By accepting Area51-ESG, Inc.’s (Area51 Electronics) Purchase Order, the Seller (“Vendor”) accepts and agrees to the following requirements, where identified, on the purchase order.
Vendor acknowledges Area51 Electronics is a distributor to the Aerospace and Defense industry and understands the importance of product or service conformity, product safety, and workplace ethics and behavior.
2.1 Vendor shall ensure that only new and authentic parts are delivered. 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 Electronics 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 Electronics and accepted by Area51 Electronics’ customer. Area51 Electronics will not accept refurbished parts, reprogrammed parts, and parts with bent, formed, or oxidized leads, test dots, or test markings.
2.2 Vendor shall notify Area51 Electronics if the parts quoted or delivered to Area51 Electronics are from an independent distributor located in Asia, India, or Africa.
2.3 Vendor shall ensure that suspect counterfeit or counterfeit parts are not delivered to Area51 Electronics.
2.4 Vendor will not pre-screen lots and remove suspect counterfeit or counterfeit parts prior to third party inspection and/or testing and prior to delivery to Area51 Electronics.
2.5 Vendor and Area51 Electronics hereby agree that suspect counterfeit and counterfeit parts are defined as:
2.5.1 Suspect Counterfeit Part:A part for which there is objective, credible evidence indicating that the part is likely a Counterfeit Part.
2.5.2 Counterfeit Part:
2.5.2.1 An unauthorized (a) copy, (b) imitation, (c) substitute, or (d) modified part, which is knowingly, recklessly, or negligently misrepresented as a specified genuine part of an authorized manufacturer; or
2.5.2.2 A previously used electronic part which has been modified and is knowingly, recklessly, or negligently misrepresented as new without disclosure to the customer that it has been previously used.
2.6 The following results, reports, or documents can be used to determine suspect counterfeit or counterfeit products:
2.6.1 Area51 Electronics’ inspection and verification;
2.6.2 Responsible Test Lab test and inspection;
2.6.3 Area51 Electronics’ customer’s test and inspection;
2.6.4 U.S. Customs and Border Protection’s Letters.
2.7 Product Impoundment and Financial Responsibility:
2.7.1 Suspect counterfeit and counterfeit parts have no value and if it is later determined that suspect counterfeit or counterfeit parts were received by Area51 Electronics from the Vendor, then any contract terms limiting the Vendor’s liabilities and/or warranties shall be deemed unenforceable. Vendor and Area51 Electronics hereby agree that suspect counterfeit and counterfeit parts have no value and any contract documents establishing a transaction involving suspect counterfeit or counterfeit parts shall be declared null and void. As a result, Vendor and Area51 Electronics hereby agree that Area51 Electronics will not disburse or release monies; Area51 Electronics is entitled to an immediate refund of all monies paid by Area51 Electronics; and Area51 Electronics is entitled to an immediate refund of all monies paid by Area51 Electronics in escrow. .
2.7.2 Vendor has the right to agree with or dispute Area51 Electronics’ findings. Vendor and Area51 Electronics hereby agree that if the original component manufacturer (OCM) determines the suspect parts are authentic, then the decision is “final.” Vendor and Area51 Electronics hereby agree that if Area51 Electronics or a Responsible Test Lab chosen by Area51 Electronics determines that the parts supplied are suspect counterfeit or counterfeit, then the Vendor has the right to:.
2.7.2.1 Agree with Area51 Electronics’ findings and the transaction will be voided; or
2.7.2.2 Dispute Area51 Electronics’ findings by contracting with an Area51 Electronics and Vendor recognized Responsible Test Lab for further test verification.
2.7.3 Area51 Electronics’ Burden of Proof:Since any dispute between Area51 Electronics 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 Electronics to establish that the suspect parts are counterfeit shall be preponderance of the evidence, which means that Area51 Electronics must establish that it is more likely than not that the suspect parts are counterfeit.
2.7.4 Product Confiscation or Destruction:
2.7.4.1 If Vendor accepts Area51 Electronics’ findings and chooses to immediately void the transaction, the suspect parts will not be returned to Vendor unless and/or until a Responsible Test Lab agreed by both Vendor and Area51 Electronics determines that the parts are not suspect counterfeit or counterfeit. Area51 Electronics 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 Electronics that it was choosing to immediately void the transaction between them.
2.7.4.2 If Vendor exercises its right to have a Responsible Test Lab determine whether the suspect parts are counterfeit and the Responsible Test Lab 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 Electronics. If the suspect parts are determined to be suspect counterfeit or counterfeit by the Responsible Test Lab, then the Vendor of those parts shall be required to pay for all charges issued by the Responsible Test Lab. If, however, the suspect parts are determined not to be suspect counterfeit or counterfeit, then Area51 Electronics shall be required to pay all of the charges issued by the Responsible Test Lab. Area51 Electronics and Vendor agree that whether or not Vendor refunds all monies paid by Area51 Electronics, Area51 Electronics shall have the absolute right to reacquire possession of the subject parts from the Responsible Test Lab in order to prevent the subject parts from being offered for sale through any channel of distribution. In the event that Vendor pursues its external provider (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 Electronics.
2.7.4.3 If the Authority(ies) Having Jurisdiction and/or the OCM concur with the suspect counterfeit disposition, then destruction of evidence is only allowed once approval from those bodies has been granted. After destruction approval has been granted then Area51 Electronics 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 Electronics agree that Area51 Electronics shall have the absolute right to destroy the suspect parts after expiration of the applicable statute of limitations under the appropriate Authority (ies) Having Jurisdiction.
2.7.4.4 Notwithstanding the above, if the Vendor and Area51 Electronics 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. The cost of destruction is determined by the certified destruction company chosen by Area51 Electronics and all fees associated with the destruction shall be the responsibility of the Vendor.
2.7.5 Product Seizure: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 Electro nics with supply chain traceability and/or a test and inspection report(s) on the seized product.
2.7.6 Reporting:Area51 Electronics has the right and ethical responsibility to report suspect counterfeit or counterfeit parts to Data Reporting Centers (e.g., ERAI, GIDEP, etc.). Area51 Electronics will generate the report utilizing the form and format provided by the Data Reporting Center.
Vendor shall notify Area51 Electronics of any nonconforming processes, products, and services identified by the Vendor prior to shipment or after delivery to Area51 Electronics in a timely manner. The Vendor shall obtain Area51 Electronics’ approval for use or delivery of nonconforming processes, products, and services. Vendor and Area51 Electronics hereby agree that nonconforming products and services are defined as:
3.1 Material and/or service which do not conform to the requirements specified in the contract, purchase order, drawings, specifications, engineering, or other approved product descriptions. Nonconforming product also includes suspected
unapproved parts, unapproved parts, suspect counterfeit parts, counterfeit parts, customer returned product, and product unsuitable for use because of destructive testing.
4.1 Vendor shall notify Area51 Electronics and when required, obtain approval of changes in processes, products, and/or services, changes of external providers, and changes of manufacturing facility location when specified on the purchase order.
4.2 Vendor shall notify Area51 Electronics of changes in business ownership.
4.3 Vendor shall notify Area51 Electronics 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, when applicable.
Vendor shall flow down to its external providers and/or supply chain the following requirements, when applicable:
5.1 Area51 Electronics’ Purchase Order Quality Requirements (QSF-8.4-2);
5.2 Area51 Electronics’ Purchase Order Terms and Conditions; and
5.3 Area51 Electronics’ Purchase Order Requirements, including those of our customers as listed on our PO.
Vendor shall retain relevant documented information for a minimum of 10 years from completion of Area51 Electronics’ purchase order unless otherwise specified in the purchase order. Vendor shall dispose of relevant documented information in accordance with the purchase order and applicable statutory and regulatory requirements. If disposition requirements are not specified on the purchase order, the Vendor shall shred, erase, filter out, or archive (after the retention period) documented information in accordance with their procedures and applicable statutory and regulatory requirements. Documented information includes, but is not limited to, purchase orders, contractual agreements, invoices, competency and qualification certifications, calibration certificates, verification and/or validation activities, inspection and verification reports, certificates of conformance, nonconforming material reports, packing slips, supply chain traceability (including traceability documents from the vendor’s sub-tier external providers for all sub-components and sub-assemblies contained therein), product origin, product conformity, product acceptance, calibration reports, technical data (e.g., drawings, specifications, sampling plans, standards), and audit reports.
Vendor shall allow Area51 Electronics, Area51 Electronics’ customers, and/or regulatory authorities right of access to applicable areas of all facilities and all applicable documented information involved in the purchase order. Right of access is extended to all sub-tier external providers.
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, when applicable. Preservation of product shall also include, when applicable in accordance with product specifications and applicable statutory and regulatory requirements, the following:
8.1 Cleaning;
8.2 Prevention, detection, and removal of foreign object debris;
8.3 Special handling for sensitive products;
8.4 Marking and labeling including safety warnings;
8.5 Shelf life control and stock rotation; and
8.6 Special handling for hazardous materials.
Title: Purchase Order Quality Requirements
Document ID: QSF-8.4-2
Revision: 003
Revision Date: 07-11-2022
Effective Date: 07-29-2022
