THIS SUPPLIER QUALITY AGREEMENT (“AGREEMENT”) IS BY AND BETWEEN THE HID ENTITY PLACING AN ORDER WITH SUPPLIER (“HID”) AND SUPPLIER (“SUPPLIER”), EACH HEREINAFTER REFERRED TO INDIVIDUALLY AS A “PARTY” AND COLLECTIVELY AS THE “PARTIES.” UNLESS A SEPARATE WRITTEN AGREEMENT IS CURRENTLY IN FORCE BETWEEN SUPPLIER AND HID WITH RESPECT TO THE SUBJECT MATTER SET FORTH HEREIN, THIS AGREEMENT WILL APPLY TO ANY DELIVERABLES, AS FURTHER DEFINED HEREIN, PURCHASED BY HID.
1. Scope
The Agreement defines the terms and conditions relating to the quality of any goods, services, or other materials (collectively, “Deliverables”) to be provided by Supplier to HID.
2. Applicable Standards
Supplier shall, at its sole cost and expense, employ best efforts to obtain third-party certification in accordance with the latest version of the following standards or their equivalents (“Standards”):
- ISO 9001 - Quality Management System
- ISO 14001 - Environmental Management System
HID may change the Standards upon notice to Supplier at its sole discretion. Supplier must either be compliant with the Standards or be able to demonstrate that it meets requirements at least as stringent as those provided for under the Standards. Supplier’s obligations under this Section shall continue for as long as it continues to provide Deliverables to HID.
3. Quality Requirements
3.1 Quality Management System (“QMS”)
Supplier will immediately inform HID in writing of any changes to Supplier’s QMS or related certifications, including new certification, re-certification or certification withdrawal. Upon request, Supplier will promptly provide HID with copies of documentation evidencing quality approvals or certifications for the Deliverables and/or Supplier facilities.
3.2 Specifications
Unless otherwise agreed to by an authorized representative of HID, HID shall define the specifications for the Deliverables in an applicable purchase order or like document for the Deliverables (“Purchase Order”), and Supplier shall produce the Deliverables in accordance with such HID specifications. Specifications may include, without limitation, drawings, references to commercial specifications and identification of applicable standards. Where an authorized representative of HID has agreed to Supplier specifications in writing, Supplier shall also provide applicable performance data for the Deliverables. If HID requests a customized Deliverable from Supplier, an authorized representative of HID must provide written approval of the customized specifications prior to production.
3.3 Certificate of Conformance
Supplier agrees to provide HID with a signed Certificate of Conformance for each shipment of hardware and/or software, which includes, without limitation: (i) itemization of the Deliverables or processes to be supplied to HID under the applicable Purchase Order, (ii) confirmation that the Deliverables conform to HID specifications, and (iii) any applicable product environmental compliance standard (e.g. RoHS, REACH, TSCA).
3.4 Supplier Warranties
Supplier represents and warrants that the Deliverables:
- Will be free from defects in materials, workmanship and design, and will not contain any counterfeit parts; and
- Are supplied in accordance with HID specifications, drawings and other written instructions provided to Supplier by HID with the Purchase Order.
In addition, Supplier represents and warrants that any supplied services will be performed in a good and workmanlike manner by knowledgeable, trained and qualified personnel, consistent with all applicable industry standards.
3.5 Qualification & Training
Supplier will ensure that its personnel engaged in any design, manufacturing, storage, handling, packaging, distribution or other processing of the Deliverables have received comprehensive training sufficient to perform their assigned functions in accordance with this Agreement and all applicable laws and regulations. Supplier will be fully liable for the compliance of its personnel with the terms of this Agreement.
3.6 Inspection & Testing by HID
All Deliverables may be subject to HID inspection and testing. If after such inspection or testing, a Deliverable fails to conform to HID specifications, in HID’s sole opinion, HID shall notify Supplier of such non-conformity, and Supplier shall promptly replace and redeliver a fully-conforming Deliverable to HID at Supplier’s sole cost and expense. If an inspection or test by HID is made on Supplier premises, Supplier shall provide HID with access to facilities used in the production of the Deliverables, resources, and other assistance at no additional charge. All inspection or testing of Deliverables carried out by HID at its own premises will be at the Supplier’s sole cost and expense.
3.7 Production & Process Controls
Supplier shall develop, control and monitor production processes to ensure that the Deliverables conform to HID specifications. Supplier shall also ensure that all production and quality measurement equipment is:
- Suitable for the intended use;
- Operated by trained personnel;
- Calibrated to the appropriate standard; and
- Capable of producing valid results and detecting non-valid results, which can be used to verify Deliverable compliance with HID specifications.
Supplier shall create a Validation Protocol, describing the planned production activities, and a Validation Report, documenting the outcome of the planned production activities. Any changes to or deviations from the Validation Protocol shall be reviewed and approved by an authorized representative of HID in writing prior to implementation. Supplier shall also create and maintain a process failure mode and effect analysis (“PFMEA”), and process control plans for all steps from receiving to shipping of the Deliverables. Supplier shall promptly provide HID with copies of the PFMEA, production data, and all other production and process control documentation upon request.
3.8 Supplier Testing/First Article Inspection
Supplier shall be responsible for conducting testing and inspection of the Deliverables to ensure that they conform to all HID specifications. For all new Deliverables and when changes, approved in writing by an authorized representative of HID, are made to such Deliverables, Supplier will perform first article testing and inspection and provide a copy of the report to HID.
3.9 Non-Conforming Deliverables
Supplier shall establish and maintain written procedures to identify, control and recall Deliverables identified in the field that do not conform to HID specifications. The procedures, which shall be carried out at Supplier’s sole cost and expense, shall address the identification, documentation, evaluation, segregation and disposition of non-conforming Deliverables. Non-conforming Deliverables shall not be used without prior written approval from an authorized representative of HID.
3.10 Corrective & Preventive Actions
HID may initiate a Supplier Corrective Action Request (“SCAR”) when Deliverable non-conformity issues are identified. In such an event, Supplier shall: (i) provide containment action within twenty-four (24) hours of receipt of the SCAR, (ii) promptly investigate the root cause of the non-conformity, (iii) submit a Corrective and Preventive Action (“CAPA”) Plan to HID no later than five (5) business days of receipt of the SCAR, outlining results of the root cause investigation, actions Supplier has taken and will take to remedy the non-conformity and prevent it from reoccurring, and a timeline for action implementation and effectiveness validation, and (iv) submit a follow-up CAPA Plan to HID within thirty (30) calendar days of receipt of the SCAR, providing a status update and revising any information previously supplied, as necessary.
3.11 Complaints
Supplier shall provide assistance and information requested by HID in relation to the investigation of any complaints HID receives from its customers with regards to Deliverables supplied to HID under this Agreement, and to fulfill its regulatory reporting obligations. Where the complaint is confirmed to be attributed to the Deliverable supplied by Supplier, Supplier shall follow the CAPA process.
3.12 Packaging, Labeling, Handling & Storage
Supplier shall establish and maintain written processes and procedures based on HID requirements for the packaging, labeling, handling, and storage of the Deliverables to prevent damage, deterioration, contamination or other adverse effects to the Deliverables.
3.13 Document Control & Records Retention
Supplier shall ensure the entire life cycle of the Deliverables and all associated processes are continuously monitored and tracked, capturing all modifications thereto, through proper documentation. Supplier shall retain all documents, reports and records associated with the Deliverables for the greater of: (i) three (3) years or (ii) record retention periods stipulated under applicable laws. Upon request, such documentation shall be made available for inspection by HID, its representatives, or any relevant regulatory authority.
3.14 Engineering & Manufacturing Changes
Supplier shall submit a written Change Request to HID for review and approval prior to implementing any of the following:
- Changes that affect form, fit or function of the Deliverables;
- Changes to the Supplier part number for the Deliverables;
- Any Supplier process changes that affect the Deliverables;
- Changes to Deliverable packaging or labels;
- Changes that require HID to perform retesting of the Deliverables;
- Changes in the manufacturing location of the Deliverables; or
- Changes to raw materials or other inputs used in the production of the Deliverables.
HID reserves the right to accept or reject the Supplier’s Change Request in its sole discretion. The changes listed above may not be implemented without the express prior written consent of an authorized representative of HID. All such approved changes shall be carried out by Supplier at its sole cost and expense.
3.15 Subcontractors
To the extent Supplier uses any subcontractors or their personnel (collectively, the “Subcontractors”) in connection with the provisioning of the Deliverables, the Subcontractors will comply with the terms of this Agreement. Where applicable, Supplier will implement and maintain applicable controls to ensure such Subcontractors are adhering to the product and quality requirements set forth herein. Supplier will remain fully liable for such Subcontractors.
3.16 Supplier Evaluation & Rating
HID will perform quarterly Supplier Performance Evaluations and rate Supplier based on the following, as well as other HID criteria:
- Quality performance (e.g. Deliverable compliance with HID specifications; adherence to applicable quality standards);
- Delivery performance (e.g. on-time delivery rate; occurrence of overages, shortages, or damages); and
- Environmental and sustainability performance (e.g. adherence to applicable environmental and sustainability standards; commitment to sustainable business practices and energy reduction).
In the event Supplier’s rating falls below HID minimum requirements, HID will require Supplier to submit an Improvement Action Plan for HID approval. Such Improvement Action Plan will include, at minimum: (a) actions Supplier will take to correct any deficiency and (b) the timeline to implement such actions. Supplier agrees that any failure to comply with an Improvement Action Plan will be a material breach of this Agreement.
4. Audits & Inspections
4.1 Supplier agrees that any government, notified body, commission, board, regulatory agency, court or other instrumentality having any jurisdiction over either Party in connection with the Deliverables will have access to and the right to inspect or audit any pertinent Deliverables manufacturing or quality processes, and associated documentation or records. Each Party will provide reasonable assistance in furtherance of such inspection or audit. To the extent permitted by applicable laws, Supplier must notify HID immediately if it becomes subject to or receives notice of such inspection or audit.
4.2 Upon reasonable advance written notice to Supplier, HID or its designated representatives may conduct an audit of Supplier’s and/or its Subcontractor’s compliance with the terms of this Agreement including, without limitation, onsite audit of facilities used in connection with the provisioning of the Deliverables. HID may request and Supplier will provide any records deemed relevant by HID during such an audit. Supplier will provide all reasonable assistance in furtherance of an audit and will not prevent, unreasonably delay or interfere with any audits carried out by HID in accordance with this Agreement.
In the event HID discovers any non-compliance during an audit, Supplier will provide to HID, without undue delay, a written Post-Audit Corrective Action Plan after receipt of the audit report. The Post-Audit Corrective Action Plan shall define the: (i) root cause of the non-compliance, (ii) actions Supplier will take to correct the non-compliance and maintain ongoing full-compliance, and (iii) timeline for Supplier to implement such actions.
5. Termination
HID reserves the right to terminate this Agreement in the event Supplier breaches a material obligation under this Agreement and fails to cure such breach within thirty (30) days after HID sends written notice describing the breach if such breach is capable of being cured, or immediately if the breach is not capable of being cured.
6. Compliance with Laws
Supplier represents, warrants and undertakes that: (i) Supplier and its affiliates and agents shall comply with the ASSA ABLOY Business Partner Code of Conduct (the “Code of Conduct”) (available at: https://www.assaabloy.com/group/en/sustainability/code-of-conduct/code-of-conduct-business-partners) and all applicable laws and regulations, including anti-corruption laws, sanctions and export control laws. Supplier shall promptly provide HID with a signed copy of the Code of Conduct upon request; (ii) neither Supplier, its affiliates nor any of their officers or directors, is or is owned or controlled by any person targeted under the sanctions or export controls of the UN, US, EU or any other relevant government; (iii) Supplier will not engage in any business involving any such listed person; and (iv) Supplier will immediately inform HID of any breach of the foregoing. Following any breach, Supplier may refuse further performance, or terminate this agreement and HID’s relationship with Supplier, without liability to Supplier.
7. Miscellaneous
7.1 Nothing in the Agreement is intended to create a partnership, franchise, joint venture, agency, or a fiduciary or employment relationship. Neither Party may bind the other Party or act in a manner which expresses or implies a relationship other than that of independent contractor. Except as otherwise set forth herein, each Party shall bear its own costs and expenses in performing the Agreement.
7.2 HID shall not be considered in default of performance of its obligations under the Agreement if performance of such obligations is prevented or delayed by any circumstances not within HID’s reasonable control including, but without limitation: pandemics and any associated travel restrictions or advisories of relevant governmental and global authorities (such as the World Health Organization) prohibiting or restricting (or recommending the prohibition or restriction of) the movement of persons or goods or the closure of or restricted operation of facilities, acts of God, fire, explosion, flood, storm, terrorist attack, civil war, commotion or riots, war (or threat of war), imposition of sanctions, embargoes or acts of government (including without limitation failure or delay to obtain export licenses), labor disputes, failure or delay of transportation, vendors or subcontractors, or any other similar cause or causes beyond the reasonable control of HID. Time of performance of HID’s obligations hereunder shall be extended by the time period reasonably necessary to overcome the effects of such force majeure occurrences.
7.3 If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law or public policy, the remaining provisions shall remain in full force and effect.
7.4 No term or provision hereof shall be deemed waived, and no breach consented to or excused, unless such waiver, consent or excuse shall be in writing and signed by the Party claimed to have waived or consented. Should either Party consent, waive, or excuse a breach by the other Party, such shall not constitute consent to, waiver of, or excuse of any other different or subsequent breach whether or not of the same kind as the original breach.
7.5 The Agreement shall be construed in accordance with the governing law and jurisdiction set forth in the following table:
| Region of HID Contracting Entity | Choice of Law | Jurisdiction |
|---|---|---|
| Argentina | Argentina | Argentina |
| Australia & New Zealand | Australia, State of Victoria | Victoria, Australia |
| Brazil | Brazil | Brazil |
| France | France | Paris, France |
| EMEA | Ireland | Galway, Ireland |
| England & Wales | England & Wales | London, England |
| Asia Pacific Region | Singapore | Singapore |
| United States, Canada, & Mexico | USA, State of Texas or New York | Travis County, Texas, USA or New York, New York, USA |
The Parties hereby irrevocably waive any and all rights to trial by jury in any legal proceedings arising out of or related to the Agreement or the transactions contemplated hereby. The provisions of the United Nations Convention on Contracts for the International Sale of Goods will not apply to the Agreement, or any Purchase Order issued hereunder.
7.6 This Agreement is the entire understanding and agreement between the Parties hereto with respect to the subject matter of these terms and merges and supersedes all prior communications, understanding and agreements, written or oral, and no amendments shall become effective without written agreement signed by the Parties hereto. To the extent the terms of this Agreement conflict with any other terms, the terms of this Agreement will control with respect to all subject matter contained herein.