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TRI-TECHNOLOGIES, INC.
TERMS AND CONDITIONS OF PURCHASE

1. Applicability
These terms and conditions are deemed to be incorporated into every purchase order issued by Tri-Technologies, Inc. ("Buyer") whether or not the purchase order makes specific reference to these terms and conditions. The term "Seller" as used herein means the party to whom Buyer has issued a purchase order. Acceptance of a purchase order issued by Buyer constitutes Seller's agreement to all of these terms and conditions, except to the extent that the face of the purchase order expressly provides to the contrary. The purchase order issued by Buyer, together with these terms and conditions, constitutes the entire and sole agreement between Buyer and Seller with respect to the goods or services referred to in the purchase order. Any terms or conditions proposed by Seller that are inconsistent with, or in addition to, the terms and conditions of purchase herein contained shall be void and of no effect. To be effective against Buyer, any modification of these terms and conditions, other than on the face of the purchase order, must be agreed to by an authorized representative of Buyer in a writing that makes specific reference to these terms and conditions. When used herein, the terms this "order," an "order" and "orders" refer to the purchase order that Buyer has issued to Seller, together with these terms and conditions.

2. Delivery; Notice of Labor Disputes or Other Excusable or Non-Excusable Delays
Unless otherwise stated in the purchase order, all goods will be shipped prepaid, F.O.B. destination, by least expensive common carrier or Seller's own vehicle. Time is and shall remain of the essence of this order. No acts of Buyer, including acceptance of late deliveries, shall constitute waiver of this provision. Buyer also reserves the right to refuse or return, at Seller's risk and expense, late shipments, or shipments made in excess of Buyer's orders or in advance of required schedules or (if such shipments are not refused or returned) to defer payment on such deliveries until scheduled delivery dates. Seller shall notify Buyer immediately, in writing, of any actual or potential labor dispute or other cause that delays or threatens to delay the timely performance of this order. In such event, Seller will update Buyer regarding delivery status from time to time, as necessary to fully inform Buyer of the status of all delays and the anticipated date of delivery. No such notice shall relieve or modify Seller's obligation to render timely performance in accordance with the terms of this order.

3. Termination; Breach of Contract; Damages
Buyer may, by notice in writing, cancel this order or direct Seller to discontinue work under this order in whole or in part at any time. Cancellation of any undelivered portion of this order by Buyer shall be accomplished by giving written notice to Seller. In the event of Seller's actual or anticipated default in the performance of this order, Seller agrees, in addition to and not in lieu of all other remedies available to Buyer, to deliver to Buyer upon demand all raw materials acquired by Seller in order to perform under this order and all work in process and Buyer may at its option (i) complete the work, deducting the cost of completion, and all damages resulting from Seller's default, from the price, or in the alternative, (ii) pay to Seller the cost of such raw materials and the fair value to Buyer, if any, of such work in process. In addition, Seller's insolvency or cessation of normal business operations, or the filing of a voluntary or involuntary petition in bankruptcy by or against Seller, or the making by Seller of an assignment for the benefit of its creditors, shall be a material breach of this order. In the event of any breach or anticipatory breach of this order, Buyer shall have, in addition to and not in lieu of any of the provisions of this order, any and all other rights and remedies that the law provides to Buyer for failure of the Seller to perform in accordance with the provisions of this order, including the right to recover all damages incurred or sustained by Buyer by reason of Seller's default. In no event shall Seller be entitled to lost or anticipatory profits, or to special or consequential damages. Failure of Buyer to enforce any if its rights under this order shall not constitute a waiver of such rights or of any other rights.

4. Buyer's Property
All specifications, drawings, tools, jigs, dies, fixtures, materials and other items supplied by Buyer or paid for by Buyer pursuant to the terms of this order shall be and remain the property of Buyer (or of the United States Government if such is the case) and Buyer shall have the right to enter Seller's premises and to remove them at any time without being guilty of trespass and without liability to Seller for damages of any sort. All such items shall be treated as confidential and proprietary to Buyer and shall be used only in the performance of work under this order, unless prior written consent has been given by an authorized representative of Buyer. Seller shall prominently mark all such items (or, if approved in writing by Buyer, the entire area in which items are located) as being the property of Buyer or the Government. Where applicable, Seller shall also mark such items with the corresponding drawing number and/or Government number. Seller shall be responsible for all such items until they have been delivered to Buyer. Seller shall not dispose of any such items (even though no longer being used), without Buyer's prior written consent. The provisions of this Section 4 hereinabove set forth shall survive delivery and payment for the goods or services referred to in this order, and shall remain in full force until all said items are delivered to Buyer or otherwise disposed of with Buyer's written consent. Such property shall be and remain free of all liens or claims by Seller or any third party, and Seller shall, without limitation as to time, indemnify and save Buyer harmless from and against all liens or claims that may be asserted against said property. Seller acknowledges that exposure to Buyer's proprietary design information will make it easier for Seller to manufacture parts that have the same form, fit and function as parts Seller manufactures for Buyer. As a result, Seller agrees and promises to notify Buyer in writing through Buyer's Purchasing Management and to obtain Buyer's written agreement, not to be unreasonably withheld, prior to manufacturing any parts for another entity that have the same form, fit and function as any parts Seller manufactures for Buyer (including any replacements or substitutes for any parts Seller manufactures for Buyer). The written notification shall describe the parts to be manufactured for the other entity and identify the corresponding parts Seller manufactures for Buyer. The written notification shall also provide Buyer with sufficient information to demonstrate, to Buyer's reasonable satisfaction, that any parts Seller plans to manufacture for another entity that have the same form, fit and function of any parts Seller manufactures for Buyer will be manufactured without reference to or use of Buyer's proprietary design information. Seller agrees that failure to comply with the above requirement shall create a presumption that Seller is misusing Buyer's proprietary design information and will cause Buyer irreparable harm. If, without obtaining Buyer's written agreement, Seller manufactures or sells for or to anyone other than Buyer any parts that have the same form, fit and function as any parts Seller manufactures for Buyer (including any replacements or substitutes for any parts Seller manufactures for Buyer) to which the presumption described in the immediately preceding clause applies, then Seller shall be in violation of this Agreement and Buyer shall be entitled to damages (including, but not limited to, injunctive relief and Buyer's lost profits on the manufacture or sale of such parts). Seller agrees and promises that those persons working for or at the direction of Seller who are exposed to Buyer's proprietary design information for Buyer's parts will have no involvement in the manufacture of parts with the same form, fit and function for any entity other than Buyer without prior written approval from Buyer. At any time following completion or termination of this order, Seller shall, at Seller's expense, make such disposition of all of Buyer's Proprietary Information as Buyer may direct. Seller shall remain and continue to be obligated to perform each and every provision of this Section 4 notwithstanding completion or termination of this order. Absent contrary instructions, Seller shall destroy all proprietary information one year after final delivery under this order unless required to be kept longer by law or contract or government requirement. Buyer shall have the right to audit all pertinent books and records of Seller, and to make reasonable inspection of Seller's premises, in order to verify compliance with this Section.

5. Subcontracting
None of the work under this order shall be subcontracted without the prior written consent of Buyer.

6. Specifications, Warranty, Inspection
Goods made in accordance with Buyer's specifications or drawings shall not be furnished or quoted to any other person or concern without the prior written consent of Buyer. In case of ambiguity in the specifications, drawings or other requirements of this order, Seller shall, before proceeding, consult Buyer, whose written interpretation shall be final. Seller warrants that all goods delivered or services rendered pursuant to this order shall be free of defects in workmanship, materials and design, and shall be in accordance in all respects with the design and, where applicable, the performance specifications, drawings and/or samples specified by Buyer. These warranties shall survive acceptance and payment. Seller shall be liable for and save Buyer harmless from any loss, damage or expense whatsoever that Buyer may suffer from breach of any of these written warranties. Buyer shall have the right to inspect all goods before and after delivery but no such inspection shall relieve Seller of any obligation pertaining to this order. In addition to all other rights and remedies available to it, Buyer may require Seller to replace rejected goods or Buyer may accept any goods that conform to Seller's warranties and upon discovery of goods not so conforming may reject or keep and rework any such goods not so conforming. Cost of rework, inspection, transportation, repackaging, and/or reinspection by Buyer shall be at Seller's expense. Seller, at its expense, shall provide and maintain an inspection system that complies with all specifications stated in this order or, in the absence of such specifications, an inspection system that is acceptable to Buyer. Seller shall maintain complete inspection records for all goods including, without limitation, the results of such inspections and the disposition of non-conforming or rejected goods.

7. Changes
Buyer shall have the right by written change order from time to time to make changes in the services rendered or the goods to be furnished by Seller hereunder. If such changes cause an increase or decrease in cost of the performance of this order, or in the time required for its performance, an equitable adjustment shall be negotiated and this order shall be modified in writing accordingly. Any claim by Seller for adjustment under this Section 7 must be asserted in writing within 30 days from the date of receipt by Seller of notification of the change and shall be followed as soon as practicable with specification of the amount claimed, together with supporting cost figures.

8. Assignment
Seller may not assign monies due or to become due under this order without the prior written consent of Buyer, except in the case of an accounts receivable financing arrangement secured by all or substantially all of Seller's accounts receivable. In any case, assigned accounts shall be subject to set off, recoupment, or other claim of Buyer against Seller, whether or not arising from this order.

9. Taxes
The prices stated on the face of the purchase order include all local, state and federal excises, sales and use taxes. All such taxes shall, when applicable, be separately identified on Seller's invoice.

10. Compliance with Law, Gratuities
Seller warrants that the goods to be furnished and the services to be rendered under this order shall be manufactured and sold in compliance with all relevant Federal, state, and local laws and regulations. In accepting this order, Seller represents and warrants that the goods and/or services to be furnished hereunder were or will be produced in compliance with the requirements of the Fair Labor Standards Act of 1938, as amended, and the Executive Orders and regulations issued pursuant thereto. Unless otherwise agreed in writing, Seller shall insert a certificate indicating such compliance on all invoices submitted in connection with this order. Seller warrants that it has not offered or given and will not offer or give to any employee, agent or representative of Buyer any money, service or thing of value with a view towards securing any business from Buyer or influencing such person with respect to the terms, conditions, or performance of any contract with, or order from, Buyer. Any breach of this warranty by Seller shall be a material breach by Seller of each and every contract between Buyer and Seller.

11. Export Control
Seller acknowledges that any technical data furnished by Buyer in connection with this order may be subject to U.S. export control laws, including but not limited to the Arms Export Control Act, 22 USC ยง 2778, (AECA) and the International Traffic in Arms Regulations, 22 CFR 120-130, (ITAR) promulgated pursuant thereto. In this regard, Seller agrees that, unless it has obtained prior written consent from an authorized employee or representative of Buyer, and unless prior written authorization is obtained from the U.S. Department of State, Directorate of Defense Trade Control (DDTC), it will not export, reexport, or transship, directly or indirectly, the goods, documentation, technical assistance, or any media in which any of the foregoing is contained, or other technology provided hereunder or the direct product thereof, to any country or to any non-U.S. citizen. As required by the AECA and the ITAR, all manufacturers, exporters and brokers of defense articles, defense services or related technical data, as defined on the U.S. Munitions List, are required to register with the DDTC, and if Seller is engaged in the United States in such activities, Seller represents that it is registered with the DDTC, as may be required under 22 CFR 122.1 of the ITAR and, that it maintains an effective export/import compliance program in accordance with DDTC guidelines.

12. Suspension and Debarment
Seller shall notify Buyer in writing at the earliest practicable time and, at Buyer's request, shall promptly meet with Buyer, if Seller (a) is suspended, debarred, or proposed for suspension or debarment from doing business with the U.S. Government, or (b) is listed or proposed to be listed by the U.S. Government for U.S. export administration purposes in any "denial orders," as a "blocked person," as a "specially designated national," or as a "specially designated terrorist" by the U.S. Department of Commerce, Bureau of Industry and Security, (collectively, "Debarment"). Seller shall indemnify and hold Buyer harmless against any and all loss or damage suffered by Buyer as a result of Seller's actual or prospective Debarment.

13. Patents
Seller warrants that the sale, use or incorporation into manufactured products of all machines, devices and materials sold to Buyer hereunder which are not of Buyer's design, composition or manufacture shall be free and clear of infringement of any patent, copyright, trademark or other proprietary claim of Seller or any third party. Seller shall defend, indemnify and hold Buyer and its customers harmless from any and all expenses, liabilities and loss of any kind, including attorneys' fees, growing out of any claim, suit or action alleging such infringement, which claim, suit or action Seller agrees to defend at its own expense. Buyer shall be free to obtain its own counsel in any such instance and, if Buyer does so, Seller shall be obligated to reimburse Buyer for all attorneys' reasonably incurred by Buyer to defend itself as a result of any claim against Buyer or a customer of Buyer contemplated by this Section 13.

14. Indemnity Against Claims
Seller shall defend, indemnify and hold Buyer harmless against all losses on account of claims of injury to persons (including death) or damage to property which may result in any way from any act or omission of Seller or of its agents, employees or subcontractors. Seller shall also maintain such Public Liability, Property Damage, Employee's Liability and Compensation insurance and Motor Vehicle Liability insurance (Personal Injury and Property Damage), as will protect Seller (and its permitted subcontractors) and Buyer from said risk and from any claims under any applicable Workers' Compensation or Occupational Health and Safety statute or regulation.

15. Stop-Work Order
A. Buyer may, at any time, by written order to Seller, require Seller to temporarily stop all, or any part, of the work called for by this order for a period of up to 90 days after the stop-work order is delivered to Seller, and for any further period beyond 90 days to which the parties may agree. Upon receipt thereof, Seller shall forthwith comply with its terms and take all reasonable steps to minimize the incurrence of cost allocable to the work covered by the stop-work order during the period of work stoppage. Within said period or any extension thereof, Buyer shall either (1) cancel the stop-work order, or (2) terminate the work covered by such order as provided in Section 3 above.
B. If the stop-work order is cancelled or the period of such order or any extension thereof expires, Seller shall resume work. Buyer shall make an equitable adjustment in the delivery schedule or contract price or both, and this order shall be modified in writing accordingly, if (1) the stop-work order results in an increase in the time required for, or Seller's cost properly allocable to, the performance of any part of this order, and (2) Seller asserts a claim for such adjustment within 25 days after the end of the period of the work stoppage.
C. If a stop-work order is not canceled and work covered by such order is terminated for convenience, the reasonable costs resulting from the stop-work order shall be allowed in arriving at the termination settlement.

16. Applicable Law
This order is to be governed by, construed and enforced in accordance with the laws of the State of New York, without regard to its conflicts of laws rules and principles.

US GOVERNMENT CONTRACT PROVISIONS

When the goods furnished are for use in connection with a United States Government ("Government") contract or subcontract (as indicated on the face of the purchase order), the additional provisions set forth hereinafter shall apply, in addition to the above provisions.

17. Inspection
The Seller shall provide and maintain an inspection system acceptable to the Government for goods and services covered by this order and shall be in accordance with FAR 52.246-2. Materials to be used in the performance of Government contracts may be inspected and tested by Buyer or by the Government agency concerned at all reasonable times and places either before, during, or after manufacture at Buyer's direction. If inspection and test are made on the premises of Seller or Seller's subcontractor, Seller shall furnish without additional charge all reasonable facilities and assistance for the safe and convenient inspection and tests required by the inspectors and the performance of their duty. The foregoing provisions of this Section 17 are supplementary to and not in lieu of or in derogation of the provisions of Section 6 above.

18. Annual Supplier Certification
Seller shall sign, date and promptly return to Buyer an Annual Supplier Certification furnished by Buyer that certifies Seller's compliance with certain requirements under the Federal Acquisition Regulations (FAR) and/or Defense Federal Acquisition Supplement (DFARS), in effect as of the date of this order.

19. Incorporated FAR and DFARS Clauses
The following clauses set forth in the FAR or DFARS, as in effect as of the date of this order, are hereby incorporated herein by reference, provided that clauses identified as being applicable to orders in excess of a specified value apply only to such orders:

NUMBER

FAR/DFARS CLAUSE/TITLE

ALL ORDERS


52.202-1

Definitions

52.203-2

Certificate of Independent Price Determination

52.204-2

Security Requirements

52.204-5

Women Owned Business (Other than Small Business)

52.209-5

Certification Regarding Debarment, Suspension, Proposed Debarment and Other Responsibility Matter

52.211-5

Material Requirement

52.211-14

Notice of Priority Rating for Natioanl Defense Use

52.211-15

Defense Priority and Allocation Requirements

52.215-10

Price Reduction for Defective Cost or Pricing Data

52.215-11

Price Reduction for Defective Cost or Pricing Data-Modifications

52.215-12

Subcontractor Cost or Pricing Data

52.215-13

Subcontractor Cost or Pricing Data Modifications

52.215-14

Integrity of Unit Prices - Alternative I

52.215-15

Pension Adjustments and Asset Reversions

52.215-20

Requirements for Cost or Pricing Data or Information Other than Cost or Pricing Data (Alternate II)

52.217-6

Option for Increased Quantity

52.219-1

Small BusinessProgram Representative (Alternate)

52.222-25

Affirmative Action Compliance

52.223-3

Hazardous Material Identification and Material Safety Data

52.223-6

Drug Free Workplace

52.223-11

Ozone-Depleting Substances

52.224-2

Privacy Act

52.227-1

Authorization and Consent

52.227-4575

Disposition of Drawings and Specifications

52.227-4576

M16 License Agreement Requirement

52.227-9I01

Rights Guard

52.227-9I03

Disposition of Drawings and Specifications

52.227-9I04

Demilitarization - Small Arms Weapons and Parts and Accessories (Category I - Munitions List Items)

52.227-9I05

M16 License Agreement Requirement

52.229-3

Federal, State and Local Taxes

52.229-4

Federal, State and Local Taxes (Non Competitive Contract)

52.229-5

Taxes-Contracts Performed in U.S. Possessions or Puerto Rico

52.242-2

Production Progress Reports

52.242-4

Certification of Final Indirect Costs

52.243-1

Changes-Fixed Price

52.244-6

Subcontracts for Commercial Items

52.245-1

Government Property (Fixed-Price Contracts)

52.245-4500

Demil and Trade Security Control Requirements and Procedures

52.246-23

Limitation of Liability

52.246-4528

Rework and Repair of Nonconforming Material

52.247-63

Preference for U.S.-Flag Air Carriers

52.247-64

Preference for Privately Owned U.S.-Flag Commercial Vessels

52.249-1

Termination for Convenience of the Government (Fixed Price) (Short form)

52.249-2

Termination for Convenience of the Government (Fixed Price)

52.249-8

Default (Fixed Price Supply and Service)

252.204-7000

Disclosure of Information

252.204-7001

Disclosure of Ownership or Control by the Government of a Terrorist Country

252.204-7003

Control of Government Personnel Work Product

252.209-7004

Subcontracting with Firms that are owned or controlled by the Government of a Terrorist Country

252.217-7026

Identification of Sources of Supply

252.223-7001

Hazard Warning Labels

252.223-7002

Safety Precautions for Ammunition and Explosives

252.223-7003

Change in Place of Performance - Ammunition and Explosives

252.223-7007

Safeguarding Sensitive Conventional Arms Ammunition and Explosives

252.225-7001

Buy America Act and Balance of Payments Program

252.225-7002

Qualifying Country Sources as Subcontractors

252.225-7003

Report of Intended Performance Outside the United States

252.225-7007

Buy America Act - Trade Agreements - Balance of Payments Programs

252.225-7012

Preference for Certain Domestic Commodities

252.225-7013

Duty-Free Entry

252.225-7014

Preference for Domestic Speciality Metals (Alternate I)

252.225-7025

Restriction on Acquisition of Forgings

252.225-7031

Secondary Arab Boycott of Israel

252.227-7013

Rights in Technical Data-Noncommercial Items

252.242-7004

Material Management and Accounting System

252.243-7001

Pricing of Contract Modifications

252.244-7000

Subcontracts for Commercial Items and Commercial Components DoD Components

252.247-7022

Representative of Extent of Transportation by Sea

252.203-7002

Display of DOD Hotline Poster

252.211-7005

Substitutions of Military or Federal Specifications and Standards

252.251-7000

Ordering from Government Supply sources

52.215-2

Audit and Records



APPLICABLE WHEN ORDER IS GREATER THAN $2,500


52.203-3

Gratuities

52.203-5

Covenant Against Contingent Fees

52.203-8

Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity

52.203-10

Price or Fee Adjustment for Illegal or Improper Activity

52.222-3

Convict Labor

52.222-19

Child Labor - Cooperation with Authorities and Remedies

52.222-39

Notification of Employee Rights Concerning Payment of Union Dues or Fees

52.225-13

Restrictions on Certain Foreign Purchases

52.227-2

Notice and Assistance Regarding Patent and Copyright Infringement

52.242.13

Bankruptcy

52.244-2

Subcontracts

52.244-2

Subcontracts (Alternate I)

52.244-5

Competition in Subcontracting

52.246-2

Inspection of Supplies - Fixed Price

52.246-4

Inspection of Services - Fixed Price

52.246-11

Higher Level Contract Quality Requirement

252.203-7001

Prohibition on Persons Convicted of Fraud or Other Defense Contract Related Felonies

252.247-7023

Transportation of Supplies by Sea

252.247-7024

Notification of Transportation of Supplies by Sea



APPLICABLE WHEN ORDER IS GREATER THAN $10,000


52.222-20

Walsh-Healy Public Contracts Act

52.222-21

Prohibition of Segregated Facilities

52.222-22

Previous Contracts & Compliance Report

52.222-26

Equal Opportunity

52.222-36

Affirmative Action for Workers with Disabilities



APPLICABLE WHEN ORDER IS GREATER THAN $25,000


52.209-6

Protecting the Government's Interest When Subcontracting with Contractors Debarred, Suspended or Proposed for Debarment

52.222-35

Equal Opportunity for Special Disabled Veterans of the Vietnam Era and Other Eligable Veterans

52.222-37

Employment Reports for Disabled Veterans and veterans of the Vietnam Era and Other Eligable Veterans



APPLICABLE WHEN ORDER IS GREATER THAN $100,000


52.203-6

Restrictions on Subcontractor Sales to Government

52.203-7

Anti-kickback Procedures

52.203-11

Certification & Disclosure Regarding Payments to Influence Certain Federal Transactions

52.203-12

Limitation on Payments to Influence Certain Federal Transactions

52.246-24

Limitation of Liability - High Value Item

52.248-1

Value Engineering

252.209-7000

Acquisitions from Subcontractors Subject to On-site Inspection Under the Intermediate Range Nuclear Forces Treaty



APPLICABLE WHEN ORDER IS GREATER THAN $100,000 AND SELLER IS A LARGE BUSINESS


52.219-8

Utilization of Small Business Concerns



APPLICABLE WHEN ORDER IS GREATER THAN $10,000,000


52.222-24

Preaward On-Site Equal Opportunity Compliance Evaluation


The foregoing FAR and DFARS clauses are hereby made applicable to this order pursuant to the requirements of the government contract or subcontract underlying this order and are incorporated into this order by reference as if given in full text, subject to the following definitions, which will have the meanings indicated in each of the following FAR and DFARS clauses, unless the context indicates otherwise:
  1. "Contract" means this order.
  2. "Contractor" means Seller.
  3. "Contracting Officer" means Buyer.
  4. "Government" means Buyer.
  5. "Subcontractor" means Seller.
  6. "Supplies" means Goods

The full text of FAR and DFARS clauses may be accessed electronically at the following Internet websites:


 
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