PROCUREMENT PROCEDURE

Our procurement activities follow fair and clear procedures.

1.PROCUREMENT GUIDE IN RECENT YEARS In procuring materials and equipment, Tohoku EPCO has sought to reduce procurement costs with reliable supply and quality from a broad spectrum of business partners in Japan and overseas. In recent years, Tohoku EPCO's head office contracted products to be used in the construction, maintenance and operation of its electric power facilities (hereinafter referred to as the “electric equipment products”) on Tohoku EPCO's Internet Home Page. Please refer to Home page, when introducing your products. MATERIALS AND EQUIPMENT TO BE PROCURED IN RECENT YEARS. 2.INTRODUCING THE PRODUCTS YOU WOULD LIKE TO SUPPLY If your company wishes to introduce it's products to be considered as a new supplier, we request that you first provide the Headquarters' Materials Department with data on the products you would like to supply, along with a copy of your company's brochure and related information. When promoting your products, you may consider demonstrating the excellence of your products. In the case of the electric equipment products, they are subject to the supplier registration system. If the Materials and Engineers Department of Tohoku EPCO judge before that your product is a potential purchase, you are requested to file an application for registration forms. Tohoku EPCO selects prospective suppliers from registered suppliers. You do not have to register your products unless they are electric equipment products. 3.PRODUCTS TO WHICH THE SUPPLIER REGISTRATION SYSTEM APPLIES If the products your company would like to supply are those to which the supplier registration system applies, namely, electric equipment products, you are requested to file an application for registration, along with related documents, with the Headquarters' Planning & international procurement Group. Registration application forms and related information are available at the Headquarters' Materials Department office. Suppliers filing an application for registration with Tohoku EPCO must submit the application in Japanese, and may submit an application to the Materials Department at any time. Based on the information provided in the application package, products are evaluated from various viewpoints such as: Tohoku EPCO's needs; your company's financial condition; technical capabilities; production system; quality control system, after-sales service, etc. Suppliers shall be a Maker and an application form must be submitted for each product separately. Some products to be procured by Tohoku EPCO on a regular basis are designed in advance, and such products must pass a type-approval inspection in accordance with the procedures and methods determined by Tohoku EPCO. After passing this inspection, your company will be registered as a supplier for the products which you specified and will receive written notification of the result of our evaluation. Registration is valid for three years, but may be extended by filing for a registration update. 4.PRODUCTS TO WHICH THE SUPPLIER REGISTRAION SYSTEM DOES NOT APPLY If the products your company would like to supply are those to which the supplier registration system does not apply, namely, products other than electric equipment products, you are requested to provide Tohoku EPCO with information about your company's financial condition and the products your company would like to supply.You may introduce your products to the Materials Department at any time. If the products pass an evaluation based on the information provided and the product's appeal, then information on your company and its products will be filed in a specific data base within the Materials Department from which Tohoku EPCO makes its selection of prospective suppliers. 5.SELECTION OF PROSPECTIVE SUPPLIERS Selection of prospective suppliers will be made by the Headquarters' Materials Department when a procurement request is tendered by a section requiring materials and/or equipment. The Materials Department selects prospective suppliers either from the list of suppliers whose products qualified under the supplier registration system, or from the data base of suppliers whose products passed the evaluation for products not subject to the supplier registration system. 6.REQUEST FOR QUOTATIONS In general, Tohoku EPCO requests quotations from two or more selected prospective suppliers. However, depending upon special considerations such as patents, research and development activities, compatibility with existing facilities, or, when the procurement need is urgent or only one prospective supplier is available, Tohoku EPCO may request quotations from only one supplier. Registered suppliers may examine information about product names; quantities; and prospective suppliers selected for competitive quotations for electric equipment products, which is on file at the Headquarters' Materials Department. 7.SUBMITTING QUOTATIONS Quotations will be deemed valid only if they have met the deadlines, specifications and other conditions specified by Tohoku EPCO. 8.DETERMINING CONTRACT PRICE AND AWARDING CONTRACT In principle, Tohoku EPCO will negotiate contract price and other terms and conditions with the company offering the lowest quotation, and a contract will be awarded after an agreement has been reached. 9.CONCLUDING THE CONTRACT As a rule, a purchase contract will be concluded in writing. The contract will be made in accordance with the terms and conditions prescribed by Tohoku EPCO. If necessary, however, the contract may be made according to different terms and conditions mutually agreed upon between Tohoku EPCO and the successful supplier. 10.DELIVERY, INSPECTION, AND PAYMENT Products are subject to inspection upon delivery. Payment will be made in the month after which such products are accepted. In cases where a product requires a long manufacturing lead time, or in other special cases, Tohoku EPCO will make special arrangements for payment with the successful supplier. Tohoku EPCO may claim damages due to delay of delivery of materials and equipment. 11.OTHERS (1) Tohoku EPCO will not use submitted documentation for any purpose other than inspection and selection of prospective suppliers or conducting business transactions (2) The documents provided by Tohoku EPCO including specifications, quotations and instruction manuals, as well as extraneous materials submitted by suppliers to Tohoku EPCO, shall be written in Japanese (3) During the procurement process, inquiries should be directed to the Headquarters' Materials Department. [Reference] You can see the procurement plan by downloading a right icon. ·Procurement Procedure's Flowchart(PDF 7k)