General Terms and Conditions of Purchase
- The following terms and conditions of purchase shall apply to all orders of products and procurement of services of any kind that ARGOSUS undertakes in relation to the Supplier. Service providers and other contractual partners shall also be referred to as “Supplier”.
- ARGOSUS shall not recognize any terms and conditions of the Supplier that conflict with or differ from these terms and conditions of purchase, unless it gives its express written consent to their validity.
- ARGOSUS’s terms and conditions of purchase shall also apply to all future business transactions with the Supplier even if they are not expressly agreed again.
- Execution of the purchase order shall be deemed to be recognition of these terms and conditions.
- All agreements that are made between ARGOSUS and the Supplier for the purpose of execution of the Agreement shall be recorded in writing. Oral arrangements shall require written confirmation.
The supplier is responsible, after receiving the form Purchase Order, to evaluate the foreseen commercial conditions. If ARGOSUS does not receive any communication from the supplier within 2 business days after the Purchase Order was received, ARGOSUS will understand the Purchase Order was accepted.
Requirements for suppliers:
- The processes, products, and services to be provided including the identification of relevant technical data (e.g., specifications, drawings, process requirements, work instructions)
- The approval of:
- products and services
- methods, processes, and equipment
- the release of products and service
- Competence, including any required qualification of persons
- The external providers’ interactions with the organization
- Control and monitoring of the external providers’ performance to be applied by the organization
- Verification or validation activities that the organization, or its customer, intends to perform at the external providers’ premises
- Test, inspection, and verification
- The use of statistical techniques for product acceptance and related instructions for acceptance by the organization
- The necessity to:
- implement a quality management system
- use customer-designated or approved external providers, including process sources (e.g., special processes)
- notify the organization of nonconforming processes, products, or services and obtain approval for their disposition
- prevent the use of suspected unapproved, unapproved, and counterfeit parts − notify the organization of changes to processes, products, or services, including changes of their external providers or location of manufacture
- flow down to external providers applicable requirements including customer requirements
- provide a certificate of conformity, test reports, or authorized release certificate, as applicable
- retain documented information, including retention periods and disposition requirements
- The right of access by the organization, their customer, and regulatory authorities to the applicable areas of facilities and to applicable documented information, at any level of the supply chain ensuring that persons are aware of:
- their contribution to product or service conformity
- their contribution to product safety
- the importance of ethical behavior
- ARGOSUS’s technical documents, drawings, article geometries, work specifications and other information enclosed with the purchase order shall be an essential component of said purchase orders.
- If the order confirmation diverges from the purchase order, ARGOSUS shall be bound only if it has agreed in writing to the divergence. The acceptance of deliveries or services or payments shall not signify agreement.
- When any difference is detected between the quantity requested by ARGOSUS (conditions agreed to, lead time, etc.) and the quantity delivered by the supplier, ARGOSUS may use a “Premium Freight”, even an international air freight to ship the parts to the Final Customer. All the costs involved in this delay caused by the supplier, such as freight, duties, taxes, packaging, labor, etc. will be debited from the supplier.
- If supplier sends an overage of the quantity requested in the PO, ARGOSUS may refuse to receive the parts that exceed the requested quantity. ARGOSUS may refuse the supplier invoice and/or request a change of the invoice values, extending the invoice payment date, without penalties, losses, or breaches to the agreement.
If repackaging is necessary at ARGOSUS, it will be promptly performed along with the generation of a Debit Memo to the supplier.
- The price shown on the purchase order shall be binding. Price increases shall be permitted only if written agreements in respect of the price have been made between the Parties.
- When the supplier, for any reason, does not accomplish the lead times they have quoted to ARGOSUS, Supplier’s delivery performance will be affected as described in this manual, and all of the expenses elapsed due to delay, as for instance “Premium Freights” will be supplier’s responsibility. In case of non-communicated delivery anticipation, ARGOSUS will have the right to not accept partial or complete shipment and return shipment at supplier’s expense. It is agreed that in case the supplier is recurrent in on-time delivery problems, ARGOSUS may cancel for fair cause the supplied object of the manual present.
- Supplier must follow a standard box quantity. Even if packaging requirements were not defined, the supplier must send ARGOSUS a document describing the kind of packaging and the box quantity that the item will be delivered in. All wood packaging, such as crate or pallet, must follow the regulations of wood packaging material in international trade (ISPM15) for phytosanitary measures.
- Every box should have an identification and its contents should contain the information described below in labels:
- Supplier Part Number
- ARGOSUS Part Number
- Production Lot
- PO Number
- Manufacturing date
Note: When any other information is necessary, ARGOSUS is responsible for informing the Supplier officially through the Purchase Order.
- Supplier must contact ARGOSUS prior to every delivery for shipment instructions. Failure to do so may result in a Debit Memo to the supplier.
- The delivery period specified in the purchase order shall be binding and shall, unless a fixed date has been agreed, commence from the date on which the purchase order is issued. The data on which the goods are received at the shipping address specified by us shall determine the timeliness of delivery.
- The Supplier shall be obliged to notify ARGOSUS immediately in writing, specifying the reasons and the anticipated duration of the delay, if circumstances occur or if the Supplier becomes aware of circumstances which imply that it will be unable to fulfil its contractual obligation in whole or in part or in good time. If the Supplier fails to inform ARGOSUS, it may not invoke the obstacle vis-à-vis ARGOSUS.
- The unqualified acceptance of a delayed delivery or service shall not signify waiver of the claims to which we are entitled on account of the delayed delivery or service; this shall apply until the fee owed by us has been paid in full.
- When for any reason, the usage of a “Premium Freight” is necessary (a different way of transportation than agreed upon between ARGOSUS and the Final Client) and this “Premium Freight” was due to any problem caused by the supplier, such as delayed delivery, rejected parts, tracking or identification problems, or any other issue that is different than the agreed upon Purchase Order or contract established between ARGOSUS and Supplier, the Supplier will be charged for all the expenses related to this freight and ARGOSUS can deduct the expenses from the invoice issued by the supplier.
- The supplier will be notified about every “Premium Freight” charged, however there is no necessity of approval by the supplier for the deduction on the invoice.
- It is agreed that, from now on, in case ARGOSUS needs to use the “Premium Freight” two times consecutively, ARGOSUS can rescind for FAIR CAUSE
- A delivery that is made early without our consent shall not affect the payment obligations based on the agreed delivery dates.
- Rust Prevention
- When rust prevention is a specification of the product, ARGOSUS may request that the suppliers use protective oil or VCI bags in order to protect the products against damages or deterioration. This way, it is established that the supplier is responsible for the protection of the pieces against oxidation for overseas transportation; however, do not use protection if is not specified in the drawing or norm defined by ARGOSUS for production, without written authorization from ARGOSUS.
- If Supplier uses protective oil without ARGOSUS’ written authorization, Supplier is responsible for paying all expenses and damages faced by ARGOSUS due to the improper use, rejection of the pieces, or of any other problems resulting from the improper use of protective oil in the pieces or disconformities with their specifications.
- When such oils are demanded, this information will be provided in the Purchase Order or through parts/product specifications.
Storage and Handling
- When specified by ARGOSUS, suppliers must assure that the packages follow the defined specifications.
- When providing samples, supplier must use standard packaging and attach the packaging form provided by ARGOSUS.
- The ARGOSUS Quality Department will analyze the packaging in order to evaluate if it is approved to supply to ARGOSUS.
- To verify if the suppliers are following the specifications described in the documents supplied by ARGOSUS, the package is checked during receiving inspection to verify compliance to specification; if it doesn’t, parts will be REJECTED.
- The suppliers are responsible for providing strong packaging capable of shipping products without damages during transportation, as well as taking responsibility for maintaining enough inventory to cover the variations in the volumes of deliveries of the supplied items, as foreseen in the Purchase Order issued by ARGOSUS.
- Every and any product engineering change will only be able to be implemented by the Supplier after formal and written approval from ARGOSUS and at that time will decide if it is necessary or not to have a submission of a new PPAP or any other document requested by Final Client, as described in this manual.
- Every product/process change that modifies the conditions initially approved by ARGOSUS, must be informed 60 (sixty) days prior to changes. A new submission for approval by ARGOSUS and/or Final Client may be required.
SAMPLES SUBMISSION CRITERIA
- ARGOSUS, according to Final Client’s request, works to provide sample submissions according to the PPAP (Production Part Approval Process) Manual, always using the last edition. Any situation which is not considered in the PPAP Manual must be negotiated and approved by ARGOSUS.
- ARGOSUS will be able to, at any moment, schedule visits to the supplier to verify if the requirements which were specified in the sample approval report are being accomplished.
- The suppliers must make the PPAP and all the documentation and samples, according to the PPAP Manual Last Edition. Suppliers that are not required to provide a PPAP should send to ARGOSUS a document the ROC – Record of Conformance.
Non-Conformity and Corrective Actions
- As soon as non-conformity is detected in any product supplied to ARGOSUS, the supplier will be notified through an NCR, which must be filled out and returned to ARGOSUS. The supplier has 5 business days starting from the NCR issue date of the non-conformity notification to identify the root causes and to define the necessary corrective actions for the elimination of the problem. The containment action must be sent to ARGOSUS within 24 hours.
- ARGOSUS quality department, after receiving this form properly filled out, will analyze the identified causes and the actions proposed in order to plan the evaluation of the action effectiveness. Those forms will be revised by ARGOSUS and in some cases may be revised by the Final Customer, which they may or may not accept.
- All the costs involved due to product non-conformities, resulting in inability of use by ARGOSUS and/or by the Final Client, will be reimbursed by the suppliers to ARGOSUS.
- In case of non-conformity and depending on the situation, ARGOSUS will execute rework, sorting of pieces, purchase from alternative sources, etc. All the costs will be charged to the supplier.
- Every non-conformance detected will automatically generate an initial Administrative Expense of US$ 100.00 (One hundred dollars) – either for a Quality or Logistic issue. This is applied to all ARGOSUS’ suppliers.
- All other costs will be calculated by ARGOSUS, such as labor, sorting, rework, penalties for warehouse occupancy, scrap, premium freight, duties, taxes, parts replacements, production line shut down, warranty, recall, packaging, root cause analyses, etc. These costs will be paid by the supplier.
- Packaging/Logistics issues are also considered non-conformances. For every Logistics issue detected at ARGOSUS Receiving Dept., the following actions will be taken:
- ARGOSUS generates a Receiving Report detailing the issue* (Logistics Warning)
- In the case of reoccurrence, ARGOSUS generates a Debit Memo against the supplier
- Examples of issues include but are not limited to: Wrong box quantity (compared against ARGOSUS Blanket PO); inappropriate packaging; discrepant quantity in the receiving, wood pallet not HT, extra labor to correct/rework supplier’s packaging.
- Besides the administrative fee of US$ 100.00 (One hundred dollars), ARGOSUS may also debit the supplier at the following rates: HT wooden pallet (48×40 and 36×36) at $10.00/ea (ten dollars); Human labor at $25.00/hour/person (twenty-five dollars); Carton Box at $6.77/ea (six dollars and seventy-seven cents) independent of the size. These rates may be revised/updated without previous notice.
- The items that contain special characteristics or safety characteristics specified in drawing should be identified according to the requirements demanded by ARGOSUS.
- ARGOSUS, when placing the purchase order to the supplier must inform, when necessary, the symbols used to identify items such as critical and safety characteristics, as well as the meaning of each item and each nomenclature to be used for the identification of the products. In case the supplier has any doubts, the supplier must express them to ARGOSUS; mistakes won’t be accepted if committed by omissions of the suppliers.
- The Supplier shall also warrant that, as far as is economically and technically possible, it uses environmentally friendly products and methods in respect of its deliveries or services. It shall be liable for the environmental compatibility of the supplied products and packaging materials and for any and all consequential damages incurred as a result of any breach of statutory disposal obligations. At the request of ARGOSUS, the Supplier shall be obliged to issue a quality certificate for the supplied goods.
- With the premise of non-conformity which means the failure to accomplish the technical specifications, as well as any laws, terms, regulations, technical norms or any other existing norms which result in imputation of fine or penalty to ARGOSUS and/or to the Final Client, the supplier will be responsible to indemnify and/or for the reparation to ARGOSUS and/or to the Final Client of any expenditure, compensation funds, attorney’s fees, legal fees and procedural costs which have incurred.
- Cases of force majeure shall release the contractual partners from performance obligations for the duration of the disruption and to the extent of its effect. The contractual partners shall, within the scope of what is reasonable, be obliged to provide the required information without delay and to adjust their obligations to the changed circumstances in good faith.
- In cases of force majeure and events over which we have no control, we shall also be entitled, without prejudice to our other rights, to rescind the Contract in whole or in part, providing these events are not of negligible duration and our requirements are considerably reduced owing to the necessary procurement elsewhere or our interest in the delivery wholly ceases as a result.
- An event of force majeure experienced by the Supplier may not be due to a lack of personnel, production materials or resources, strike, breach of contract by third parties engaged by the Supplier or financial problems of the Supplier, or to an inability to obtain the necessary licences for the software to be supplied or the necessary legal or official approvals or authorizations for the goods or services to be supplied.
Product Liability – Indemnification
- If ARGOSUS is held liable, on account of the defectiveness of a product, based on a breach of official safety regulations or due to product liability provisions and if said defectiveness is due to the Supplier’s goods, the Supplier shall be obliged to compensate ARGOSUS for the damages or to indemnify it, on first demand, against third-party claims for damages, insofar as the cause has been deemed to fall within its area of control or organization. The damages shall also include the cost and expense of a recall campaign as well as those of any legal defense required
- The Supplier shall designate the delivery items in such a way that they are identifiable, in the long term, as its products. It shall carry out quality assurance that is appropriate in terms of type and extent and is state of the art in terms of technology and provide evidence thereof to ARGOSUS upon request. The Supplier shall, where ARGOSUS deems such to be necessary, enter into a corresponding quality assurance agreement.
Invoicing and Payments
- Invoices shall be submitted separately following completed delivery, quoting the order and article number shown on the purchase order.
- If the invoice is received later than the goods, calculation of the discount period shall be determined by the date of receipt of the invoice and not the date of receipt of the goods. Where partial deliveries have not been expressly agreed, a total invoice shall be issued (in duplicate) for each purchase order following complete delivery.
- Receivables from ARGOSUS may be assigned only with its written consent.
- Unless otherwise agreed in writing, payments shall be made within Net 30 days.
- The payment period shall commence as soon as the delivery or service has been provided in full and a properly issued invoice has been received.
Should a provision in these terms and conditions of purchase or a provision in the context of other agreements be or become invalid, this shall not affect the validity of any other provisions or agreements. In place of the invalid provision, the legally valid provision that comes as close as possible to the economic intent of the invalid provision shall be agreed.
- The parties recognize that the information that comes to be exchanged due to the supplier in question constitutes industrial and/or commercial secrets, committing the Supplier, their partners, directors and employees, to not publish them nor to reveal them in any time, way or forms, except if previously authorized in writing by ARGOSUS or if necessary, for the execution of legal obligations.
- Any violation of the obligation of confidentiality gives the right to the jeopardized party of compensating any damages and/or jeopardies, direct or indirect, supported by this document, besides the rescission for a contractual infraction.
- The established confidentiality obligation will last through the relationship between ARGOSUS and Supplier and for a period of 2 (two) years after termination.