Purchase Order Quality Requirements

By accepting Area51 ESG, Inc’s (“Area51”) Purchase Order, the Seller (“Vendor”) accepts and agrees to the following requirements where identified on the purchase order.

 

1.0         Suspect, Fraudulent and Counterfeit Parts (product):

1.1         Vendor shall ensure that only new and authentic parts are delivered to Area51. Parts shall meet the original manufacturer’s specification for fit, form and function for a period of one year from the date of delivery to Area51 or for the period provided in the Vendor’s warranty, whichever is longer. Unless otherwise specified on the purchase order or approved in writing by Area51 and accepted by Area51’s customer, Area51 will not accept refurbished parts, reprogrammed parts or parts with bent, formed or oxidized leads, test dots or test markings.

1.2         Vendor shall notify Area51 if the parts quoted or delivered to Area51 are from an independent distributor located in Asia, India or Africa.  

1.3         Vendor shall ensure that suspect, fraudulent or counterfeit parts are not delivered to Area51.

1.4         Vendor and Area51 hereby agree that suspect, fraudulent and counterfeit parts are defined as:

1.4.1     Suspect Part:

A part in which there is an indication that it may have been misrepresented by the supplier or manufacturer and may meet the definition of fraudulent part or counterfeit parts.

1.4.2     Fraudulent Part:

Any suspect part misrepresented to the customer as meeting the customer’s requirements.

1.4.3     Counterfeit Parts:

A fraudulent part that has been confirmed to be a copy, imitation, or substitute that has been represented, identified, or marked as genuine, and/or altered by a source without legal right with intent to mislead, deceive or defraud.

1.5         The following results, reports or documents can be used to determine suspect, fraudulent or counterfeit products:

1.5.1     Area51’s test and inspection;

1.5.2     Test Laboratory test and inspection;

1.5.3     Area51’s customer’s test and inspection;

1.5.4     U.S. Customs and Border Protection’s Letters.

1.6         Product Impoundment and Financial Responsibility:

1.6.1     Suspect, fraudulent and counterfeit parts have no value and if it is later determined that suspect, fraudulent or counterfeit parts were received by Area51 from the Vendor, then any contract terms limiting the Vendor’s liabilities and/or warranties shall be deemed unenforceable. Vendor and Area51 hereby agree that suspect, fraudulent and counterfeit parts have no value and any contract documents establishing a transaction involving suspect, fraudulent or counterfeit parts shall be declared null and void. As a result, Vendor and Area51 hereby agree that Area51 will not disburse or release monies; Area51 is entitled to an immediate refund of all monies paid by Area51; and Area51 is entitled to an immediate refund of all monies paid by Area51 in escrow.

1.6.2     Vendor has the right to agree with or dispute Area51’s findings. Vendor and Area51 hereby agree that if the original component manufacturer determines the suspect parts are authentic, then the decision is “final”. Vendor and Area51 hereby agree that if Area51 or a testing laboratory chosen by Area51 determines that the parts supplied are suspect, fraudulent or counterfeit, then the Vendor has the right to:

1.6.2.1         Agree with Area51’s findings and the transaction will be voided; or

1.6.2.2         Dispute Area51’s findings by contracting with an Area51 and Vendor recognized test laboratory for further test verification.

1.6.3     Area51’s Burden of Proof:

1.6.3.1         Since any dispute between Area51 and Vendor may be resolved in a civil proceeding whether in a court of law or in an arbitration, the appropriate burden of proof required for Area51 to establish that the suspect parts are fraudulent or counterfeit shall be preponderance of the evidence, which means that Area51 must establish that it is more likely than not that the suspect parts are fraudulent or counterfeit.

1.6.4     Product Confiscation or Destruction:

1.6.4.1         If Vendor accepts Area51’s findings and chooses to immediately void the transaction, the suspect parts will not be returned to Vendor unless and/or until an independent test laboratory agreed by both Vendor and Area51 determines that the parts are not suspect counterfeit or counterfeit. Area51 shall retain possession of the suspect parts for a time period at least as long as the applicable statute of limitations under the appropriate Authority(ies) Having Jurisdiction following the date upon which Vendor received notification from Area51 that it was choosing to immediately void the transaction between them.

1.6.4.2         If Vendor exercises its right to have an independent test laboratory determine whether the suspect parts are counterfeit and the test laboratory verifies the findings that the subject parts are either suspect counterfeit or counterfeit, then Vendor must issue an immediate refund of all monies paid by Area51. If the suspect parts are determined to be suspect counterfeit or counterfeit by the independent test laboratory, then the Vendor of those parts shall be required to pay for all charges issued by the testing laboratory. If, however, the suspect parts are determined not to be suspect counterfeit or counterfeit, then Area51 shall be required to pay all of the charges issued by the test lab. Area51 and Vendor agree that whether or not Vendor refunds all monies paid by Area51, Area51 shall have the absolute right to reacquire possession of the subject parts form the test laboratory in order to prevent the subject parts from being offered for sale through any channel of distribution. In the event that Vendor pursues its Supplier, either in civil or criminal proceedings. Vendor shall have the right upon request to receive and use a mutually agreeable sample quantity of the parts sold for the purpose of pursuing its remedies. Upon completion of testing, samples will be returned to Vendor who will then return them to Area51.

1.6.4.3         If suspect counterfeit parts are accepted by Authority Having Jurisdiction or the OCM, then destruction of evidence is only allowed once approval from those bodies has been granted. After destruction approval has been granted, then Area51 shall have the absolute right to destroy the suspect parts. If declined by both of these or if there is no response received within 90 days, then the Vendor and Area51 agree that Area51 shall have the absolute right to destroy the suspect parts after expiration of the applicable statue of limitations under the appropriate Authority(ies) Having Jurisdiction.

1.6.4.4         Notwithstanding the above, if the Vendor and Area51 agree in writing that the parts can be immediately destroyed, the parts will be destroyed per their agreement so long as all civil or criminal actions, in which the suspect parts are the subject of the action, have been completed.

1.6.5     Product Seizure:

1.6.5.1         Product seized by U.S. Customs and Border Protection will not be returned to the Vendor. The Vendor can attempt to dispute these findings by providing Area51 with supply chain traceability and/or test and inspection report on the seized product.

1.6.6     Reporting:

1.6.6.1         Area51 has the right to report suspect, fraudulent or counterfeit parts to Data Reporting Centers (e.g. ERAI, GIDEP, ESCO, etc.). Area51 will generate the report utilizing the form and format provided by the Data Reporting Center.

2.0         Nonconforming Product:

2.1         Vendor shall notify Area51 of any nonconforming product identified by the Vendor prior to shipment or after delivery to Area51 in a timely manner. The Vendor shall obtain Area51’s approval for use or delivery of nonconforming product.

3.0         Notification of Changes:

3.1         Vendor shall notify Area51 and when required, obtain approval of changes in product, service and/or process, changes of suppliers, and changes of manufacturing facility location when specified on the purchase order.

3.2         Vendor shall notify Area51 of changes in business ownership.

3.3         Vendor shall notify Area51 within five (5) business days of losing their Quality Management System (QMS) registration status or receiving notice from the certification body that they are losing their QMS registration status, where applicable.

4.0         Flow Down of Requirements:

4.1         Vendor shall flow down to its suppliers and/or supply chain the following requirements, where applicable:

4.1.1     Area51’s Purchase Order Quality Requirements (QSF-7.4.2)

4.1.2     Area51’s Purchase Order Terms and Conditions

4.1.3     Area51’s Purchase Order Requirements

5.0         Records Retention:

5.1         Vendor shall retain its records for a minimum of 10 years from completion of Area51’s purchase order, unless otherwise specified in the purchase order.

5.1.1     Records could include, but are not limited to, the following:

5.1.1.1         Certificate of Conformance

5.1.1.2         Supply Chain Traceability

5.1.1.3         Test, Inspection, First Article Inspection or Repair Station Reports

5.1.1.4         Airworthiness, Raw Material or Process Certificates

5.1.1.5         Special Tooling, Environmental or Shelf Life Condition Records

6.0         Right of Access:

6.1         Vendor shall allow Area51, Area51’s customers, and/or regulatory authorities’ right of access to applicable areas of all facilities and all applicable records involved in the purchase order. Right of access is extended to all sub-tier suppliers.

6.2         Area51, Area51’s customers, and/or regulatory authorities shall have the right to access the Vendor’s facilities (applicable areas) and all applicable records involved in the order. This right of access is extended to all sub-tier suppliers.

7.0         Preservation:

7.1         Vendor shall preserve (identify, handle, pack, store and protect) product in accordance to the specified purchase order requirements, manufacturer’s specifications, and/or industry standards, where applicable.  Preservation of product shall also include, where applicable in accordance with product specifications and applicable statutory and regulatory requirement, the following:

7.1.1     Cleaning,

7.1.2     Prevention, detection and removal of foreign object debris,

7.1.3     Special handling for sensitive products,

7.1.4     Marking and labeling including safety warnings,

7.1.5     Shelf life control and stock rotation, and

7.1.6     Special handling for hazardous materials.

 

 

 

 

 

DOC. No.: QSF-7.4.2

Issued: 03/16/09

Revision: H

Revised: 04/18/16