SAMPLE COMPANY                                        Page 1 of 8
SOP # 06-1  Revision: 0                Prepared by:             _
Effective Date:                        Approved by:             _


Title:         VENDOR SELECTION, FILES AND INSPECTIONS

Policy:   To assure performance capabilities of all vendors and
          internal control of purchasing functions, appropriate
          vendor selection and inspection procedures will be
          followed.

Purpose:  To provide the methods for determining, documenting and
          when applicable inspecting vendors for compliance with
          company policies and government contract purchasing
          requirements.

Scope:    This procedure applies to purchasing from all vendors.


Procedures:

1.0  Vendor Selection

1.1  Vendors are to be evaluated using the following criteria:

     -  Pricing.
     -  Parts availability and shipping time frame.
     -  Performance capability (i.e., financial status,
     sufficient facilities, equipment and
        employees).
     -  Internal Quality Assurance program.
     -  Past performance.

     Qualified vendors will be maintained on an Approved Vendor
     List for purchasing use.

     For first time purchases from a vendor, a New Vendor
     Notification form              (Exhibit 1) should be
     completed and approved.  Any related party transactions or
     vendors the company or employees could have a potential
     conflict of interest with, should be documented on this
     form.


2.0  Vendor Inspections

2,1  For critical components or for inventory purchases that the
     company desires to rely on the quality assurance of the
     vendor to reduce receiving inspection or testing
     requirements, an on-sight vendor inspection must be
     performed and approved.
VENDOR SELECTION, FILES AND INSPECTIONS               Page 2 of 8


     The Director of Quality Assurance will coordinate with
     Purchasing to plan, arrange and designate staff for all
     vendor inspections.  A Vendor Survey Form (Exhibit 2) should
     be completed and notated with approval/disapproval of the
     vendor's performance capability and quality assurance
     program.


3.0  Vendor Files

3.1  A vendor file will be prepared and maintained for all
     vendors on the Approved Vendor List which will be used for
     significant or on-going purchasing.  The vendor files will
     be kept alphabetically and can include the following:

     -  New Vendor Notification form.
     -  Completed credit applications and terms.
     -  Resale certificates.
     -  Legal contracts .
     -  Long-term blanket purchase order commitments.
     -  Vendor Survey Forms.
     -  Any other relevant correspondence or documentation.