Thursday, January 13, 2011
Many times a Supplier may want to have commitments tied to their internal process, specification or data sheet. Frequently there may be a disconnect between what the Supplier’s negotiator thinks exists in those internal documents and what is actually there. Let me give you a couple of examples:
I had a Supplier want to have a the safety warranty and Intellectual Property indemnification be contingent upon use in “intended or authorized applications”. When I asked to see the data sheet there were no intended or authorized applications listed.
I had a Supplier want to have product warranty voided if an outside laboratory that the Supplier had not previously approved tested the product. I asked to see the list of approved laboratories and they couldn’t produce it.
I’ve had Supplier’s want me to follow their internal process. When I asked to see it so I could review it, they couldn’t provide it.
I’ve had Supplier’s want me to agree to use their internal processes for notifications to change lead-time or their process for end of life notifications. When I asked for them to provide me a copy, some made no sense, many were incomplete, and most were unacceptable.
Rather than just say no, I ask them to show me exactly what they are referring to. If they can’t produce it, it eliminates the issue. If they can produce it and its acceptable I don’t have any problem pointing to it as long as it’s under revision control and I have a copy of what’s being referred to so they can’t change it and I can make it part of the contract. That's very important in these days where everything may be electronic copies. The key is it has to be acceptable and for you to agree that its acceptable you need to read through the entire document! Some Suppliers have been known to try to include additional legal terms as part of their specifications or data sheets. I can remember one where on the very last page of a ninety-page product specification, and in much smaller print, there were a number of legal terms that weren’t acceptable. If I didn’t read it and had made it part of the agreement they would have applied.
The state of Missouri in the U.S. is referred to as the “Show Me” state. It’s good advice to follow if you are a negotiator. Don’t assume that what they are referring to exists or is acceptable. Ask them to show it to you so you can make the determination.