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2. Details of purchasing procedure
The specifications and number/quantity and delivery of equipment, devices and materials are determined by the department(s) that will be using the product(s) or materials. The Purchasing Department conducts purchase activities based on purchase requests submitted by the/these department(s).
 
The Purchasing Department, at its sole discretion, selects companies from which estimates will be sought. Suppliers are selected from the files of "Companies with Previously Established Business Relationships", "Companies from Which Estimates Can Be Requested" and "Products and Suppliers". Selection is made by comprehensivly evaluating such factors as the quality and performance of the equipment, device(s) or materials to be purchased, compatibility with existing facilities, degree of reliability, product requirements including safety, delivery time, the scale of the order, after-sale service and the company's previous business record. As a rule, Osaka Gas asks several companies to submit estimates. However, only one company may be specified for estimate submission in such special cases as those concerned with industrial property rights, those requiring maximum levels of safety that only one specific supplier can ensure, cases where only one specific supplier can assure compatibility with existing facilities, or in case of urgency.
 
As a rule, when requesting an estimate from a company that it has selected, Osaka Gas will set out a specification from listing Osaka Gas's requirements in respects of quality, performance standard, size, inspection and method of inspection. The selected companies will be asked to submit cost estimates and specifications to Osaka Gas prior to a specified date.
 
Specification sheets submitted by potential suppliers at their own expense are checked by the Purchasing Department and the department(s) that will be using the product(s), in order to determine whether the required standards are met by the product(s). All products must pass this examination. During this process, Osaka Gas may request additions or changes to the specifications.
 
After valid cost estimates and specifications have been comprehensively evaluated in respect of price, technical requirements, etc. Osaka Gas will commence negotiation with the company with the most attractive proposal to discuss the amount of the contract and other terms and conditions. The selection of such a company shall be made by Osaka Gas at its sole discretion. Contract terms and conditions will be decided upon mutual agreement.
 
The business will be established upon conclusion of a contract, in the form of a written document if necessary. The obligations and liabilities of Osaka Gas arise only when such contract is concluded.
 
Delivery dates specified in the contract must be strictly observed. Precise details of the delivery schedule will be agreed between the supplier and the relevant department(s) of Osaka Gas. Delivered equipment, device(s) or materials must pass inspections conducted by the relevant department(s) of Osaka Gas. When deemed significant, an interim inspection may be conducted during the manufacturing process.
 
Payment will be made according to the payment terms specified in the contract.
   
3. Other information
(1) This "Guide to Business Transactions with Osaka Gas" explains the basic policies of the purchasing activities by Osaka Gas and does not have any legally binding power. The legal obligations of Osaka Gas arise only when a valid purchasing contract is concluded between a supplier and Osaka Gas and the terms and conditions of such a contract supersede the statements made hereunder in case of conflict.
(2) Osaka Gas and the supplier shall keep information made available through business under strict control and neither party shall reveal any confidential information to a third party, without the other party's written consent.
(3) If the delivery of equipment, device(s) or materials is made later than the date specified in the contract, Osaka Gas may demand indemnity for the damages or losses incurred.
(4) The contract between a supplier and Osaka Gas shall be governed by the laws of Japan and in the event a dispute arises in respect of the contract or any other matter, it shall be determined in accordance with Japanese law.
(5) Each Supplier, who concluded a contract with Osaka Gas, shall be responsible for observing all of the governmental regulations applicable to it or the transaction with Osaka Gas and shall indemnify and hold harmless Osaka Gas from and against any liability, damage, loss, cost, expense, suit or proceeding incurred by Osaka Gas in connection with such supplier's breach of the foregoing governmental regulations.
 
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