UGE VP of Projects.1. procurement principles· Goods and services

UGE Procurement policyResponsible Department: ProcurementResponsible Official: Procurement Manager and VP of ProjectsEffective Date: 2018-01-01                 Last Revision Date: 2017-12-29 This policy governs the acquisition of goods and services, under the general direction of the VP of Projects.1.

procurement principles·         Goods and services should be acquired competitively, with consideration to internal resources allocated, project specific requirements, alternative vendors, lead time, and payment terms, to achieve the best value. ·         The vendor selection process should be fair and non-discriminatory. ·         The Acquisition of goods and services must meet legal and ethical obligations  ·         Competing bids, including price, terms, vendor name, as well as UGE’s budget, target price, lowest bid, or other similar info must not be shared externally. ·         Approvals for Purchase Orders must be obtained in writing; documentation shall be retained for internal and external review and auditing. ·         Staff involved in the procurement process should be skilled in purchasing techniques such as negotiating, identifying risks, reducing cost and lead time, and reviewing contractual terms and conditions ·         Employees cannot accept gifts or favors from vendors that may influence a person’s purchasing decisions.  Employees should review with their supervisors any offers of gifts.

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2. COMMUNICATIONProcurement is the first point of contact for existing and potential vendors and their sales representatives.  Vendors are informed of the following with regards to UGE’s Procurement Policy: ·         All purchases of goods and services from vendors must be preceded by the issuance of an official Purchase Order.

 ·         All invoices should be sent directly to Accounting.  Invoices must reference the appropriate Purchase Order number and project name to be processed. ·         Accounting will send invoices to Project Managers whenever their approval is required prior to payment.3.

Signing authority and limits3.1. Purchase orders·         VP, Projects, if $50,001 or greater·         Senior Project Manager, up to $50,000·         Project Manager, up to $3,000·         Procurement Manager, always required3.2. Subcontractor AGreements/contracts·         UGE USA: President·         UGE CANADA: President·         UGE RE: President·         UGE PHILIPPINES: President3.

3. Credit APPLICATIONS3.3.1.   Main AgreementGenerally, all credit applications will require a signature that authorizes the Seller to obtain credit and financial information concerning UGE, its Officers, and its Principals, from any source, for evaluating UGE’s creditworthiness.3.3.1.

1.   authorized signatories·         UGE USA: President·         UGE CANADA: President·         UGE RE: President·         UGE PHILIPPINES: President3.3.2.

   Personal Guaranty section·         The Personal Guaranty is usually at the end of the application, or as an attachment.  If neither is true, read every word of the application to make sure there is no language that suggests that any person signing anywhere in the credit application, is personally responsible for any debt or obligation incurred.   authorized signatories·         None  4. Procurement process4.

1. GENERAL PROCESSSEE APPENDIX A: PROCUREMENT PROCESS FLOWCHART4.2. RESPONSIBILITY by department4.2.1.   finance·         Creation of Purchase Orders (PO)·         Match invoices to correct PO numbers·         Revise POs4.2.

2.   procurement·         Oversee the Procurement process of goods and services in accordance with UGE’s official Procurement Policy.·         Prepare and send RFQ·         Receive and review quotations·         Negotiate price and terms·         Manage Vendor Relations·         Review and approve POs, along with Project Management4.2.3.   project management·         Specify Scope of Work (SOW)·         Keep the Bill of Material (BOM) up-to-date·         Review and negotiate scope of work·         Review and approve POs, along with Procurement·         Manage payment and delivery schedule4.2.

4.   engineering·         Specify Technical Requirements·         Review Technical Specifications and Drawings·         Approve Technical Specifications and Drawings4.3.

purchase ordersA Purchase Order must be established prior to the procurement of goods or services.   Purchase order number is required to process invoice payment.  Failing to do so will put the corporation at risk of non-compliance during a regulatory audit.All purchases require a PO, except for purchases of $500 or less, or in rare situations where the VP of Projects approves an exemption.  Depending on the amount of the PO, the appropriate approvals must be obtained in writing before it may be sent out. 4.3.1.

   Approval Levels matrixSEE APPENDIX B: UGE APPROVAL LEVELS FOR PROJECT RELATED GOODS AND SERVICES4.3.2.   $500 or less.When the purchase $500 or less, there is no requirement for a PO, though the company has the option of issuing a purchase order.  Verbal quotations are accepted, but not recommended.

  Use of a corporate credit card is allowed if payment is required urgently and in advance.  Purchases must be approved by the Project Manager.4.3.3.   $501 to $3000When the purchase is $500 to $3,000, at least two (2) quotations must be obtained in writing from different vendors.  Verbal quotations are not accepted.  Use of a corporate credit card is allowed if payment is required urgently and in advance.

  POs must be approved by the Procurement Manager as well as the Project Manager.4.3.4.   Purchases from $3,001 to $50,000Goods or services $3,000 and higher are considered high value purchases.  At least three (3) quotations must be obtained in writing from different vendors.  Use of a corporate credit card is not allowed, unless in rare situations where the Procurement Manager approves an exemption.

  POs must be approved by the Procurement Manager as well as the Project Manager, and the Senior Project Manager (or Regional Deployment Director).4.3.5.   Purchases $50,001 and aboveProcurement for goods and services $50,001 and above, require a formal Request for Quotation (RFQ) or Request for Proposal (RFP), unless in rare situations where the VP of Projects Manager approves an exemption.  The Department of Procurement must be involved with transactions of this magnitude.  POs and contracts must be approved by the Procurement Manager as well as the Project Manager, the Senior Project Manager (or Regional Deployment Director), as well as the VP of Projects. Due to the nature of procurement in this category, sufficient time must be allowed for each of the following steps: ·         UGE to prepare the and send the RFQ to qualified vendors·         competing vendors to gather the information required to create and submit their bid·         UGE to review, negotiate and select the winning bid·         UGE to create, review, approve, and issue an official Purchase Order·         In some cases, UGE to prepare, negotiate, and sign a Master Supply Agreement, Stipulated Price Contract, or other contractual agreements4.

3.6.   ExceptionsCompetitive quotations are not required for goods or services where the only supplier is a department, agency, or utility of the government.

  However, a Purchase Order should still be created internally, if the amount is more than $500.4.3.7.   Splitting PurchasesAll amounts in this policy are in USD, do not include taxes, and refer to the total cost of the group of goods and services being purchased over the entire project.  It is not acceptable to split the purchase into smaller orders to avoid obtaining quotations or to avoid going through the PO approval process (e.g.

splitting a purchase of 4 inverters with a total value of $20,000 into 4 purchases of $5,000 each). 4.3.8.   Inventory and sparesTo help avoid theft, damage, storage cost, additional freight cost, and any eventual write-offs, all POs must be for exactly what is required to build the project.

 In some cases, such as connectors, hardware and modules, spares of up to 0.50% may be purchased:·         to reduce the risk of not meeting project deadlines·         to take advantage of the low cost of bulk shipping, and/or bulk pricing.·         to avoid long lead times, if replacement units are needed in the future