Chubu Electric Power Co.,Inc. | Procurement Procedure - Doing Business in Materials and Equipment

Doing Business in Materials and Equipment Procurement Procedure

Procurement Procedure

Chubu Electric registers (refer to the section "Registration and Type Certification"), as its suppliers, only those companies with superior operations, technical expertise and so on. Chubu Electric then will designate bidders from these registered companies.

Mode of Procurement and Selection of Bidders

Chubu Electric generally procures materials and equipment based on a specified bid in which designated bidders are required to submit competitive estimates of a needed product. In the bids, two or more suppliers are selected as specified bidders among qualified suppliers registered for each product category. Bidders are designated from the list of Chubu Electric's registered companies by comprehensively taking into account such factors as the outcome of registration evaluations, any track records of previously supplying to Chubu Electric, and other relevant factors.

However, Chubu Electric may choose to request a bid from only one company due to such factors as patents, technology or compatibility with facilities in operation. In some cases, such as the trial purchase of new products, the Company may decide to request a bid from a company not previously registered.

Invitation to Bid and Submission of Written Bids

In inviting bids, Chubu Electric presents the specifications, contract terms and other documents necessary to assure a fair bidding process for the bidders.

Written estimates, specifications and other required documents must be submitted no later than the specified deadline. Documents will become effective only if they satisfy Chubu's requirements. When technical evaluation is needed, specifications must be submitted to the company prior to making estimates.

Price Negotiations and Contract Executions

In principle, Chubu Electric decides on a supplier and a price based on price negotiations with the company which submits the lowest valid bid. Contracts shall be in compliance with the conditions prescribed by Chubu Electric. (Contracts may be concluded, amended, or terminated only in writing.)

Delivery, Inspection and Payment

Products should be delivered in compliance with terms and conditions of the contract closed.Products so delivered must successfully pass a final acceptance inspection by Chubu Electric.

As a general rule, products delivered and accepted between the 21st day of the previous month and the 20th day of the current month will be paid for at the end of the following month. Other payment schedules may possibly be arranged, for example, with products manufactured over an extended period of time.

Others

Compliance with Laws

Suppliers doing business with Chubu Electric are expected to comply with all relevant laws and ordinances.

Compensation

Chubu Electric may hold suppliers liable for damages if their deliveries are made substantially later than that which was originally agreed.

Confidentiality

Both Chubu Electric and suppliers are subject to confidentiality as to classified information that has come to their knowledge in the process of transactions. Both of them are not to release this classified or other sensitive information to a third person without the written consent.

Flowchart

An image of the flowchart of procurement of Equipment and Materials

* When technical evaluation is needed, specifications must be submitted to the company prior to making estimates.