PROCUREMENT POLICY1. INTRODUCTION
1.1 This policy establishes the corporate guidelines to contract third-party services (Procurement), including services and products. QUANTUM DESIGN recognizes the importance of being able to promote procurement and contracting processes that ensure competitiveness, integrity and transparency.
1.2 The Procurement Policy established in this document serves as an instrument to execute and monitor projects, known and understood by all employees, and improved upon whenever possible.
Only companies with technical and administrative approval are selected to present their business conditions for products or services previously identified, quantified, specified based on a specific completion time, in order for all participants to plan their respective pricing based on clear premises available to everyone involved.
1.3 The purpose of this policy is to develop and qualify the set of administrative and financial corporate procedures, making them more transparent and easy to fulfill. In order to preserve the rights of all parties involved, the company formalizes purchases based on a boilerplate contract, in accordance with its Code of Ethics and applicable laws, operational, technical and commercial conditions, and the principles of business sustainability and transparency.
1.4 The guidelines detailed below must be followed at all times, otherwise corporate funds may not be released to pay for respective services in the event of noncompliance. The procurement process shall abide by strict equity and transparency principles.
Guidelines to contract services and acquire goods:
a) Always seek suppliers with best business, social and environmental practices in place;
b) Seek savings without compromising quality and efficiency;
c) Ensure transparency in all processes, never condoning unethical behaviors and excluding suppliers that do not act in similar fashion;
d) Proposals must be selected based on objective judgment, with criteria established in each process and clearly known by all stakeholders.
3. CODE OF ETHICAL CONDUCT
Corporate practices to control fraudulent activities:
a) Checking and comparing data provided in proposals, such as formatting, address, phone number and email address;
b) Conducting technical evaluations of proposals;
c) Revising all processes by at least one other company employee;
d) Separating duties among requesters, those responsible for drafting contracts and payments, based on the disbursement caps established for each role.
3.1 Obligations of purchase requesters:
a) Obtain three different quotes, when possible. Competitors must receive exactly the same technical request (same email);
b) By the end of the process, all competitors shall receive a response regarding the conclusion, including those that were not chosen;
c) Those directly or indirectly involved in procurement or contracting processes may not receive any personal advantages or benefits from suppliers or participants of the procurement or contracting process;
d) The confidentiality of technical and business information within procurement and contracting processes shall be upheld, restricting the disclosure of respective data for internal use only.
3.2 Contractor Conduct – PROCEDURES
Based on the company’s policy, suppliers are selected not only be competition, but also according to a cost-to-benefit criterion based on quotes. All policies and standards must be guided by the following guidelines:
a) Employees involved in procurement or contracting processes must use all relevant query mechanisms to ensure the company’s service providers or suppliers abide by applicable laws.
b) Ensuring that suppliers or service providers are not part of the Employee Registry, the so-called “Blacklist” of Slave Labor or the Registry of Ineligible and Suspended Companies (CEIS) of the Brazilian Office of the Comptroller General. Informing suppliers or service providers that they will be required to sign contracts, when applicable, with specific clauses against slave labor, child labor and other degrading forms of labor under their responsibility.
c) The primary criterion to select suppliers shall be the cost-to-benefit ratio for the company, including not only prices but also all conditions related to deadline and objective.
4. WAIVER OF QUOTES
The following purchases and contracts shall not require bidding processes with three different quotes:
• amounts under $ 400;
• when there is already an umbrella contract in force;
• specialty cases;
• cases of emergency purchases and contracts.These cases are further explained below:
a) Purchases and contracts with values under $ 400 do not require quotes, provided that payments do not refer to installments for the same service.
b) Umbrella contract: Bidding processes are not required for each contracting or purchase in case of recurring service providers. The process to establish an umbrella contract also requires three quotes. If there is still no umbrella contract for the sought service, contact the financial and/or administrative area to review the need to devise a contract under the requesting area’s responsibility.
c) Specialty: Suppliers may be contracted under the justification of specialty in the following cases:
1. To acquire materials, equipment or related items that can only be provided by an exclusive manufacturer, company or business representative;
2. To contract specialized professionals or companies, whose reputation in the field of specialty, studies, experiences, organization, technical team or other requirements related to their activities allows to infer that their work is essential and the most adequate to fully meet the purpose of the contract.
d) Emergency: urgent situation that must be addressed to avoid losses or compromising work activities, which cannot be anticipated. In these cases, an email justifying the need for such contracting must be sent to the Board of Directors for deliberation.
5. CONTRACTS OVER $ 2000
5.1 Work flow for purchases and contracts exceeding $ 2000:
a) Obtain at least three quotes;
b) Request certificates from the chosen supplier;
c) Complete and print out payment requests with all three quotes attached;
d) Obtain payment request approval from the Director.
e) Draft the contract, if necessary, and collect all signatures;
f) Upon completing installment payments, the employee in charge of Accounts Payable must check with the project coordinator if the service was completed or if the product was delivered.
g) For contracts with monthly and consecutive maturities, the sum of 12 months will be considered for the purposes of this item.
5.2 Any violation to this policy and information regarding eventual noncompliance with legal and normative provisions applicable to the company and suppliers shall be reported through the company’s appropriate reporting channels.
6. PAYMENT FOR PURCHASES AND SERVICES
6.1 Upon completing purchase or contracting procedures, they must be submitted to the financial area within 03 (three) business days of maturity/payment.
6.2 Payments shall only be carried out upon submission of the material and/or service invoice. All invoices shall be delivered to the financial area with the respective authorizations. Invoices of materials, services and RPAs shall be submitted to the financial area for payment within 03 (three) business days.
6.3 The payment method will be indicated in the quote. Otherwise, payment will be processed via bank transfer, bank payment slip or credit card.
7.1 The financial area must submit to the accounting area the invoice and service agreement in order to carry out due bookkeeping procedures.
8. FINAL PROVISIONS
This policy shall be monitored by the company’s Board regarding the application of follow-up procedures and control of its guidelines. This policy will be revised on an annual basis or whenever needed.
Exceptions, eventual violations and cases not covered herein shall be considered individually.
This Policy was approved by the Board of Directors and validated by the Legal department, represented by attorney Julia Dutra Silva Magalhães, Brazilian Bar Association (OAB/SP) registry No. 270.944
Campinas, São Paulo. March 1, 2020.