8.3.2.1 Review of the Requirements for Products and Services.

Dan M

Involved In Discussions
[I originally posted in AS9100D; unfortunately, did not generate enough interest for anyone to respond]

One of our facilities received a nonconformance against 8.2.3.1 Review of the Requirements for Products and Services.

The organization does not always identify and review customer requirements, including embedded requirements, stated or referenced on Purchase Orders.

The Customer Service team could not demonstrate a process of reviewing customer requirements (including embedded requirements referenced on the Purchase Order or referenced via a website) for specific terms/conditions and quality requirements.

The Customer Service team has a standard company terms and conditions statement that is sent to customer with each order conformation and the expectation is that the customer must accept our Company's terms and conditions or further negotiate.

The auditor did not view this as an acceptable approach to address 8.2.3.1.

We have a large number of customers many whose purchase orders reference their terms and conditions. This practice of "countering" the customers' terms and conditions with our Company terms and condition after acceptance of every order is something that was sanctioned/recommended by our Legal department.

Our legal department does not have the bandwidth to review and redline the customer's terms and conditions of every incoming purchase order nor does the Customer Service team have the skillset/knowledge to engage in this activity. It seems that many customers' terms and conditions are a blend of boilerplate legalese and delivery/quality requirements.

I would welcome any suggestions on how to address this without trying to boil the ocean.
 

Sidney Vianna

Post Responsibly
Leader
Admin
I would welcome any suggestions on how to address this without trying to boil the ocean.
There is no silver bullet solution here. Most OEM's invoke a HUGE number of T&C's (example: Boeing Suppliers - Terms and Conditions) via their contracts and PO's. While your sales orders might "attempt" to counter their T&C's with your own, in case of a legal dispute, it will be a mess. They claim their T&C's supersede yours and vice versa.

Most suppliers "pretend" they did not know the extent of the invoked T&C's. There is no easy solution, if you were to really enter a legal review battle PRIOR to accepting the order.

ps as usual, similar discussions have been had here e.g. AS9100D Contract Review
 

geoffairey

Involved In Discussions
I’m assuming that there are no framework agreements in place as they would set out the terms. I find the whole back and forth arguments of who’s terms take precedent quite tedious, especially as the accepted (but not necessarily correct) wisdom is that whoever speaks last is right (assuming there’s wording saying that these terms take precedent over any other previous terms). Your legal dept will endorse this view as it’s all they can do, but it won’t necessarily stand up in court.

In the UK to form a contract, one party makes an offer and the other needs to accept. By the second party not actually accepting the original offer (including the terms) but effectively providing a counter offer, Unless the second party then receives confirmation from the first party of acceptance of the newly offered terms, there’s technically no contract/agreement.

With regards to your NC while the Auditor is technically correct (your team need to review the order to ensure you can provide it, including all requirements of the order. If you accept the order but don’t actually meet the customer’s requirements, then you’ve not fulfilled the order correctly and therefore it’s an NC.), in the real world, many businesses operate like this, because it rarely leads to disputes. I’m not sure how you clear this with the CB
 

Mike S.

Happy to be Alive
Trusted Information Resource
Here is my personal take:

I hate T's and C's peeing contests. It's mostly tedious BS. Legalistic grunge that creates far more waste heat than light. Most buyers put their T's&C's on the PO and most suppliers say on their quote or acceptance letter that "our T's&C's apply". I've been told more than once by upper management, "don't worry about it, our lawyers say we're okay". Great.

Thankfully, 99.9 % of the time that BS never comes into play in the form of a legal battle. What does often come into play is whether or not you are reviewing and complying with the product requirements - drawings, parts lists, procurement specs, QA codes, etc. In my experience, if the auditor sees you are doing that, they don't get into the T's and C's, and it you are doing that it is likely your customer won't, either.
 

Dan M

Involved In Discussions
Here is my personal take:

I hate T's and C's peeing contests. It's mostly tedious BS. Legalistic grunge that creates far more waste heat than light. Most buyers put their T's&C's on the PO and most suppliers say on their quote or acceptance letter that "our T's&C's apply". I've been told more than once by upper management, "don't worry about it, our lawyers say we're okay". Great.

Thankfully, 99.9 % of the time that BS never comes into play in the form of a legal battle. What does often come into play is whether or not you are reviewing and complying with the product requirements - drawings, parts lists, procurement specs, QA codes, etc. In my experience, if the auditor sees you are doing that, they don't get into the T's and C's, and it you are doing that it is likely your customer won't, either.

Best response yet! This is exactly how we view it.
 

Paul Simpson

Trusted Information Resource
[I originally posted in AS9100D; unfortunately, did not generate enough interest for anyone to respond]

One of our facilities received a nonconformance against 8.2.3.1 Review of the Requirements for Products and Services.

The organization does not always identify and review customer requirements, including embedded requirements, stated or referenced on Purchase Orders.

The Customer Service team could not demonstrate a process of reviewing customer requirements (including embedded requirements referenced on the Purchase Order or referenced via a website) for specific terms/conditions and quality requirements.

The Customer Service team has a standard company terms and conditions statement that is sent to customer with each order conformation and the expectation is that the customer must accept our Company's terms and conditions or further negotiate.

The auditor did not view this as an acceptable approach to address 8.2.3.1.

We have a large number of customers many whose purchase orders reference their terms and conditions. This practice of "countering" the customers' terms and conditions with our Company terms and condition after acceptance of every order is something that was sanctioned/recommended by our Legal department.

Our legal department does not have the bandwidth to review and redline the customer's terms and conditions of every incoming purchase order nor does the Customer Service team have the skillset/knowledge to engage in this activity. It seems that many customers' terms and conditions are a blend of boilerplate legalese and delivery/quality requirements.

I would welcome any suggestions on how to address this without trying to boil the ocean.
This looks to be a bit of a stretch by the auditor. In your shoes, I would argue that specific customer requirements in the customer orders are being satisfied (or challenged/discussed) and that the Ts and Cs are not product/service quality related. This back and forward on Ts and Cs is often known by the term 'battle of the forms'.

Ts and Cs can be important and the lawyers will get involved if needed. In a previous life we had HUGE meetings to discuss potential contracts and the requirements/liabilities they introduced. This was the oil and gas sector and potential liabilities were unlimited.

Helps to focus the mind! :)
 
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