchase Order states that “Partial shipments will not be accepted”.

SUPPLIER REQUIREMENT TO NOTIFY BUYER: Supplier shall immediately notify PMC in writing whenever a verbal or written change request has been received from a representative of PMC other than the Authorized Purchasing Agent. This includes any change request that affects any aspect of the current Purchase Order including – but not limited to − existing terms and conditions, costs, items ordered, specifications on the items ordered, or schedule of delivery. Only the Authorized Purchasing Agent has the authority to make a change to the Purchase Order via a formal change order.

IDENTIFICATION AND TRACEABILITY: PMC requires that all purchased products – including raw materials and packaging – are clearly identified by part number, trade name, or chemical name – and that lot numbers and/or batch numbers are clearly designated on the delivery paperwork. Date of Manufacture and Shelf Life/Expiration Date must also be clearly labeled on all products that have a shelf life as well as on corresponding paperwork.

DELIVERY PAPERWORK: Delivery paperwork at a minimum must include a packing slip and any other paperwork designated on the Purchase Order. All raw materials must be accompanied by a written Certificate of Analysis and Material Safety Data Sheet regardless of whether the Purchase Order specifies these documents. All written paperwork must be received in order for a Purchase Order to be considered fulfilled. Failure to submit required paperwork – i.e. MSDS, CoA – to PMC within 24 hours of delivery may result in payment being held. If such paperwork does not exist, a written statement must be supplied to that effect with each order and sent via fax or e-mail to PMC or attached with the packaging paperwork. PMC may return products at the Supplier’s cost if acceptable required documentation is not received within 3 business days after delivery. Failure to provide the required paperwork will jeopardize the Supplier’s performance rating.

CERTIFICATE OF CONFORMANCE: PMC suppliers shall include a Certificate of Conformance with each shipment. The certificate shall contain at a minimum the following, if applicable;

1. Original manufacturers and distributers name and address
2. PMC PO number, line item and revision
3. Part number, revision and quantity
4. Drawing or specification number and revision
5. Serial numbers, date codes, or batch number
6. Statement of conformance to requirements
7. Authorized agent's signature, title and date

TIME OF THE ESSENCE; NO WAIVER: Time is of the essence with respect to every term and condition. No acceptance of partial performance on the part of PMC shall constitute a waiver of any term or condition without prior express written authorization form PMC.

RECORDS RETENTION: All records, including certification as required under the terms of this purchase order and which document the quality of the items provided, shall be retained for a minimum of twenty (20) years after the final shipment unless otherwise specified in the purchase order or contract.

FLOW DOWN REQUIREMENTS: Suppliers shall flow down to their sub-tier suppliers any applicable PMC requirements as defined in the purchasing documents (PO, Terms and Conditions, etc.)

SUPPLIER PERFORMANCE: Suppliers providing products and services to PMC will be continuously evaluated by PMC based on the suppliers on time delivery and quality performance.

PRODUCT SERVICE CONFORMITY, SAFETY, AND ETHICAL BEHAVIOR: By acceptance of this purchase order, the supplier acknowledges their awareness of their contributions to product and service conformity, product safety and ethical behavior listed in A) B) & C) below and shall communicate this information and requirements to all employees within the organization that have an impact on product conformity.

1. The materials supplied under this purchase order will be used in aerospace products.
2. The materials supplied under this purchase order have safety impacts on the final products produced.
3. The materials supplied under this purchase order must be produced at the highest possible standards of responsible, sustainable and socially aware business practice.

D-AD-007  Rev. 2  08/08/2018