Exhibit 10.2
ALLIEDSIGNAL
SUPPLIER PARTNERING AGREEMENT
Agreement No. R20046, Rev. A (9/29/98)
This amended and restated Supplier Partnering Agreement ("Agreement") made and
entered into as of September 29, 1998, 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 , a Colorado Corporation (hereinafter referred to as
"Supplier" or "EFTC").
AlliedSignal and Supplier entered into that certain Supplier Partnering
Agreement dated July 15, 1997 (the Original Agreement) 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.
AlliedSignal and Supplier desire to modify the Original Agreement in certain
respects, and to restate the amended agreement in its entirety. Therefore, in
consideration of the mutual covenants set forth herein and for other valuable
consideration receipt of which is acknowledged, Supplier and AlliedSignal hereby
amend and restate the Original Agreement in its entirety as follows:
TERM OF AGREEMENT
The term of this Agreement shall commence on July 15, 1997 and , for AES Product
listed in Attachment 1, Appendix 1, shall end December 31, 2001. For EAS-FL and
EAS-KS product listed in Attachment 1, Appendix 1 the term of this Agreement
shall end December 31, 2002. Extensions of one (1) year duration shall be
negotiated 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 and AlliedSignal provides notice of
termination. 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 ss.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 covered by this Agreement
("Products") shall be the prices shown in Attachment 1.
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MOST FAVORED CUSTOMER
The Supplier warrants the prices for products purchased pursuant to 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 Xxxxxxxx Chief Financial Officer
AlliedSignal Inc. EFTC Corporation
One Technology Center. 6 th Floor
00000 X. 000xx Xx. Xxxxxxx Xxxxxxx
Xxxxxx, XX 00000 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:
- 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:
- On Time Delivery
- Price Reductions
- Benchmarking
- Lead Time Reduction to meet Benchmarks
- Statistical Process Control (SPC) in Critical Process Areas
- Be in compliance with documented plans to achieve:
- 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
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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.
- Delivery (as measured to initial contract date, 3 days early
and 0 days late) to be 100% on time.
- Product lead times on products to industry benchmark level of
(4) weeks.
- 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]1
- 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.
- Implement a quality system in compliance with:
- ISO-9002 or ISO-9001 if Supplier builds to own design, and
- PC-001 Process Control - Variation Reduction.
- A program to permit Electronic Data Interchange (EDI) with AlliedSignal
prior to year end 1999.
- Participate in early supplier involvement on AlliedSignal new product
development programs.
- 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 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
September 29, 1998.
EFTC Corporation AlliedSignal Inc.
By /s/Xxxxxx X. Xxxxxxxxxx By /s/ W. Xxxxxxx Xxxxxx
Name Name
Chief Financial Officer Transition Program Manager
Title Title
Enclosures: Attachment 1
EAS - LF Product
EAS - KS Product
EAS Product
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1 The portion of this agreement marked "*[TEXT REDACTED]" indicates that the
portion that has been omitted from this agreement and filed separately with the
Commission pursuant to a Confidential Treatment Request.
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