Procurement Engineering Standard Purchase Clause

1 Procurement Engineering Standard Purchase Clause Code: COMPLIANCE Title: Compliance to Technical, quality , Configuration and Regulatory Requirements R009 Applicable to: Items or services This Clause applies to Purchase orders issued on or after August 26, 2011 Page 1 of 3 RFQ/PO Exceptions The supplier is to advise the Buyer of any exceptions to the requirements stated on this RFQ/PO. Part number changes are managed using Ontario Power Generation (OPG) form Vendor Parts/Material Substitution Control Form (N-FORM-10115, latest revision available from the Buyer).

2 OPG approval of a substitution ( Purchase Order revision) is required prior to shipment. Item Shipment Material shipped must match the Purchase Order line item description. Items must be tagged and/or marked with part number(s) matching the items described on Purchase order. Non-conforming items will be returned at the supplier s expense. QA on Sub-tier Suppliers The supplier shall extend all appropriate requirements of this Purchase Order to sub-tier suppliers. If the supplier determines any QA program requirements specified in this order are inappropriate for sub-tier suppliers, documented justification for this determination shall be available for review by OPG representative(s).

3 Rights of access OPG, its Authorized Representative and/or an Authorized Inspection Agency (AIA) and/or an Authorized Inspector (AI) and/or an Authorized Nuclear Inspector (ANI) as identified in the appropriate regulations ( , ASME Sec III, ASME Sec VIII, CSA N285, CSA B51) shall have free access at all reasonable times, to the supplier s and sub-tier supplier s facilities, as may be necessary to confirm supplier compliance with Regulatory, Technical and quality Program requirements as identified in the Purchase Order. quality Assurance Audit or Assessment OPG reserves the right to audit and/or assess the supplier s and sub-tier supplier s quality programs and examine the work, wherever situated, for assurance of conformance to quality requirements.

4 Any audit will be scheduled at a time mutually agreeable to OPG and the supplier/sub-tier supplier. quality Assurance Documentation quality Assurance documents shall be legible* and must be located inside the Product Packaging. If the size of the quality Assurance documents do not allow for inclusion within the Product Packaging, the documents must be placed in a separate Package and sent at the same time, to the same location as the Product. Non-conforming Packages will be returned at Vendor s expense. The Procurement Engineering Standard Purchasing Clauses identified on the Purchase Orders will provide any additional quality Assurance Documentation instructions.

5 Approving Disposition of Non-conformances Where required by the quality Program invoked by the Purchase Order, the supplier shall submit OPG s Concession Application form (N-FORM-10393, latest revision available from the Buyer) for any product non-conformances discovered by the supplier. This form shall include Supplier-recommended disposition and technical justification. Repair and Use-as-is dispositions on item non-conformances require the concurrence of all responsible parties, and must be accepted by OPG prior to item shipment.

6 Note: At the discretion of Engineering this Clause may be modified to add the following The intent is that the supplier submits all nonconformances on an OPG Concession N-FORM-10393 which affect Form, Fit, Function, Design Basis . Procurement Engineering Standard Purchase Clause Code: COMPLIANCE Title: Compliance to Technical, quality , Configuration and Regulatory Requirements R009 Applicable to: Items or services This Clause applies to Purchase orders issued on or after August 26, 2011 Page 2 of 3 Reporting of Nonconformances It is the responsibility of the Senior Management to immediately notify OPG in writing when a known or suspected defect or nonconformance is discovered that affects, or may affect, a product that has already been delivered to OPG.

7 The notification shall be on company letterhead and include the identification and endorsement of Senior quality Management. The company must submit such notification by email to: The notification shall include the following details as a minimum: a) A clear description of the defect or nonconformance. b) An assessment on the impact of the defect or nonconformance to the product form, fit or function. Also address the potential impact on safety if known. c) Identify OPG catalogue identification numbers(s) that are affected including OPG Purchase order and line item numbers, ship date, quantity, manufacturer product identification / traceability ( serial number, lot number, batch number, manufacturing date, etc.

8 D) Immediate short term actions to be taken to remedy the situation at OPG (address the availability of replacement item(s) and delivery time lines). e) Long term corrective action plan to address the root cause for the defect or nonconformance, including completion / implementation commitments. The supplier shall extend above reporting requirements to sub-tier suppliers. For Suppliers Implementing a 10 CFR50 App B quality Program For suppliers who operate under the 10 CFR50 Appendix B quality program be advised that all Part 21 Notifications must be submitted by email to: Delivery of Suspect / Counterfeit, Fraudulent and Substandard Items (CFSI s) The Supplier is hereby notified that the delivery or use of suspect and/or Counterfeit, Fraudulent and Substandard Items (CFSI s) is of special concern to Ontario Power Generation Inc.

9 (OPG). If any parts covered by the Contract are described using a manufacturer part number or using a product description and/or specified using an industry Standard , the Supplier shall be responsible to assure that the replacement parts supplied by the Supplier meet all requirements of the latest version of the applicable manufacturer data sheet, description, and/or industry Standard . If the Supplier is not the manufacturer of the goods, the Supplier shall make all reasonable efforts to assure that the parts and components supplied under the Contract or used to manufacture the equipment covered in this order are made by the Original Equipment Manufacturer (OEM) and meet the applicable manufacturer data sheet or industry Standard .

10 Should the Supplier desire to supply or use a part that may not meet the requirements of this paragraph, the Supplier shall notify OPG of any exceptions and receive OPG s written approval prior to shipment or use of the replacement parts to OPG. If suspect and/or CFSI parts are furnished under the Contract or are found in any of the goods delivered hereunder, such items will be dispositioned by OPG and may be returned to the Supplier. The Supplier shall promptly replace such suspect and/or CFSI parts with parts acceptable to OPG and the Supplier shall be liable for all costs, including but not limited to OPG s internal and external costs, relating to the removal and replacement of said parts.