Terms & Conditions

As used herein, “Buyer” and “PEI” mean Pacific Engineering Inc. “Seller” means that party with whom Buyer is contracting and includes, by reference, Supplier, Vendor, Contractor or Subcontractor. “Order” means PEI’s Purchase Order/Subcontracted and all documents, exhibits, specifications, and attachments referenced therein and maintained at their latest revision levels unless otherwise specified by contract. The following Quality Provisions are a part of the order to the extent specified. Nonconforming items received are subject to rejection and return to the Seller. When indicated as a DX/DO rating on the Purchase Order, the following statement shall apply:

“This is a rated order certified for national defense use and you are required to follow all the provisions of the Defense Priorities and Allocations System regulations (15 CFR part 700). A rated order shall be accepted or rejected, in writing, within 15 working days for DO rated orders and 10 days for DX rated orders. Special requirements apply for emergency preparedness rated orders (See 700.13 (d) (3). Exceptions are found in 15 CFR 700.13(b).”

1. During the performance of this Order, the Seller shall grant the Buyer and/or the responsible
Government/Customer Representative(s) the absolute right of entry into the Seller’s and the Seller’s sub-tier contractors facilities at all stages of production, for the purpose of determining and verifying the quality of work and material, intended for incorporation in the Buyer’s products. A notice of intent to exercise the foregoing will be given prior to such visits.

2. All items rejected by the Buyer and later resubmitted by the Seller shall bear obvious indication of such resubmission on those items and/or on the shipping document. References shall be made to the rejection document and objective evidence presented that cause(s) for the rejection have been corrected.

3. Product Design changes by the Seller shall require the Buyer’s written approval prior to any such design, configuration or performance characteristic change to any items to be delivered under this Order. This shall include, but not be limited to changes in materials, or manufacturing processes utilized in the production of such items.

4. The Seller shall supply PEI a Certificate of Compliance, attached to or incorporated in the packing sheet, signed by an authorized company representative, certifying that the item(s) delivered herewith are in conformance with all items, conditions, specifications, and requirements of the Purchase Order. The Certificate shall contain, as a minimum, the following:

 

A.  A statement that “the material(s)/item(s) shipped conforms in all respects to the Purchase Order, Drawings, Specifications/Standards, terms, conditions, and Requirements” as stated or referenced in the Order.

B. PEI Purchase Order number.

C. Part Number and Revision.

D. Each Specification/Standard specifically identified in the Purchase Order.

E. Quantity.

F. Signature of an authorized representative of the Seller.

5. The Seller shall perform such functional/operational tests and inspections of components and subassemblies as required to demonstrate and ensure item(s) being delivered to PEI satisfactorily meet all operational and contractual requirements.

6. Seller shall ensure materials being prepared for shipment shall be packaged/crated to provide protection against damage in transit and storage in accordance with applicable Drawings, Specifications, Contract Requirements, Vendor packaging requirements (when supplied by PEI) or by best commercial methods when the preceding are not supplied. Container shall be clearly identified either by labels, tags, or markings with the Seller’s name, address, contents, quantity, Buyer’s Purchase Order Number, Subcontract Number, Serial Numbers, and destination. Parts or assemblies packaged inside the shipping container shall be identified in the same manner as the shipping container and shall also be identified to each other. Example: Package 1 of 1, 1 of 2, etc.

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7. The Seller shall furnish the Buyer, without solicitation, all failure analysis. When it is determined that product which has already been shipped to PEI is defective PEI must be notified immediately in writing. The report shall, as a minimum, contain the item part number, revision level, quantity, description of item, description of discrepancy, root cause, and the corrective action initiated to ensure nonrecurrence of the failure. Such reports shall be submitted within forty-eight (48) hours of Seller’s knowledge of such discrepancy.

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8. For Metallic Material, the Seller shall provide PEI a physical and chemical Test Report for all materials procured for manufacturing the product. Each report to bear an original signature/stamp and date.

9. For Non-Metallic Material the Seller shall provide the typical physical properties (i.e. specification sheet) to PEI for all materials procured for manufacturing the product. Each report to bear an original signature/stamp and date.

10. The Seller shall provide PEI with Certification of heat treat, hardness test
results, and the methods used, with this Order.

11. The Seller shall ensure compliance with MIL-STD-45662, Calibration System Requirements or equivalent ISO/ANSI STD, for all equipment, tools, secondary standards, and sources used to provide calibration of such items used for Inspection or test criteria on products to be delivered to PEI.

12. All Seller procured supplies/services which become a part of the item(s) delivered in accordance with this Purchase Order shall conform to drawing(s) and specification(s) requirements. Seller’s system shall assure:

Purchase Order flow down of applicable and technical requirements, suppliers capability to produce items and adequate methods of assuring compliance. Seller’s Suppliers shall be required to flow down and verify requirements of supplies/services they subcontract.

13. In compliance with DFAR 252.225-7014, Alternate I, all metals, excluding aluminum must be melted in the USA or Qualifying Country per DFAR 225.872-1 (A) or (B). Certificates of conformance must indicate source of raw material.

14. Assure records are complete and legible. Records relating to work and/or conformity of parts/materials shall be maintained and made available for review for a minimum of ten years. Records can be controlled either via hard copy or electronic format.

A. All records shall be in blue or black permanent ink.

B. If records are kept electronically, there must be a documented process for backing up the computer systems.

C. Records that are kept in hard copy shall be stored in appropriate containers to prevent

deterioration or damage to contents.

 

Containers will be stored in a manner to ensure the records remain legible for the required period of retention. Records shall be retrievable. As record retention time expires, a designated person shall verify validity of expired records prior to disposal. Disposal consists of permanently destroying records such as shredding.

 

15. National Defense Clause:

A. The Supplier agrees that he will immediately submit a confidential report to the Defense Department whenever, for any cause, he has reason to believe that an active danger of espionage or sabotage exists at the plant, factory, or site of the work and/or materials covered by this contract. This report shall contain complete information relative to the reasons, which cause the contractor to be apprehensive of such danger.

B. The Supplier agrees that he will, whenever directed by the Secretary of Defense, report to the Defense Department the citizenship, the country of birth, or the alien status of any or all of his employees at the plant, factory, or site if the work and/or material covered in this contract.

C. In each subcontract which the Supplier may make under this contract, the Supplier shall include a stipulation which will limit and control the subcontractor in the performance of such subcontract for standard or commercial products procured under specifications which will not disclose the nature or character of the work and/or materials covered by this contract or any other classified information relative there to.

16. External Providers shall adhere to items listed.

A. implement a quality management system.

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B. use customer-designated or approved external providers, including process sources (e.g.,
special processes)

C. notify the organization of nonconforming processes, products, or services and
obtain approval for their disposition

D. prevent the use of counterfeit parts.

E. notify the organization of changes to processes, products, or services, including changes of their external providers or location of manufacture, and obtain the organization’s approval.

F. flow down to external providers applicable requirements including customer requirements.

G. shall ensuring that persons are aware of their contribution to product or service conformity.

H. shall in ensure their contribution to product safety.

I. shall in ensure the importance of ethical behavior.