purchase order terms and conditions - ausgroup€¦ · purchase order, the purchaser may, in its...

Document Number: AGC-COMM-TPL-041-AUS Rev: 10 of 26

Purchase Order Terms and Conditions This Purchase Order is subject to the following terms and conditions “the Terms” and by accepting this Purchase Order the Supplier agrees to supply Goods in full compliance with the Purchase Order and the Terms.

1 Definitions

As used in this Purchase Order.

Goods means all and any part the machinery, plant, equipment, apparatus or materials to be supplied and/or the Scope of Works to be performed in accordance with the Terms of the Purchase Order

Party/Parties mean Purchaser and Supplier and include any cessionaries.

Purchaser means name of AusGroup Entity

Purchase Order means this Purchase Order, any amendments or variations to this Purchase Order as well as all documents attached to or incorporated in this Purchase Order by reference.

Purchase Order Price means the price stated in the Purchase Order which is fixed and firm and not subject to price escalation. The Purchase Order Price is the full amount that the Purchaser will pay to the Supplier as full and complete consideration for Purchaser’s obligations under the Purchase Order.

Scope of Works (SOW) means the Goods and includes all required work, services, materials, documents, information, records, labour, supervision, engineering, procurement and management to be provided by Supplier in order for Supplier to provide the Goods under this Purchase Order

Supplier means the person, business or entity with whom the Purchaser has placed the Purchase Order.

Warranty Period has the meaning given to it in sub-clause 18.2

2 Contract

2.1 The Purchase Order when bearing an order number:

(a) shall be the only authority by the Purchaser for charging Goods to Purchaser’s account, and;

(b) constitutes the entire agreement between the Parties

2.2 The Purchase Order shall constitute a legally binding contract between Purchaser and the Supplier and set out the terms and conditions of the purchase of the Goods.

2.3 The contract comes into existence on the issue of the Purchase Order, irrespective of whether the Supplier returns a signed copy of the Purchase Order to Purchaser or expressly confirms its agreement to these conditions.

2.4 To the extent the Supplier’s terms and conditions are supplied to Purchaser, including with Goods or as printed on consignment notes or other documents (including quotations), those terms and conditions will be of no legal effect and will not constitute part of the Purchase


Order even if any of Purchaser’s personnel signs those terms and conditions or annexes the terms and conditions to the Purchase Order.

2.5 The Purchase Order, as set out in clauses 2.2, 2.3 and 2.4, shall always prevail over any other conditions between the Parties.

2.6 The Supplier may not assign the benefit of the Purchase Order without the Purchaser’s prior written consent.

2.7 The Supplier shall not sublet any part of the SOW related to the supply of the Goods without the Purchaser’s prior written consent, which consent shall not be unreasonably withheld.

2.8 The terms and conditions of the Purchase Order shall only be varied in writing signed on behalf of both Parties.

3 Payment

3.1 The Supplier acknowledges and agrees that:

(a) The Purchaser only processes invoices for payment at the end of each calendar month.

(b) The Supplier must forward its invoice, which shall record the order number contained on this Purchase Order:

(i) to the invoice address specified on the Purchase Order; and

(ii) at least five (5) days before the end of each calendar month.

(c) Unless otherwise stated, and subject to Clauses 3.3, 3.4, and 4.1, payment will usually be made within forty five (45) calendar days from the end of the month in which the invoice was received, provided that the Goods conform to the Purchase Order and comply strictly with every aspect of the specifications contained in the Purchase Order.

3.2 Duty, excise or other government charges required to be charged by the Supplier must be stated separately on the invoice.

3.3 Invoices which do not comply with Clauses 3.1 and 3.2 shall be returned to the Supplier and shall not be treated as giving rise to any entitlement under clause 3.1 until such time as re-submitted in the complying form.

3.4 The Purchaser may hold five percent (5%) of the Purchase Order Price as retention for the Warranty Period specified in Clause 18, or may require the Supplier to provide a bank guarantee at the Supplier’s expense.

3.5 The bank guarantee referred to in Clause 3.4 above must be provided to the Purchaser at the time of final delivery of Goods. The bank guarantee must be an unconditional, irrevocable and enforceable banker’s undertaking payable on demand. The bank guarantee must be equivalent to five percent (5%) of the Purchase Order Price, be in a format approved by the Purchaser and shall be retained by the Purchaser until the end of the Warranty Period.


4 Taxes

4.1 The Goods and Services Tax (GST) and all other taxes payable with respect to the supply of the Goods shall be the subject of the following conditions:

a) any invoice provided to the Purchaser by the Supplier is to be a valid tax invoice for the purposes of the GST legislation;

b) where GST is payable in respect to the Purchase Order, notwithstanding any other conditions of supply, the Purchaser shall be under no obligation to pay the Supplier until the Supplier has complied with clause 4.1; and

c) any amount payable to the Supplier by the Purchaser which results from changes to the GST legislation or any other taxation reform shall, where the amount is an increase to the amount payable, be limited and proportionate to the change, and where the amount is a decrease to the amount payable, the decrease will be least proportionate to the change.

5 Time

5.1 Time shall be of the essence in this Purchase Order and no extension or variation of the completion/delivery date shall be considered as a waiver of this provision.

5.2 The Supplier shall deliver the Goods by or on the date specified in the Purchase Order, in accordance with the delivery terms specified in the Purchase Order.

5.3 In the event the Supplier fails to deliver the Goods by or on the date specified in the Purchase Order, the Purchaser may, in its sole discretion, levy liquidated damages at the rate of 1% of the Purchase Order Price per day for each day after the due date. The liquidated damages shall be capped at a maximum of 20% of the Purchase Order Price.

5.4 The Parties agree that liquidated damages are a genuine estimate of the losses that the Purchaser will suffer for delay by the Supplier to deliver the Goods by the completion/delivery date and is not intended to be a penalty for late performance.

6 Conformance to Purchase Order and Specifications

6.1 The Supplier shall ensure that the Goods are in accordance with the terms, specification, drawings and any other set criteria as set out in this Purchase Order.

7 Inspection and Testing

7.1 The Purchaser or its nominated representative shall at all times during business hours be entitled access to the Goods. This access is deemed to include, but not be limited to the following periods and circumstances:

a) At any time during the fabrication and/or manufacture:- b) At any time after (a) but before acceptance by physical possession being taken by the

Purchaser; c) the carrying out of any inspection or examination, including by expediting, and temporarily

taking away the Goods (including at the Supplier’s Subcontractor’s premises);


d) The implementation of witness tests and investigation of workmanship and performance at the Supplier’s and/or the Supplier’s subcontractor’s premises.

7.2 The Purchaser is, to avoid doubt:

a) entitled to carry out its own inspection or examination on receipt of the Goods notwithstanding any prior inspection; and

b) granted an irrevocable licence to both deal with the Goods and to be on the premises of the Supplier and the Supplier’s Subcontractor’s premises for the purposes of this clause 7.

7.3 Any inspection or test carried out by the Purchaser shall not relieve the Supplier of any of its obligations under this Purchase Order in relation to provision of the Goods.

7.4 If, during the term of this Purchase Order and/or the Warranty Period as described in Clause 18, any of the Goods are found to be defective and/or are not to the Purchaser’s satisfaction, the Purchaser shall, by written notice, require the Supplier to make good the defect, and/or to do all such things as may be reasonably required by the Purchaser to rectify the Goods.

7.5 If the Supplier fails to rectify the defect and/or to do all such things as may be reasonably required by the Purchaser for the Purchaser to be satisfied with the Goods then, in addition to any other rights or remedies which the Purchaser may have against the Supplier at law, in equity or under statute, the Purchaser may:

(a) return the Goods to the Supplier at the Supplier’s expense and risk; and/or

(b) remedy the defect or do all such things as may be reasonably required for the Purchaser to be satisfied with the Goods at the cost of the Supplier; and/or

(c) treat the failure to remedy the defect and/or the doing of all such things as may be reasonably required by the Purchaser as a default under Clause 12; and/or

(d) retain the Goods by applying, by way of abatement or legal or equitable set-off, a reduction in the price payable for the Goods which shall be an amount solely determined by the Purchaser and notified to the Supplier.

7.6 If the Purchaser returns the Goods to the Supplier pursuant to Clause 7.5 (a) then the Supplier shall be held accountable for all delivery costs.

7.7 If the Purchaser exercises its rights under Clause 7.5 (d) the price contracted to be paid by the Purchaser shall be taken to have been varied as if the consent of the Supplier has been given in writing complying with Clause 2.5 above.

8 Data

8.1 The Supplier shall furnish all engineering and other data in accordance with the Purchase Order and within the time stated in that Purchase Order and (to the extent then available) at the time of any request by the Purchaser given as part of acting under clause 7.1 and 7.2

8.2 Approval of engineering or other data by the Purchaser does not relieve the Supplier of its obligation to comply with Clause 8.1.

9 Insurance and Indemnities


9.1 The Supplier shall maintain at its own expense, all necessary insurance cover for the following liabilities:

(i) all events that may cause loss of or damage to property;

(ii) for injury to, or death of a person arising out of, or in course of, or by reason of the supply of Goods;

(iii) Public and Products Liability; and

(iv) Goods in Transit until delivery has occurred in accordance with the selected Incoterms 2010.

9.2 In addition to Clause 9.1, any insurance which the Supplier is by law obliged to affect, the Supplier shall procure and maintain at its own expense.

9.3 All Insurance will be taken out with a reputable insurance company with a rating of not less than A- or its equivalent. Purchaser may also require Supplier to take out any such other insurance policies taking into consideration the nature of Goods to be supplied.

9.4 To the extent permissible by law, the Supplier shall ensure that all insurances to be taken out pursuant to Clause 9.1, 9.2 and 9.3 and such other insurances which the Supplier considers necessary shall:

(a) Name Purchaser and its officers, employees and agents as additional insured;

(b) Include a cross liability Clause which includes a waiver by insurers or underwriters of all expressed or implied rights of subrogation against the Purchaser and its officers, employees and agents;

(c) Provide that all the provisions thereof, except the limits of liability, shall operate in the same manner as if there was a separate policy covering each insured; and

(d) Provide that the insurance cover shall not be adversely materially changed or cancelled without thirty (30) days prior notice in writing to the Supplier to do so. Should notice be given, the Supplier shall immediately advise the Purchaser before continuing with the supply of Goods under the Purchase Order.

9.5 The Supplier shall ensure that every subcontractor it engages pursuant to this Purchase Order carries similar policies of insurance.

9.6 The Supplier shall be liable for and shall indemnify and hold harmless the Purchaser, its employees, officers and agents against any liability, loss, claim or proceeding of whatever nature in respect of or arising out of any injury, loss or damage whatsoever:

(a) To any property and/or personnel insofar as such injury, loss or damage arises out of or in the course of the supply of Goods, including pollution;

(b) Arising under any legislation or at common law in respect of personal injury to or death of any person whomsoever in the course of the supply of Goods.

9.7 The Supplier shall, at the request of the Purchaser, provide certified copies of insurance policies, cover notes and certificates of currency to the Purchaser in respect of the insurances referred to in Clause 9.1,9.2 and 9.3 failing which, the Purchaser may affect such insurances. The premiums of the aforementioned insurance shall become a debt due and owing by the Supplier to the Purchaser.


9.8 The effecting and keeping in force of insurance as required by any part of this Clause 9 shall not in any way limit the responsibilities and obligations of the Supplier under other provisions of the Contract and in particular Clause 9.6 or at common law.

10 Licenses

10.1 Unless otherwise specified in this Purchase Order, the Supplier shall at its own expense obtain all requisite licences, permits that authorities may require in the performance of the Purchase Order and shall comply with all applicable legislation in relation to the supply of the Goods.

11 Patents, Trade Marks and Copyrights

11.1 The Supplier warrants to the Purchaser and its successors in interest that the manufacture, sale or use of the Goods will not infringe or contribute to the infringements of any patents, trademarks, designs, copyrights, or the disclosure of confidential information.

11.2 The Supplier shall indemnify the Purchaser and its successors in title against all actions, claims, demands, costs (including but not limited to legal costs), charges, damages and expense arising from or incurred by reason of any infringement of letters of patent, registered designs, trademarks, copyright or disclosure of confidential information resulting from the use, sale, intended use, and/or sale of the Goods.

12 Termination for default

12.1 If the Supplier:

(a) is a natural person or partnership including a natural person and if that person:

(i) presents his own petition for bankruptcy; or

(ii) is made bankrupt; or

(iii) makes a proposal for a scheme of arrangement or a composition; or

(iv) has a deed of assignment or a deed of arrangement made, accepts a composition, is required to present a debtor’s petition or has a sequestration order made under Part X of the Bankruptcy Act 1966, or

(b) is a corporation and:

(i) notice is given of a meeting of creditors with a view to the corporation entering a deed of company arrangement; or

(ii) it enters into a deed of company arrangement with creditors; or

(iii) a controller, administrator or receiver and / or receiver and manager is appointed; or

(iv) a winding up order is made in respect of that corporation; or

(v) it resolves by special resolution that it be wound up voluntarily (other than for the purpose of reconstruction);


then the Purchaser may at any time, without prejudice to any other rights or remedies it may have at law, in equity, or under statute and notwithstanding there has been no breach of Contract by written notice to the Supplier, specify it will not accept or pay for any undelivered Goods and shall not be obliged to make any payments therefore.

12.2 If the Supplier breaches any terms, conditions or warranties of this Purchase Order then the Purchaser may at any time by written notice to the Supplier, without prejudice to any other rights or remedies it may have at law, in equity or under statute, specify it will not accept or pay for any undelivered Goods and shall not be obliged to make any payments therefore and this Purchase Order will be considered to be terminated.

13 Cancellation and Suspension

13.1 The Purchaser reserves the right to cancel this Purchase Order if the full amount of all Goods ordered is not delivered within the time and/or at the place as specified in the Purchase Order.

13.2 If the Purchaser cancels the Purchase Order pursuant to Clause 13.1 then the Supplier shall:

(a) render harmless the Purchaser from any claim whatsoever at law, in equity or under statute against the Purchaser; and

(b) in addition to any other liability, pay the costs of removing the Goods from the Purchaser’s premises or from the place to which the Goods were delivered.

13.3 Notwithstanding Clause 12 and in addition to the general remedies in Clause 13, the Purchaser may, in its sole discretion and irrespective of whether there has been any default by either of the Parties, cancel this order for unshipped Goods by twenty four (24) hour written notice to the Supplier.

13.4 If the Purchase Order covers any standard stock Goods, the Purchaser shall only be obliged to pay for such Goods shipped prior to the notice of cancellation being given.

13.5 If the Purchase Order covers Goods manufactured or fabricated to specifications prepared by the Purchaser, then on receipt of a cancellation notice:

(a) the Supplier shall cease manufacture, supply or work in accordance with and to the extent required by the notice;

(b) the Supplier shall do everything possible to mitigate any cost after such cancellation;

(c) provided the Supplier is not in default, the Purchaser shall pay the Supplier:

(i) The costs incurred by the Supplier in connection with the Purchase Order prior to the date of cancellation, provided that such cost is reasonably proportional to the value of the Goods received or work done to the date of cancellation; and

(ii) Six percent (6%) of the foregoing cost in lieu of profit, provided that the total cancellation payment plus any previous payment shall not exceed the total price of the Purchaser Order.


13.6 Upon payment of any monies pursuant to this Clause, title to and property in any material or incomplete Goods paid for shall pass to the Purchaser. Risk in the said material shall remain with the Supplier until such a time as the Goods are taken into the actual possession of the Purchaser or otherwise delivered as stated in Clause 16.2 below.

13.7 The Purchaser shall be entitled to suspend the Goods to be supplied under the Purchase Order on written notice to the Supplier. Upon receipt of the suspension notice the Supplier must:

(a) immediately cease all work on the Goods;

(b) make all necessary arrangements with third parties to, comply with the suspension for the period at stated in the suspension notice (if any);

(c) preserve and maintain the Goods so as to be in a position to continue with the supply of the Goods at the conclusion of the suspension period;

(d) take all necessary steps to minimise the cost of the suspension; and

(e) provide a notice to the Purchaser, within two (2) days of the date of receipt of the Purchaser’s notice of suspension, setting out the cost of the suspension in a form as stipulated by the Purchaser (said costs to exclude all profits and any other overheads).

If no date for the end of the period of suspension is specified by the Purchaser, the Supplier must comply with the requirements of this Clause but instead provide details of costs under this subclause 13.7 (a) above, particularised as a running daily cost.

13.8 If the Goods to be supplied by the Supplier are:

(a) intended for use by the Purchaser under a contract with a third party; and/or

(b) the Purchaser provides a notice of suspension as a result of any suspension, termination or other events arising in relation to the third party contract;

the Supplier shall be limited in any subsequent claim, whether made under this Purchase Order, or at law, in equity or under statute, to the direct costs the Supplier incurred (which shall not include any office or administration overheads or allowance for profit) which can actually be claimed by the Purchaser from the third party and is paid by the third party to the Supplier.

13.9 If the notice of suspension given by the Purchaser is not given as a result of an event relating to a contract between the Purchaser and third party, then the Purchaser shall pay the actual cost (excluding any allowance for administrative or office overheads profit) of the Supplier for the period of the suspension, provided the Supplier complies with all requirements of the Purchaser as to verification of the costs. Any failure by the Supplier to comply with any request of the Purchaser in that respect shall be deemed to constitute a waiver by the Supplier of any and all rights to claim under the applicable suspension.

13.10 Nothing in Clauses 13.7, 13.8 and 13.9 above shall detract from any rights of cancellation or termination the Purchaser otherwise has under this agreement or to in any way restrict the right of the Purchaser to exercise rights of termination or cancellation during any period of suspension.


14 Packing Costs and Standards

14.1 The Supplier must ensure that all Goods are packed, marked and transported as specified in Exhibit 2 of the Purchase Order. If not specified, then all Goods must be suitably packed or otherwise prepared for transportation in accordance with the proper requirements of the carriers and so as to facilitate the securing of the lowest transportation and insurance rates.

14.2 The Supplier shall be liable for any difference in freight charges arising from its failure to:

(a) follow any transport instruction in the Purchase Order;

(b) properly describe the Goods transported; or

(c) suitably pack or otherwise prepare the Goods for transportation.

15 Installation

15.1 If the Supplier is required to be present at installation of the Goods or is required to supply Goods on or near premises specified by the Purchaser, then the Supplier acknowledges and agrees that:

(a) the Supplier shall supply all labour, tools, equipment, materials and such other things as may be necessary for the proper execution and completion of the supply of the Goods and for the proper performance by the Supplier of its obligations under the Purchase Order;

(b) the Supplier shall not impede or hinder work in progress by Purchaser or third parties;

(c) the Supplier, its workmen, agents, subcontractors, and invitees shall comply with all safety and other regulations applicable to the said premises and shall obey all instructions of the Purchaser, its manager, supervisor or authorised officer; and

(d) the Supplier supplies all work Goods the Purchase Order as an independent contractor.

16 Passing of Property and Risk

16.1 Title to and property in the Goods shall pass from the Supplier to the Purchaser free of all liens, charges, interests, encumbrances and security, of any type at the earliest of:

a) payment or any part payment for the Goods;- b) payment or part payment for any work done in the manufacture, fabrication or supply of

the Goods;- or c) acceptance by the Purchaser of the Goods.

16.2 The Purchaser is entitled to take physical possession of the Goods in respect of which title and property has passed under clause 16.1 and is granted an irrevocable licence to enter and remain on the Supplier’s premises (and the Supplier’s subcontractor’s premises) and to do all things necessary at those premises to be able to take physical possession of and remove the Goods. Notwithstanding the foregoing, the risk in the Goods remains with the Supplier until the latest of such time as the Goods are:

a) accepted, or taken by the Purchaser; and


b) delivered to the destination stated in the Purchase Order.

16.3 The Supplier shall not part with possession of the Goods or deliver them to any third party without the written consent of direction of the Purchaser except as required by any Court order which expressly applies to the Supplier.

16.4 In the event any third party seeks to obtain possession of the Goods the Supplier must comply with Clause 16.3 and immediately notify the Purchaser of the same, except to the extent required by any court order which applies to the Supplier.

16.5 In clause 16.1 references to payment or part payment include any written communication from the Purchaser to the Supplier which approves or accepts a liability of the Purchaser to make payment of an amount for the Goods, notwithstanding payment has not in fact been made at that time.

17 Personal Property Securities Act 2009 (Cth)

17.1 Supplier must promptly execute any documents and do all things (including obtaining consents and signing and producing documents) that Purchaser reasonably requires:

(a) to effect registration of this agreement or any other document on any register established pursuant to the Personal Property Securities Act 2009 (Cth) (“PPSA”);

(b) to ensure that this agreement is not void, voidable or otherwise unenforceable by the Purchaser in accordance with its terms;

(c) to ensure that this agreement has and maintains the priority in respect of Purchaser’s interest in the Goods that it is intended to have; and

(d) to effect, perfect or complete the provisions of this agreement or any transaction contemplated by it.

17.2 With respect to each security interest in collateral which this Purchase Order creates or provides for that is in favour of the Purchaser:

(a) Sections 94, 121(4), 125, 130, 132(3) (d), 132(4) and 135 are excluded to the extent permitted by section 115 of the PPSA; and

(b) The Supplier waives its rights under section 157 of the PPSA to receive notice in relation to any registration event (including notice of any verification statement) which relates to the collateral and is considered commercial property.

18 Warranties

18.1 The Supplier warrants that the Goods shall:

(a) conform to its description and specifications in the Purchase Order;

(b) be fit for the purpose for which the Goods of the same kind are commonly supplied and any other purpose made known to the Supplier;

(c) be of good merchantable quality and free from defects in materials and workmanship;


(d) be new (unless otherwise specified);

(e) be free from all legal equitable and statutory liens and encumbrances (including but not limited to any retention of title clauses in contracts with third parties); and

(f) the Supplier has good title thereto.

18.2 Unless otherwise stated, the Warranty Period in relation to the Goods shall expire twelve (12) months after the date of first placing the Goods into service or twenty four (24) months after the date of delivery of the Goods, whichever is first.

18.3 During the Warranty Period the Supplier shall at its own cost repair or replace any Goods defective as to design, materials or workmanship.

18.4 If the Supplier does not rectify the defects within a reasonable time (the reasonableness of the time to be determined in the sole discretion of the Purchaser), the Purchaser may carry out the replacement or repair and the costs of such replacement and repair shall become a debt due and payable on demand by the Supplier to the Purchaser.

18.5 Unless specified to the contrary in the Purchase Order, all Goods shall comply with the latest revision of the Standards or Codes issued by the Standards Association of Australia or any other standard specified in the Purchase Order.

18.6 These warranties are in addition to any other warranty specified in the Purchase Order or warranties implied by law including, but not limited to, standard trade, manufacturers or Purchaser specified assigned warranties.

19 Confidentiality

19.1 The Supplier shall keep secret and confidential and shall not disclose to any third party without the prior written consent of the Purchaser (except as required by compulsion of law) any engineering data, information, specifications, drawings, reports, accounts or other documents supplies or made available by the Purchaser to the Supplier on completion of the Purchase Order.

19.2 Unless otherwise provided in the Purchase Order all plan, drawings and specifications prepared or supplied by or on behalf of the Purchaser and any patents made thereof shall be, and remain the property of the Purchaser and shall be used by the Supplier only in performance of the Purchase Order. All such property shall be returned to the Purchaser by the Supplier on completion of the Purchase Order.

19.3 The obligation contained in Clause 18 shall survive the term or termination of the Purchase Order.

20 Governing Law and Jurisdiction

20.1 The law of the State of Western Australia shall be the proper law of and govern the Purchase Order and the parties hereby submit to the exclusive jurisdiction of the Courts of Western Australia provided however, that the Purchaser may take such proceedings as it sees fit in the Courts of any Country, State or Territory in which the Supplier is resident or where the Goods are being supplied from. The Supplier in such a case accepts and submits to the jurisdiction of the stated Courts.


21 Waiver

21.1 Failure of the Purchaser to exercise any of its rights under this Purchase Order shall in no way constitute a waiver of the said rights, nor shall such failure excuse the Supplier from any of its obligations under this Purchase Order.

22 Severance

22.1 If any term or provision of these conditions, or part thereof, is or becomes invalid for any reason, or unenforceable at law, the validity and enforceability of the remainder of these conditions shall be in no way affected thereby.

22.2 Further to the above, if any term or provision of this Purchase Order or a part thereof becomes invalid or unenforceable at law, it shall, to the extent necessary, be read down so as to be valid and enforceable.

23 Quality Management

23.1 The Supplier must abide by Purchasers Quality Assurance (QA) and Quality Control (QC) requirements for the provision of Goods procedure in accordance with the process specified in Exhibit 1.

24 Survival

24.1

Any provision of this Purchase Order which imposes an obligation after termination or expiration of this Purchase Order shall survive the termination or expiration of this Purchase Order.


25 Dispute Resolution

25.1 Any dispute between the Purchaser and the Supplier in connection with or arising out of the Purchase Order or any work related to the Goods shall be resolved by the means of the following procedure:

(a) the dispute shall initially be referred to representatives of each of the parties with authority to bind the party who shall, within fourteen (14) days of the dispute arising, discuss the matter in dispute and make all reasonable efforts to reach agreement.

(b) if no agreement is reached under clause 25.1(a), either party may commence litigation in the State of Western Australia.

(c) Notwithstanding the existence of a dispute, (including as to any alleged repudiation, breach or late payment) the parties shall continue to perform all obligations contained within this Purchase Order. This includes the Supplier’s obligation to continue with the supply of the Goods in accordance with the programme and on the terms of this Purchase Order including by taking all steps necessary to give effect to clauses 7, 8 and 16.

25.2 Clause 25.1 does not affect the right of a party to apply to a Court for an injunction to enforce its rights or for declaratory relief.


Exhibit 1

1 Quality Management

The Supplier shall be responsible for all QA and QC activities necessary to ensure that the Goods meet the requirements specified in the Purchase Order.

All requirements applicable to the Supplier shall also be applicable to its sub vendors / sub-contractors.

The Supplier shall establish and maintain a documented Quality Management System (QMS) based on ISO 9001:2008, Quality Management Systems – Requirements including Design Control if applicable.

Effective implementation of the Supplier’s QMS must be demonstrated to the Purchaser by any of the following means:

Certification by an accredited third party organisation

Satisfactory audit by a major client within the past three years

A proven and active internal audit program, management review and client satisfaction performance that meets the requirements of the nominated standard.

1.1. Quality Plan

The Supplier must submit a Quality Plan to Purchaser for approval, detailing the application of the Supplier’s QMS to the Goods. The plan must specifically detail how each element of the Quality Standard and the Purchase Order requirements is applied to the Goods and as a minimum must contain the following:

A system element outline

Supplier’s organisation chart applicable to supply of the Goods

The list of procedures for supply of the Goods applicable to each activity

The list of Inspection and Test Plans (ITPs) for the Goods and

A schedule identifying internal and external audits.

The Quality Plan must incorporate the requirements of the Purchase Order and must be available to management personnel engaged on the specified SOW.

1.2. Procedures

The Supplier shall submit procedures to Purchaser for approval when requested by Purchaser (i.e. via the Document and Data Submittal Requirements (DDSR)). Whether or not Purchaser approval is required, the Supplier shall ensure that copies of the procedures are made available to Purchaser, Purchaser’s representatives or Regulatory Authority as required.

The Supplier’s procedures shall address the system elements and activities appropriate to supply of the Goods and the specified Quality Standard.

1.3. Quality Audits

Purchaser may request an opportunity to audit the Supplier’s QMS at any time, including during the bid period. Purchaser reserves the right to perform audits, and/or participate as observers in Supplier audits throughout the supply of the Goods to verify compliance with the Purchase Order requirements. The Audit Team may include representatives from a Regulatory Authority. The


Supplier shall promptly correct any identified areas of non-conformance and address the underlying cause to prevent recurrence.

Notice to perform an audit will be given in writing by Purchaser. The Supplier must confirm its availability within ten (10) days of the scheduled audit date. The Supplier must correct promptly all findings not complying with the Quality Standard and the Purchase Order requirements.

The Supplier shall submit an internal audit schedule proposed for supply of the Goods for Purchaser’s approval prior to the commencement of supply of the Goods.

2 Sub Vendors / Sub Contractor

If deemed appropriate by the Supplier, or required by Purchaser, the Supplier may sub-contract services / work contained in the SOW raised under this Purchase Order to a sub vendor / subcontractor. However all sub vendors / sub-contractors must be evaluated and approved by Supplier in the first instance and Supplier must receive written approval from Purchaser before any supply of Goods is sub contracted.

In the event that part of the SOW is sub-contracted in accordance with the Purchase Order, the Supplier must ensure that all material terms, conditions and approvals binding the Supplier under this Purchase Order are contained in the sub-contract and are made binding on the sub vendor / subcontractor.

In the event that part of the SOW raised under this sub vendor / subcontractor is again sub-contracted, the Supplier shall remain fully responsible to Purchaser for the supply of the Goods in accordance with the standards required by, and the conditions contained in, this Purchase Order. This remains the case despite the fact that Purchaser may correspond and communicate directly with the sub vendor / subcontractor in relation to tasks required under a specific work scope, provided the Supplier is copied in on such correspondence.

3 Material Control and Traceability

The Supplier must employ adequate material control procedures to ensure that each different type, grade, size and/or batch/heat/serial number of material and/or component, including Purchaser supplied materials, remain identifiable until affixed to or incorporated into the Goods.

Traceability of materials, individual components and/or sub-assemblies must be carried out by means of hard stamping, indelible marking or other approved method, and supported by documented records. The Supplier must submit for the Purchaser’s approval, the method to be used, the identification system and the records to be maintained prior to commencing supply of the Goods.

Where codes, standards or regulations require the traceability of materials, welds, non-destructive testing (NDT), sub-assemblies, etc., the Supplier must identify such requirements and implement controls that will ensure they are satisfied.

4 Product Certification

Products supplied for the Goods must be of known quality and must carry certification as nominated in applicable specifications, codes and/or standards. Where no category of certification is nominated the level of certification supplied must be in accordance with that nominated in Attachment 2.


Where applicable, certification must be in accordance with ISO 10474 (or BS EN 10204) and must be fully identifiable by heat/batch number, markings or similar to the product or item to which it pertains and carrying sufficient information to verify that all requirements pertaining to the respective certificate classification, as shown in Table 1, have been fulfilled.

Within Australia, all certification for non-destructive and mechanical testing must be endorsed by a National Association of Testing Authorities (NATA) approved body or an alternative authority approved by Purchaser. Outside Australia, all certification for non-destructive and mechanical testing must be endorsed by an internationally recognised inspection and testing body, or alternatively, by an inspection and testing body recognised by government agencies or major industries within that country.

Certificates to be provided to Purchaser shall be the originals or legible first generation copies of the original certificate. Certificates that are accepted by Purchaser representative (shown by stamping and signing) shall be considered to have met these requirements. For all pressure containing components, original certificates, or as a minimum red stamped verified copies of material certificates, shall accompany the material or product.

Purchaser shall perform random examination of material certificates to check compliance with the technical specification and the Purchase Order.

The type of certificate required for each product or item shall be as indicated in the technical specification or Purchase Order. Where no requirement has been defined, the requirements given in Attachment 2 shall apply.

All data shall be shown in SI units, in accordance with the International System of Units (“SI”). Certificates shall be written in the English language and shall be complete, unambiguous, legible and suitable for electronic scanning. Certificates in other languages will only be accepted if they are supplied with an endorsed English translation by an authority acceptable to Purchaser.

Classified equipment shall be certified, by the licensing body, to the specified requirements.

TABLE 1: SUMMARY OF CERTIFICATE TYPES

Inspection &

Testing ¹ Document validated by

Type Description

Non Specific

² Specific

³ Manufacturer Independent Inspector 4

Regulatory Authority Purchaser 5

2.1 Certificate of Conformity ●

●

2.2 Test Report 6 ●

●

2.3 Specific Test Report

● ●

3.1A Inspection Certificate

●

●

3.1B Inspection Certificate

●

●

3.1C Inspection Certificate

●

●

3.2 Inspection Report

●

●

●

NOTES:


1. Inspection & testing carried out by the manufacturer to access the manufacturing process meets the requirements of the order.

2. Inspection & testing carried out by the manufacturer in accordance with its own procedures, products inspected and tested may not necessarily be products actually supplied.

3. Inspection & Testing carried out, before delivery, in accordance to technical requirements of the order, on products to be supplied, verifying conformance to the order.

4. “Independent inspector” means that the certificate is validated and issued by a department independent of the manufacturing department

5. For the purposes of Table 1, “Purchaser” means the authorised representative or agent validating the certificate on behalf of the purchasing organisation.

6. Test results supplied certifying compliance with the order based on non-specific² inspection and testing

4.1. Applying different editions of BS EN 10204.

The certification types nominated above shall conform to the definitions given in BS EN 10204 (1991 edition) (or DIN 50 049). Alternatively BS EN 10204 (2004 edition) may be applied, for those Suppliers that have made the transition to the 2004 edition.

The 2004 edition of BS EN 10204 revises the types of certificates that are to be provided. Where the 2004 edition of BS EN 10204 is applied, the following relationships shall be used to convert the required 1991 edition certificate type to the new 2004 certificate type.

1991 edition certificate type nominated in above table

2004 edition equivalent certificate type to be provided

2.1 2.1

2.2 2.2

3.1A 3.1

3.1B 3.1

3.1C 3.2

5 Inspection & Test Plans (ITPs)

5.1. Supplier Inspection & Test Plans

The Supplier must prepare and submit ITPs to Purchaser for approval for each element of the Goods.

The Supplier must not commence supply of the Goods prior to the approval of ITPs by Purchaser.

The format of ITPs may be at the discretion of the Supplier but must include or specify the following as a minimum:

Description of each operation

Description of each test, examination or inspection

Controlling specification or procedure

Acceptance criteria

Hold, Witness, Review, and Monitor Point requirements of the Supplier (or sub vendor / sub-contractor), the Purchaser, Certifying Authorities, Regulatory Authorities (e.g. ABS) and statutory authorities, where applicable. To enable the Purchaser and others to nominate their requirements, a column for each party needs to be available in the ITP.


Where the Supplier’s ITP does not meet the above requirements the Purchaser’s ITP template may be used.

The Supplier shall propose for review the full extent, type, and frequency and acceptance criteria of all Inspection and Test requirements detailed in the Purchase Order and its supporting documents.

The Supplier shall incorporate all Inspection and Test activities performed as part of the Supplier’s normal QC activities as well as those specified in the Purchase Order and supporting documents.

5.2. Inspection activity definitions

The following Definitions apply:

Hold – A Hold Point is an identified inspection point in the manufacturing cycle beyond which work must not proceed without the specified activity, document approval, work, or function being witnessed or verified by the Purchaser. The Supplier is responsible for notifying the Purchaser of approaching Hold Points within the required timeframe.

Witness – An inspection point in the manufacturing cycle which should be witnessed or verified by Purchaser or Supplier. However, such witnessing or verification is not a mandatory requirement and if Purchaser or the Supplier is unavailable, after receiving the required notice from the Supplier, the manufacture may proceed.

Review – The evaluation and analysis of records, methods, procedures and products to assure that specification requirements are met.

Monitor – An inspection point in the manufacturing cycle during which an activity, work, or function is observed. No formal notice is required to be given by Supplier other than a reliable schedule of activities (e.g. an Inspection & Test Plan).

6 Inspection by Purchaser and Others

The Purchaser will perform surveillance inspection at the Supplier’s, the sub vendor’s / sub contractor’s location of the Goods. The level of required inspection is determined from a risk and criticality assessment for the purchased Goods.

For example, products deemed to have critical quality characteristics may require the Purchaser to provide full time surveillance and to witness all inspections and tests nominated on the Supplier’s ITP. However, products with limited quality characteristics may only require the Purchaser to witness final inspection and tests or verify documentation.

6.1. Purchaser Inspection Levels

Level 4 Full time – continuous monitoring/inspection by inspector(s) at the Supplier’s place(s) of work, including review of documentation. This level is required for critical and frequent verification. The resident inspector will continuously monitor the work in progress, verify the Supplier’s Quality Plan and review documentation.

Level 3 Surveillance – ongoing monitoring of activities, in addition to activities defined in the Purchaser accepted ITP, including review of documentation. The frequency of visits will be in relation to the activity on the fabrication programs, and/or the history of quality of the Supplier’s performance and verify the Supplier’s Quality Plan.


Level 2 Specific – as defined in the Purchaser accepted ITP, including review of documentation. This level requires that the assigned Inspector visit the Supplier to inspect a limited number of predetermined verification points.

Level 1 Final – inspection prior to packing. Review of documentation and any special verification as defined. May include witness of final performance test. May include additional inspection of packing.

6.2. Inspection Protocol

Purchaser will formally notify Supplier of the inspection representative(s) and the relevant contact details. In response the Supplier must formally advise the Purchaser of the location of the Goods, the address and the person(s) representing the Supplier.

The Supplier must provide the Purchaser and/or its representative(s) formal notification of the witness and hold points nominated for its attendance.

Formal notification of witness and hold points, including final inspection and release (refer Section 6.4) is to be provided by the Supplier through completion of the Inspection and Release Notification Form. This form will be provided to the Supplier on issue of the Purchase Order.

Notification must allow sufficient time for the Purchaser and other representatives to arrange and travel to the site and shall not be less than 5 working days. Where the Purchaser has nominated a witness or hold point, an additional 7 working days’ notice (12 working days total) is required to enable the Purchaser to coordinator activities.

The Supplier must ensure access is given to Purchaser’s representative(s), certifying authorities, and statutory authorities to inspect the Goods and review procedure and quality records at its premises, the premises of sub vendors / subcontractors or at the location of the Goods.

While the Purchaser’s representative(s) is at the Supplier’s premises the Supplier must provide free of charge reasonable facilities including office space, a desk, chair and reasonable access to a telephone, a facsimile machine and email connection.

6.3. Pre-Inspection Meeting

A pre-inspection meeting with the Supplier must be held at the Supplier’s premises or at the location of the Goods to ensure that all requirements of the Purchase Order are understood and to discuss the implementation of the Quality Management requirements. The pre-inspection meeting should be held at the Supplier’s work (or place of manufacture sub-vendors / sub-contractors) when all relevant Supplier Purchase Orders and Specifications are available but before any manufacturing, by the Supplier, or its sub-vendors / sub-contractors, has commenced.

Pre-inspection meetings will be chaired and minuted by the Purchaser representative who will issue the agenda and notification of the Pre-Inspection Meeting (PIM) not less than ten (10) working days prior to the date of the meeting.

The Supplier’s representation at a pre-inspection meeting must include as a minimum the following:

Personnel responsible for quality control at shop floor level (product & senior production personnel;

Engineer


Personnel responsible for the order; and

Quality Manager (where applicable).

6.4. Inspection Release

At the successful completion of the supply of the Goods, either in total or in stages, the Purchaser’s representative will issue an Inspection Release Certificate (IRC). The issue of an IRC in no way relieves the Supplier of its obligations under the Purchase Order. The Supplier must ensure a copy of each IRC is attached to the delivery documentation and accompanies the Goods to the destination nominated by the Purchaser. Items delivered without a copy of the IRC may be subject to rejection by the Purchaser. For materials such as pipe, pipe fittings, structural materials and valves the relevant material certificates (not the entire Manufacturer’s Data Report) must accompany the IRC.

No final IRC shall be issued by the Purchaser’s representative in cases of incomplete supply, unresolved Non-Conformance Report (NCR) or any outstanding inspections/verifications, unless the specifically authorised to do so by Purchaser in writing. In this situation, the IRC report form shall identify any outstanding Goods at the time of release by attaching a punch list and referring to the punch list in the body of the IRC.

7 Non-Destructive Testing Companies and Personnel

NDT companies shall be certified to an acceptable Standard / Code to Purchaser as outlined in Exhibit 1, Attachment 1 where required. Evidence of current certification shall be submitted to the Purchaser representative for acceptance.

Operators shall be certified in accordance with an acceptable Certification Scheme for Welding and Inspection Personnel to Purchaser as outlined in Exhibit 1, Attachment 1 where applicable.

The Purchaser reserves the right to accept or reject proposed NDT operators regardless of certification or qualification levels.

NDT shall not take place until the Purchaser has reviewed and accepted the proposed testing service.

7.1. NDT Procedures

The Supplier shall submit NDT procedures to the Purchaser for acceptance prior to commencement of testing. Each procedure shall contain as a minimum the information required in the applicable NDT industry standard.

7.2. NDT Reports

NDT Reports shall contain all the information specified in the applicable industry standard and NDT procedure. All NDT reports issued in Australia shall be NATA endorsed. NDT reports shall be made available to the Purchaser’s representative for inspection.

8 Non-Conforming product

The Supplier must establish and maintain procedures to control products not meeting the specifications. The disposition of nonconforming materials must be recorded and reported to the Purchaser for approval, acceptance or rejection.


Purchaser’s non-conformances raised against Supplier or sub-vendors / sub-contractors supply shall be actioned and closed out in a timely manner, any delays resulting from a nonconforming product shall be considered as a breach of the Terms and Conditions and may be subject to penalties.

9 Quality Records

The Supplier must compile a Manufacturer’s Data Report (MDR) and Installation Operation and Maintenance (IOM’s) Manuals, unless otherwise specified, for the Goods and must include, as a minimum, those records indicated in the DDSR. The Goods, as defined in the Purchase Order, will not be considered complete until the Supplier’s quality records have been received and approved by the Purchaser.

Prior to compilation, the Supplier must submit the MDR/IOM index for Purchaser’s approval.

The MDR/IOM must be compiled progressively during the supply of the Goods and will be subject for review and endorsement by the Purchaser’s representative(s) on a progressive basis throughout the supply of the Goods.


Attachment 1 – Purchase Order specific Quality Instructions

Purchase Order No:

Description of Service:

Inspection Level for this contract is: Level 1, 2, 3 or 4


Attachment 2 – Minimum Certification Levels for Materials

The certification level for supplied materials shall be as specified in the Purchase Order. When not specified in Attachment 1 the below table details the minimum requirements.

Group Item Type Comments

Combustion gas turbines

High stress, high temperature components. 3.1B

All other parts Nil Note 1

Reciprocating compressors

Pressure containing parts. 3.1B

All non-pressure containing parts Nil Note 1

Centrifugal compressors

Pressure containing parts. 3.1B

Parts not in contact with compressed gas Nil Note1, Note 2

Parts in contact with compressed gas and rotating components.

3.1B Note 3

Impact tested parts. 3.1B Note 4

Main nuts and bolts. 3.1B

Reciprocating pumps

Pressure containing and impact tested parts 3.1B Note 5

All other components Nil Note 1

Centrifugal pumps Pressure containing and impact tested parts. 3.1B Note 5

Non-ferrous materials in non-hazardous and non-hydrocarbon services

Nil Note 1

Shafts and impellers 3.1B

Wear rings and shaft sleeves 3.1B

Process instrumentation

Electronic or electrical instruments for use in hazardous areas.

3.1A Hazardous area certification.

Pressure retaining components (including bolting) 3.1B

Other equipment Nil Note 6

Switch / control gear and electrical instruments

Certified electrical equipment for hazardous areas 3.1A Hazardous area certification

Electrical switchboards, electronic control panels, controllers, PLCs

3.1C Note 7

All other equipment Nil

Wires, cables and accessories

Certified electrical equipment for hazardous areas 3.1A Hazardous area certification.

Cable (high voltage) 2.1 >1000 volts

Cable (low-medium voltage) Nil < 1000 volts

Vessels Shell plates, heads and other pressure retaining components

3.1B

Internals not welded to pressure parts 2.2

Internal filters/pads etc. (non metallic) 2.2

Lifting lugs, tubes, internals, skirts and any non-pressure parts welded to pressure containing parts

3.1B

Flanges Carbon steel 3.1B

Stainless steel (304, 316L etc.) 3.1B

High alloy (inconel etc.) 3.1C

Applying different editions of BS EN 10204. – see 4.1


Notes to Attachment 2:

Certification type nil unless specified otherwise in technical specification or data sheets.

Diaphragms or bearing housing.

Shafts, impellors balance pistons, shaft sleeves, internal bolting.

Rotor shafts, impellors, shaft sleeves.

Where pumps are to be used in critical services, or if additional impact testing is specified for any pump materials then the Purchaser may require 3.1C certification.

Unless defined in the equipment data sheet.

Certification type 3.1C required for selected and critical items as deemed necessary by the Purchaser.

Including bursting test certificate.


Exhibit 2 Documentation and Packaging

1 Despatch Paperwork

1.1 Despatch paperwork must be legible.

1.2 All despatch paperwork and carrier’s consignment notes must show our designated Purchase Order Number.

1.3 All despatch paperwork and invoice must show line items in exact sequence of Purchase Order.

1.4 All despatch paperwork must show description, part number, quantity and stock number if applicable.

1.5 Each order must be invoiced separately (two or more orders per invoice is unacceptable). There must be one invoice only per order / consignment.

2 Carrier Consignment Notes

2.1 Carrier consignment notes must be correctly completed and show the following:

a) Receiver as stated on Purchase Order;

b) Freight payable by whom from point of original to delivery point;

c) Purchase Order Number;

d) Description (e.g. quantity pallets, cartons, package); and

e) Each consignment note is to have individual weight and dimensions.

3 Markings

3.1 All packages are to be addressed, marked and numbered to the delivery address stated on the Purchase Order.

For example:

AGC Industries Pty Ltd

15 Beach St

Kwinana Receivals Dock

Kwinana WA

Order Number *******

Number of packages ****

Package 1 of 2 (2 of 2 etc.)

3.2 Each package is to be marked with its own individual weight.


4 Packaging

4.1 Cardboard Cartons to be of good quality with net content weight not exceeding 25kg. Items exceeding 25kg must be packed in wooden crates. All cartons must be securely taped cross ways, top and bottom.

4.2 Wooden Crates / Boxes – LIGHT DUTY to be of good quality Pine timber with hardwood base and steel strengthening bands. Net content weight not to exceed 200kg.

4.3 Wooden Crates – HEAVY DUTY to be of good quality Pine timber with hardwood base and steel strengthening bands. Net content weight not to exceed 400kg.

4.4 Wooden Open Crates – HEAVY DUTY to be of good quality Pine timber with hardwood base and steel strengthening bands. Net content weight not to exceed 600kg.

4.5 Wooden Pallet Crates – EXTREME DUTY to be of good quality Pine timber with hardwood base and steel strengthening bands. Net content weight not to exceed 600kg.

4.6 Palletising – Pallets are to be of good quality and of suitable construction to withstand 2,000kg horizontal breaking force.

4.6.1 Pallets to be no greater than 1165mm x 1165mm in dimension.

4.6.2 Cartons packed on pallets must be fitted with a 6mm ply top and then shrink wrapped.

4.6.3 Plastic pails and tins are to have a piece of 6mm ply placed in between each layer plus a 6mm top ply and then shrink wrapped.

4.6.4 Packing of pallets containing pails / tins:

a) 4 Litre tins no more than 5 layers.

b) 10 litre tins no more than 3 layers.

c) 20 litre tins no more than 2 layers.

d) Above 20 litre single layer only.

e) Steel Drums are to be strapped together with steel strapping.

4.7 Bundling of Loose Items – for items such as steel pipe, steel shapes, timber etc. All items are to be segregated by length and size in packs not exceeding 2,000kg. Each pack to be single Purchase Order number and of one product type bundled with 25mm wide heavy duty steel strapping spaced at a maximum of 1,500mm intervals and have a minimum of two lengths of timber to a maximum dimension of 100mm x 50mm to form an integral base.

4.8 Dangerous Goods – All markings outside containers and packing shall be in accordance with the “AUSTRALIAN DANGEROUS GOODS CODE”. All packaging shall be in accordance with the aforementioned code.

Note: It is the responsibility of the Supplier to duly complete a Dangerous Goods declaration (DG’s), should you not be licensed to do so, the initial quotation response must so be noted prior to finalisation of tender.

All Goods delivered are to comply with the relevant Australian Standard.

purchase order terms and conditions - ausgroup€¦ · purchase order, the purchaser may, in its...

Documents