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SUPPLIER PARTNERING AGREEMENT PAGE 1 OF 4
ALLIEDSIGNAL AEROSPACE
SUPPLIER PARTNERING AGREEMENT
Agreement No. R20046
This agreement made and entered into as of July 15, 1997, written by and
between AlliedSignal Inc., a Delaware Corporation, acting on behalf of its
various divisions and subsidiaries (hereinafter collectively referred to as
AlliedSignal) having its principal offices at Xxxxxxxx Xxxx xxx Xxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000 and EFTC Corporation (EFTC), a Colorado
Corporation (hereinafter referred to as Supplier).
This agreement is entered into with the purpose of establishing a long term
relationship based on a continuous improvement process leading toward world
class benchmarks in quality, cost, delivery, technology and service and shall
be characterized by mutually beneficial goals, trust and benefits.
It is agreed and understood by Supplier and AlliedSignal that:
TERM OF AGREEMENT
The term of this agreement shall commence on July 15, 1997 and shall run for
the period of four (4) years from January 1, 1998 with automatic extensions of
successive one (1) year duration unless a) either Party informs the other in
writing one year in advance of their desire to terminate or, b) Supplier, at
the reasonable determination of AlliedSignal, fails to maintain competitive
quality, delivery and cost performance as specified herein in which case
AlliedSignal shall provide reasonable notice. Releases will be by the using
business unit(s) on individual purchase orders.
THIRD PARTY SALES
Supplier agrees not to sell to any third party (except the United States
Government) any items covered by this contract for which the sole known
application is for use in any aircraft product unless Supplier or its customer
has obtained from the FAA either a Type Certificate, Technical Standard Order
Approval or Parts Manufacturing Approval (PMA) pursuant to Section 21.303 of
the Federal Aviation Regulations, covering said items. In no event shall
Supplier use any information or tooling provided by AlliedSignal for the
purpose of manufacturing and/or repairing the product for sale to any such
third party, except as provided in the terms and conditions of the individual
purchase orders issued, or as otherwise agreed in writing by the Parties.
TERMS AND CONDITIONS
Standard Form GP/FFP (1/97), General Purchase Order Provisions, is included in
this agreement by reference but may be modified as necessary for specific
business unit transactions. Any future revisions to these provisions will
occur through business unit transactions. In the event of a conflict between
the terms and conditions of an AlliedSignal issued purchase order and those
appearing in this Agreement, the terms and conditions of this Agreement shall
prevail.
Payment terms NET 45 unless otherwise indicated.
PRICING
Wherever applicable, the prices for Products shall be the prices shown in
Attachment I.
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SUPPLIER PARTNERING AGREEMENT PAGE 2 OF 4
MOST FAVORED CUSTOMER
The Supplier warrants the prices shown in this Agreement are no higher than
those which would be charged other customers or the United States Government in
similar transactions.
USE OF ALLIEDSIGNAL AGREEMENTS
Supplier agrees that any products, materials, or services acquired under the
provisions of AlliedSignal agreements with other suppliers will be for the sole
use of Supplier in the manufacturing process, and will not be for resale to any
party other than an AlliedSignal business unit or subsidiary unless otherwise
agreed by the Parties in writing.
COMMUNICATION
Periodic program reviews will be conducted in a timely manner between
AlliedSignal and Supplier to facilitate future partnering arrangements using
guidelines established below. In addition, AlliedSignal shall inform Supplier
of its planned production rates for the product(s) and derivative(s) to
facilitate production planning.
Every notice under this Agreement shall be given in writing to the following
address:
ALLIEDSIGNAL SUPPLIER
------------ --------
XXXX XXXXXX CHIEF ADMINISTRATION OFFICER
ALLIEDSIGNAL AEROSPACE EFTC CORPORATION
000 X. XXXXXX XX. 0 XX XXXXX
XXXXXX, XX 00000-0000 HORIZON TERRACE
0000 XXXXX XX.
XXXXXX, XX 00000
F.A.R. REQUIREMENTS
Individual purchase orders may be subject to regulations under United States
Government Contracts. In such a case, Supplier will accept the inclusion of
Standard Form SP/FFP (9/96), Supplemental Purchase Order Provisions under U.S.
Government Contracts (and successor forms as required by U.S. Government
regulations) in such purchase orders. Any future revisions to these provisions
will occur through business unit transactions.
SHIPMENTS
Mode of transportation and carrier are to be in accordance with business unit
purchase order instructions. In case of domestic shipment, terms of purchase
shall ordinarily by FOB Origin, collect. International shipments shall
ordinarily use INCOTERMS FCA (shipping point). In the absence of shipping
instructions or for clarification contact Aerospace Transportation.
SUPPLIER AGREES TO:
o Have in place or be actively implementing a JIT (Just In Time) program
which incorporates measurements and reporting ability in quality control and
improvement process. These areas include, but are not limited to:
x
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SUPPLIER PARTNERING AGREEMENT PAGE 3 OF 4
x
o On Time Delivery
o Price Reductions
o Benchmarking
o Lead Time Reduction to meet Benchmarks
o Statistical Process Control (SPC) in Critical Process
Areas
x
o Be in compliance with documented plans to achieve:
x
o Quality: Achieve 50% reduction in quality defects
year over year with a goal to achieve industry benchmark
levels. A quality level shall be developed during the first
six months of operations. Achieve increasing levels of Proven
Quality Supplier (PQS) to reduce and eliminate ASA
over-inspection and enable increasing percentage of Direct
Line Delivery (DLD). Quality performance objective is no line
fallout during processing at AlliedSignal with no ASA
over-inspection required.
o Delivery (as measured to initial contract date, 3
days early and 0 days late) to be 100% on time.
o Product lead times on products to industry benchmark
level of (4) weeks
o Cost productivity improvement of 6% year over year
on price with a goal of 8% to include 2% in productivity
improvement through dock to stock, quality improvements, etc.
*[TEXT REDACTED]
x
o Have in place a documented continuous improvement strategy for product
quality, cost, delivery and service. Participate in AlliedSignal
training and On-site Supplier Development (OSD) programs as
appropriate to supplement Supplier's own continuous improvement
efforts.
x
o Implement a quality system in compliance with:
o ISO-9002 OR ISO-9001 if Supplier builds to own design
o PC-001 Process Control - Variation Reduction
o A program to permit Electronic Data Interchange (EDI) with
AlliedSignal prior to year end 1997.
o Participate in early supplier involvement on AlliedSignal new product
development programs.
o Meet with AlliedSignal on a regular basis to review programs,
performance measurements and barriers to progress and to review
appropriate corrective action to eliminate barriers.
The parties recognize that AlliedSignal reserves the right to have specific
part number products covered by this Agreement manufactured in its own
facilities. In addition, AlliedSignal may have requirements in its contracts
with specific customers, such as offset requirements and directed sources, to
purchase certain material from sources other than Supplier, which right is also
reserved by AlliedSignal. In the event of such a determination or requirement,
the parties agree to use their best efforts to find and add to this
-------------------------
The portion of this agreement marked "*[TEXT REDACTED]" indicates that
the portion has been omitted from this agreement and filed separately with the
Commission pursuant to a Confidential Treatment Request.
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SUPPLIER PARTNERING AGREEMENT PAGE 4 OF 4
Agreement alternative part numbers having the same total dollar value as the
covered part numbers being manufactured by AlliedSignal or purchased from other
sources.
This Agreement plus those additional terms or conditions incorporated herein by
reference which appear in Attachment I attached hereto and made a part hereof,
constitutes the entire Agreement between the Parties with respect to the
matters contained herein. No modification of the Agreement or waiver or
addition to any of its terms and conditions shall be binding upon either Party
unless made in writing and signed by the Parties' authorized representatives.
Supplier will honor terms of this Agreement with any AlliedSignal entity or
supplier designated by AlliedSignal.
In witness whereof the Parties hereto have caused this Agreement to be
executed July 15, 1997.
EFTC CORPORATION ALLIEDSIGNAL AEROSPACE
By /s/ Xxxxxx Xxxxxxxxxx By /s/ Xxx Xxxxxx
------------------------ -------------
NAME NAME
Chief Financial Officer Subcontracts Program Manager
TITLE TITLE
Enclosures: Attachment 1
Appendix 1
AES Product
Appendix 2
Responsibilities of Each Party
