HARCOSEMCO TERMS AND CONDITIONS OF PURCHASE

ACCEPTANCE OF ORDER: Placement of this order constitutes an offer to purchase the products and services described herein. Supplier’s acceptance of this order shall form a contract and is expressly limited to the instructions, terms and conditions stated herein. Suppliers commencement of performance under this order shall constitute Supplier’s acceptance of this order.

Seller is responsible for reviewing and communicating material availability and end of life dates timely, to ensure risk mitigation for Buyer.

If purchase order bears a Government prime contract number, Seller agrees that manufacturing records may be subject to inspection and audit by an authorized representative of any Department of the United States Government.

DELIVERY: Delivery of goods shall be made pursuant to the applicable purchase order. In the event Seller fails to deliver the goods within the time specified, Buyer may, at its option, decline to accept the goods and terminate the agreement. Seller shall package all items in suitable containers to permit safe transportation and handling. Buyer’s purchase order number and part number must appear on all applicable documents.

PRICING; Prices for goods or services shall remain fixed during the Agreement period. Any change must be authorized during the Agreement period. Any change must be authorized by Buyer. Prices include all charges and applicable taxes except sales, use and other such taxes imposed upon the sale of goods or services for which the Buyer is solely responsible.

WARRANTY: Seller warrants that all goods furnished under this purchase order shall be free from defects in materials, workmanship and shall conform to all specifications, descriptions, and drawings.

Buyer shall have the right to reject after inspection any of such goods which are defective. All such rejected items shall be returned to Seller, transportation collect, for credit, repair or replacement at no cost to Buyer.

FORCE MAJEURE; Neither party shall be liable for failure to perform any of its obligations under this Agreement during any period in which such party cannot perform due to matters beyond their control, including, but not limited to strike, fire, flood, other natural disasters, or war provided that the party delayed immediately notifies the other party of such delay. Failure of subcontractors and inability to obtain materials or labor, shall not be considered as a force majeure delay.

COMPLIANCE WITH LAWS: Seller shall comply fully with all applicable federal, state, and local laws in the performance of this order including but not limited to all applicable employment, tax, export control and environmental laws.

This contract is subject to the requirements of Title VII of the Civil Rights Act of 1964 and 1991, Section 503 of the Rehabilitation Act of 1973 as amended by the Civil Rights Restoration Action of 1987, 29 C.F.R. part 470 Executive Order 13201 of February 17, 2001, Section 4212 of the Vietnam Era Veterans Readjustment Assistance Act of 1974 as amended by the Veterans Employment Opportunities Act of 1998 and Executive Order 11246 and all other civil rights related laws and regulations that has or may be enacted as amended. All requirements under the aforementioned statutes, orders and applicable regulations including but limited to paragraph 1-7 of Executive Order 11246, as amended, are incorporated herein by reference.

Hazardous Materials will be packaged, marked and shipped by Seller to comply with all present federal, state and local regulations. Seller certifies that all products have been manufactured in compliance with the Fair Labor Standards Act of 1938 as amended.

Seller certifies that goods shall be designed, manufactured and assembled to comply with Occupational Safety Health Act of 1970.

LIMITATION OF LIABILITY; Buyer shall not be liable for any direct indirect or consequential damages or for seller’s lost profits resulting in any way from this order even if Buyer has been advised of the possibility of such damages.

INDEMNIFICATION; In case of a material, product or article Manufactured by Seller according to a design furnished by Buyer, Buyer shall indemnify and hold harmless the Seller from any claim against the Seller that such material, product or article sold to Buyer under this order in and of itself infringes a US patent or patent right. In case of a material product or article manufactured to a design not furnished by Buyer, Supplier shall indemnify and hold harmless Buyer from any claim against such material, product or article under this order infringes a US Patent.

ASSIGNMENT; Seller may not assign any rights or obligations under this order without prior written consent of Buyer. Any assignment or transfer without such written consent shall be null and void.

TERMINATION: Buyer may terminate this order upon written notice to Seller if Seller fails to perform or otherwise breaches this order, files a petition for bankruptcy, becomes insolvent, or dissolves. In the event of such termination, Buyer shall pay Seller for those conforming goods delivered to Buyer through the date of termination. Seller may terminate this order or any Service(s) for any other reason upon thirty (30) days written notice to Seller.

RISK OF LOSS; Title to goods shipped under this Order shall pass to Buyer in accordance with the shipping terms specified on the face of the Order.

WORK ON BUYER’S PREMISES; If Seller’s performance of this order involves work on Buyer’s premises, Seller shall provide all necessary and sufficient safeguards and take all proper precautions against the occurrence of injury to any person or damage to any property, and shall be responsible for and shall indemnify and hold harmless Buyer from any and all loss, suit action or claim including costs and attorney’s fees. Seller shall provide Buyer Certificate of Liability and Property Damage insurance prior to beginning authorized work.

INTELLECTUAL PROPERTY; The parties expressly acknowledge and agree that at no time shall either party acquire or retain, or appropriate for its own use, any right, title or interest in or to any of the other party’s intellectual property.

CONFIDENTIALITY; Seller shall maintain, as confidential, and shall not disclose to any person outside its employees, use for purposes other than performance of this order, any specifications, drawings, data, business information or other confidential information which is exchanged or obtained, except where required by law.

REMEDIES: Rights and remedies herein reserved to Buyer shall be cumulative and additional to any other rights and remedies provided in law or equity.

CONFIRMED ESCAPE; Delivery of a confirmed non- conforming product or service resulting in a Corrective Action may be subject to a $500 penalty per incident.

BLANKET ORDERS; Quantities listed on the purchase order are forecasts only. The quantities and exact time frame of this agreement will be determined by the Buyer’s market and ability to sell finished goods into that market. Both parties to this agreement accept the fact that estimates, forecasts and projections of demand quantities and time frames are for reference purposes only, and are not guarantees of specific quantities to be purchased.

EXPORT LAWS: The parties acknowledge that any information provided or received may be subject to export laws and regulations and each of the Parties agree that they will strictly comply with all applicable requirements under such laws and regulations. As such, each Party warrants that it will not export or transfer information by any means, electronic or otherwise without complying to export Laws.

ECCN: Export Control Classification Number – Commercial commodities shall be supplied with the applicable ECCN.

COUNTERFEIT MATERIAL: All product provided to Buyer shall consist of genuine materials only. Buyer must be contacted if Seller becomes aware of Non-Conforming or Counterfeit Product. If Non-Conforming or Counterfeit Products are furnished and are found in any of the goods delivered hereunder, such items will be impounded by Buyer. The Seller shall promptly replace such Non-Conforming or Counterfeit Product with parts acceptable to the Buyer at Sellers expense. A Counterfeit part is defined by the Buyer as a part that is one or more of the following – an illegal or unauthorized copy or substitute of an original equipment manufacturers item; an item that does not contain the proper materials or components as required by the OEM specifications; an item that is used, refurbished or reclaimed and represented as new; an item that has/does not successfully pass all OEM testing requirements; or an item with labeling, marking or design (with or without intent) that could mislead one into believing an item is something that it is not. Seller must have an applicable Counterfeit protection plan in place consistent with the appropriate industry standards such as AS5553B or AS6174A.

Rev – 06/06
Rev A – 02/08
Rev B – 09/08
Rev C – 04/10
Rev D – 08/11
Rev E – 07/12
Rev F – 07/16
Rev G – 05/17
Rev H – 10/17

PURCHASE ORDER QUALITY PROVISIONS

S1 – Quality System Provisions Applicable to All Suppliers

The Supplier shall maintain a documented Quality System that complies, at a minimum, with Federal Acquisition Regulation Clause 52.246-2. The system shall address

  1. Calibration: Measuring and test equipment (M&TE) that is used to determine the acceptability of product shall be calibrated to a frequency re-call system. All calibrations of M&TE shall be traceable to N.I.S.T or equivalent.
  2. Nonconforming Material: A system for controlling nonconforming material shall be maintained. At a minimum, a system for segregation, identification and  ispositioning shall be defined. Suppliers shall not knowingly ship nonconforming product without prior, written approval from the HARCO buyer.
  3. Software Control: If software is used during the production and/or inspection of items on this Purchase Order, such software shall be controlled in accordance with DOD-STD-2168 or as otherwise approved by HARCO Quality Engineering.
  4. Quality Records: The Supplier shall retain records that provide objective evidence of Quality for a period of three (3) years after shipment.
  5. Control of Sub-Tier Suppliers: Supplier shall be responsible for conformance to requirements of items purchased from sub-tier suppliers. Supplier shall assure the requirements of applicable drawings and specifications are imposed on sub-tier suppliers.
    Verification of purchased raw material shall include certifications for physical and chemical properties that shall be forwarded to HARCO upon shipment of the finished product.
  6. Sampling Procedures: Unless otherwise specified by HARCO, when performing less than 100% inspection sampling, sampling plans shall be based on “0” percent acceptance and be based on ANSI/ASQC Z 1.4, latest revision.
  7. Federal Aviation Administration (FAA) Rights: The Federal Aviation Administration reserves the right to perform Audits of HARCO’s Suppliers.
  8. United States Government Rights: When the face of the P.O. specifies a Government contract and Department of Defense rating, expediting of this order can be enforced by the United States Government.
  9. Surveys and Surveillance: HARCO shall have the right to conduct surveys and perform surveillance of the Supplier’s and Sub-Tier Suppliers’ facilities/operations to evaluate their capability to comply with contractual requirements. HARCO reserves the right to perform on-site Source Inspection by HARCO’s Customer including the Government and Federal Aviation Administration.
  10. Document Currency: Supplier shall utilize revisions of drawings and specifications current at the time of order placement or as otherwise amended in writing by Purchase Order.
  11. FAA Licensed Repair Stations: Holders of FAA Repair Station Licenses (1) shall ensure that the work being performed is within their ratings and limitations and (2) shall notify HARCO in writing of any changes to the status of their license, ratings and limitation.
  12. FAA Licensed Repair Stations: Holders of FAA Repair Station Licenses (1) shall ensure that the work being performed is within their ratings and limitations and (2) shall notify HARCO in writing of any changes to the status of their license, ratings and limitation.

S2 – Quality Provisions Applicable to All Purchase Orders

  1. Certificate of Compliance (Applicable to all Shipments): One (1) copy of a Certificate of Compliance indicating parts meet all applicable specifications, signed or stamped by an authorized Supplier representative shall be provided with each shipment. At a minimum, the Certificate of Compliance shall include the Supplier’s name and address, HARCO part number and revision, Purchase Order number, and the quantity shipped.
    Exclusion(s): Revision requirement on distributor and Mil-Spec parts.
  2. Certificate of Analysis: Certificates of Analysis shall be provided with each shipment of parts that are produced to a HARCO design.One (1) copy of a completed Mill certified Test Report, including Chemical and Physical properties for all raw materials are required with each shipment. Whenever HARCO drawing and/or Purchase Order make direct reference to a specific material specification, all certifications shall include reference to the applicable specification and its revision level. Subject material specifications include, but are not necessarily limited to SAE, AMS and MS specifications.Note: When the raw material for this Purchase Order is supplied by HARCO, then the supplied HARCO Form 103 shall be completed and returned with the shipment in lieu of the Certificate of Analysis.Note: (P&W LCS Approved Suppliers only) When the HARCO Purchase Order specifies that the manufacturing shall be LCS per PW MCL Section F-17; the Certificate of Compliance shall contain a statement to that effect in lieu of the Certificate of Analysis. The Supplier shall notify HARCO of any changes in their LCS status.
  3. First Article: First Article requirements apply whenever the part is produced to a HARCO design. For such parts:Supplier shall provide a First Article Inspection Report (FAIR) with the applicable shipment whenever any of the following are true:
    • This is the first shipment of this part number to HARCO.
    • This is the first shipment in excess of two years since the last shipment of this part number.
    • A revision to the HARCO drawing has occurred since the last shipment of this part number. (In this case, the FAIR shall address only the changes since the previous FAIR).

    The FAIR must be submitted using the current revision of the SAE AS9102 standard. The submission must include a ballooned drawing. The applicable forms and instructions are available at www.harcolabs.com.

    Exclusions include, but are not limited to: distributors and Mil-Spec parts.

  4. Perishable Items: When it is known by the Supplier that the product being supplied on this Purchase Order is perishable with a finite life expectancy, the Certificate of Compliance shall contain the respective manufacturing date and the expiration date of the product. If special storage temperature other than room temperature is required, the Supplier shall so specify. Material being shipped against this Purchase Order shall have a minimum of 75% remaining of the specified shelf life when received at HARCO. Any exceptions shall be noted on Purchase Order.
  5. Temperature Sensitive Items: The supplier shall take adequate precautions to ensure that temperature sensitive material does not exceed maximum/minimum storage temperatures during the entire transit process. Shipping containers shall be clearly marked with the proper storage temperature(s).
  6. Statistical Process Control: HARCO drawing requirements for “SPC Data Delivery” applies only when specifically noted by Purchase Order.
  7. Cleanliness: Manufactured parts shall be free of oil, grease or other contamination.
  8. Packaging: Good commercial packaging techniques shall be used with sufficient protection to ensure safe arrival at HARCO. Staples and similar fasteners are prohibited from use due to Harco’s required Foreign Object Damage Program.
  9. Visual Acceptance Criteria: Unless otherwise specified by HARCO drawing or Purchase Order, the visual inspection methods and criteria of HARCO VIS-01 (Visual Inspection Standard) shall apply. The revision of VIS-01 in effect as of the date of the HARCO purchase order shall apply. VIS-01 can be located on www.harcolabs.com.
  10. Special Processes and Non-Destructive Testing (NDT): When the HARCO drawing or Purchase Order requires a Special Process or NDT, the supplier shall contact HARCO Purchasing for the name of an approved Supplier authorized to perform the required process. The Supplier’s Purchase Order to the sub-tier supplier shall request a Certificate of Compliance that must be forwarded to HARCO with the shipment. Special Processes include, but not limited to, all welding and brazing, fluorescent penetrant inspection (FPI), radiographic (X-Ray) inspection and ultrasonic inspection process and heat-treat.
  11. Electrostatic Discharge Control: Suppliers shall make provisions for protection of electronic and electrical material, that has been designated by HARCO as sensitive to Electrostatic Discharge (ESD), in accordance with MIL-STD-1686.
  12. Welding Wire Identification: Weld wire (cut lengths) shall be color coded in accordance with AMS 2819 except that both ends shall be color coded.
  13. Restricted Processes: The following processes shall not be used except where specifically permitted by the applicable purchase order, drawing or by the specifications invoked by the purchase order or drawing:
    • Welding, brazing or soldering where any remnant of the welded, brazed or soldered material, joint or heat affected zone remains on the part.
    • Electron Beam Metal Removal
    • Electrochemical Metal Removal
    • Electrodischarge Metal Removal
    • Laser Beam Metal Removal
    • Ball broaching or burnishing of holes or bores to develop a required surface roughness, texture or size.
    • Roll forming or roll tapping of internal screw threads.
  14. Suppliers of Machined Parts: Supplier shall provide a material sample with the applicable shipment whenever any of the following are true:
    • This is the first shipment of this machine part to HARCO
    • Material has changed since last shipment of this part to HARCO
    • This is the first shipment in excess of two (2) years since the last previous shipment of this part number to HARCO
    • Test bar required with all castings
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  15. Change Notification: Supplier shall notify HARCO in writing of any changes that affect company ownership, manufacturing locations or manufacturing processes.

S3 – Part Specific Quality Provisions

The following Provisions are applicable when specified by Provision Number on the face of the accompanying Purchase Order.

  1. Thermocouple Tubing: hermocouple tubing shall be supplied “Thermocouple Clean” in accordance with ASTM 632, paragraph S3. The Supplier’s Certificate of Compliance shall include a statement to this effect. Tubing shall be packaged in wooden cases and protected from being bent, gouged, dented or distorted.
  2. Wire Spools: Wire shall be spooled one length per spool. A twenty-four (24) inch length of the inside end of the wire shall be exposed and neatly wound with a protective material secured to the surface of the wire. Each spool shall be supplied in a separate carton.
  3. Wire and Cable: All defects must be cut out. No more than 2 lengths are allowed per spool and each length shall be recorded on the spool. Wire and cable shall be spooled such that a minimum of 6 (six) inches of both ends of each length are accessible.
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  5. Test Report Required: A completed test report is required with each shipment for each of the Physical/Mechanical/Electrical properties listed on the field of the Engineering Drawing and or as listed separately on the purchase order for each lot, batch or heat no. All test reports shall include reference to the specific material specification and its most recent revision, the required and actual values for each characteristic, and acceptance by the authorized testing personnel.
  6. Material for Boeing End Use: Material supplied on this Purchase order is for product deliverable to The Boeing Company.
  7. Boeing Approved Supplier: Supplier’s quality system shall meet the requirements of Boeing’s basic quality system for suppliers. Supplier shall maintain approved status with Boeing during the term of the purchase order and must promptly notify Harco in writing if this status is lost or suspended or if its status in D1-4426 has been changed.
  8. Boeing Qualified Product:
    • Material provided under this Purchase Order shall be continuously qualified and controlled to the requirements of the applicable drawing, Boeing Material Specification (BMS) or Specification Control Drawing (SCD) called out on the Harco engineering drawing during the term of the purchase order.
    • Supplier shall maintain qualified status with Boeing to produce this material during the term of the purchase order and must promptly notify Harco in writing if this status is lost or suspended or if its status in D1-4426 has been changed.
    • If this material is re-qualified during the term of this purchase order the supplier shall notify Harco and supply a copy of the qualification test report to Harco upon request.
    • The supplier agrees to furnish Harco on request with copies of the supplier’s drawings, specifications or process sheets necessary for Harco to meet Boeing’s quality assurance requirements.
    • The supplier must perform all testing required by the Supplier Quality Control section of the applicable drawing, BMS or SCD.