Chugoku Electric procures equipment and materials according to the following Standard Procurement Procedure.

1. Prospective Supplier Selection

Prospective suppliers will generally be selected from Chugoku Electric’s list of registered suppliers after the Group Management Div receives a request for procurement from a section that needs equipment or materials.

2. Bid Request

Chugoku Electric generally procures a product by means of competitive bidding, whereby two or more potential suppliers are asked to offer proposals. Chugoku Electric may request a proposal from a specific supplier, however, when technical competence, patents, production capacity, equipment compatibility, or other factor is of particular importance.

3. Bid Submission

Written proposals will be deemed valid only if they meet Chugoku Electric deadlines, specifications, and conditions. Proposals based on specifications different from those designated by Chugoku Electric will be considered, however, if such alternative specifications satisfy Chugoku Electric functional and performance requirements.

4. Supplier Selection and Price Negotiation

As a general rule, Chugoku Electric negotiates the final price of a contract with the low bidder only. Unsuccessful bidders will be informed of the results upon request.

5. Contract Conclusion

A contract should, in principle, be in compliance with the clauses prescribed by Chugoku Electric when placing an order. When circumstances necessitate, however, a contract may be drawn up in accordance with terms and conditions agreed upon between Chugoku Electric and the supplier.

6. Delivery, Inspection, and Payment

Products will be inspected upon delivery by Chugoku Electric to confirm conformance with contract stipulations. The supplier’s presence at such inspection and/or assistance may be requested.
Payment is usually made in the month following acceptance. If warranted, such as when long lead time is needed to manufacture a certain type of product, Chugoku Electric will make scheduled disbursements or other special payment arrangements.

7. Other

(1)	A party to the contract shall not divulge classified or otherwise sensitive information in its possession without the express written consent of the other party.
(2)	Chugoku Electric may also make formal claim for damages due to late delivery of contracted goods.
(3)	Any questions or comments for Chugoku Electric at any stage of the procurement procedure should be addressed to the Group Management Div. Chugoku Electric will respond to each party in good faith.