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Lord Consulting - Quality Assurance Manual

Section 03 - Contract Review

SCOPE

Lord Consulting ensures that the procedure of Contract Review is carried out for each individual client contract. Contract Review ensures that Lord Consulting has the capability to meet the specified contractual requirements of the client. Contract Reviews ensure that client requirements are clearly understood, adequately defined and documented.

Contracts are reviewed on an individual basis. In the event of amendments to the contract, such amendments are agreed upon by all parties, documented and the appropriate personnel notified.

CONTENTS

03.01 Contract Review Procedure in the Act of Providing Quotations
03.02 Formal Written Quotations
03.03 Verbal Quotations
03.04 Budgetary Quotations
03.05 Follow up of Quotations
03.06 Contract Review Procedure in the Act of Receiving Orders


03.01 Contract Review Procedure in the Act of Providing Quotations

SCOPE

The following flow chart describes the procedure followed for providing all quotations. All reasonable steps are taken to obtain and document the customer's requirements.

section03-quote

03.01.01 Pricing of Quotations

03.01.01.01

Lord Consulting operates a controlled Price book (Section 05.05 of this Quality Assurance Manual) and this is referred to as the source of quoted prices wherever applicable to an inquiry.

03.01.01.02

Special Prices, or quantity prices, for a quotation are determined by, or requested from, the relevant Product Manager. In the event that a special price for a quotation is communicated to another staff member, by a Product Manager, that price is confirmed to the staff member in writing if the quotation is valued over NZD 10,000.

03.01.01.03

All calculations involved in a special price are recorded on a Price Calculation Sheet, along with any other relevant details and a copy if filed under the customer's name in the Head Office Filing System. All quotations over NZD 10,000 in value are checked prior to issue by the Managing Director or General Manager, and the process recorded by the approving person placing both his initials and the approval date on the Price Calculation Sheet. Should there be multiple items or calculations on the form, all are suitably checked and initialed individually.

03.01.01.04

Some classes of product and customer entail a degree of heightened sensitivity or technical complexity and in such cases the inquiry is referred to the relevant Product manager for instruction prior to a quotation being submitted. In particular the cases involved are as follows:

  • Dealings with the head offices of major NZ or South Pacific companies
  • Applications relating to the monitoring of HV electrical equipment
03.01.01.05

From time to time special sales promotions of limited duration are arranged by Lord Consulting and details are circulated to all relevant staff members by the initiating Product Manager. Staff members record the details of the promotion in such a way as to be familiar with the details when preparing quotations.


03.02 Formal Written Quotations

SCOPE

This procedure describes the guidelines followed for formal written quotations.

03.02.01

Enquiries are either received in writing or verbally. In the case of the latter all customer and enquiry details are recorded on a Price Calculation Sheet Form and the transcribed information repeated back to the customer for confirmation. All reasonable steps are taken to obtain and document fully the customer's requirements. Enquiries entailing referral to another staff member are relayed within half a working day, as practicable.

03.02.02 Identifying and Clarifying the Specification

03.02.02.01

A quotation is a legal document, therefore to align ourselves with the Consumer Guarantees Act 1993 we avoid implying to a customer that goods are precisely what they require, unless we are absolutely certain. Instead, we put a proposition to them which we feel best represents (from what we have to supply) what is most closely aligned to what we perceive to be their needs. Unless a customer has asked for a quotation for specific product we sell (e.g.. "Please give me a written quotation for a Megger PAT4DVNZ230 Appliance Tester") the quotation is prefixed with the phrase "We offer the following items for your consideration".

03.02.02.02

In the event of a "broad brush" request for prices on a complete category of products (e.g. "send me a quotation for your range of multimeters") an attempt is made to assist the customer to specify his requirements more accurately and to clarify if they really need a formal written quotation or just a set of appropriate data sheets, a trade price list and a covering letter. In this case the covering letter offers a "formal quotation" at the customer's request.

03.02.02.03

Our job is to suggest options, but not to imply full compliance with any specifications, especially verbal, unless absolutely certain. A simple statement such as "based upon our understanding of your application, the items offered below would appear to fulfill your requirements" would suffice if there is any room for concern.

03.02.02.04

When asked to quote for an item that is obsolete, outside the scope of our nearest alternative, or on a longer delivery time than the customer requires, a response is made to the customer with a clear statement as to our inability to meet their specifications and, where possible, including details of any alternatives we can offer. This response is made in writing, unless an immediate response is possible at the time of a verbal enquiry.

03.02.03 Specific things to follow when doing the Quote

03.02.03.01

Always begin by thanking the customer for their enquiry and refer to its date and nature e.g. "Thank you for your valued fax enquiry of November 1st pertaining to ...".

03.02.03.02

Use Item A, Item B etc to describe the items.

03.02.03.03

Clearly state the quantity of items on offer e.g. 1pce.

03.02.03.04

Give a complete but brief description, listing any standard accessories of note such as carry cases. It is not normally expected that leads, batteries and handbooks be itemised unless they are not normally supplied as standard. If a lot of items are offered as standard, simply refer to this as "supplied with all standard accessories, as detailed in Brochure ABC, attached".

03.02.03.04

State prices as "Price : $1,234.00 EA" and use the format "NZD 1,234.00 EA" when quoting offshore customers.

03.02.04 Major Headings and Explanatory Comments

03.02.04.01 Prices
a)

State if prices are net or if there is a discount (If a discount, state this in the form that their discount is "Less X% from the above prices", quoting only the trade/list price in such cases)

b)

State if goods are priced on the basis of Ex Store CHCH, or inclusive of delivery either to the customer's store or some other nominated destination e.g. to site.

c)

State that if in the case that goods are not available from stock, prices are "firm" or "subject to exchange variation". If prices are firm, use the words "Firm (i.e. not subject to exchange variations for orders placed within the validity period)". In the case of a firm price being deemed desirable, consult the Product Manager for the price. If the prices are to be tied to an exchange rate, use the wording and format "Prices based on the currency exchange rate of (USD 0.49) to (NZD 1.00) and we reserve the right to adjust the final price in the event of any variation".

d)

State that GST is additional.

e)

State that, if there is a quantity of goods at a special price; "The prices are applicable to the quantities stated above"

03.02.04.02 Validity

Unless there is any reason to state otherwise, always put a 28 day validity onto the quotation.

03.02.04.03 Delivery
a)

Lord Consulting embraces the International Chambers of Commerce terminologies ("INCOTERMS") for delivery terminologies (e.g. C&F, CIF, FIS, FOB, DDU, etc.).

b)

State the individual deliveries for all items quoted, introducing them by their item numbers, or, if all have the same delivery, as "all items".

c)

State for goods normally ex stocks, a clarification as to whether goods are available from stock, are available subject to prior sale, or are "Ex Stocks arriving in approximately X weeks". Sometimes if delivery is only a guide, state that goods are "Normally available from stocks", this implying we have a policy of keeping units on the shelf.

d)

Where goods are indented to supply the order, the Ex Works times and transit times are stated as follows "Approx 4 weeks Ex Works, plus approx 2 weeks total transit time by consolidated airfreight".

e)

If the indent delivery times are only a best guess, state that we would be only too pleased to provide a firm delivery statement upon request.

f)

Where the option of a faster delivery could be possible by resorting to a more expensive freight method comment to the effect that a faster delivery method will gladly be quoted on request.

03.02.04.04 Literature

Include a full listing of what is enclosed. Where a faxed quotation is being done, put only the essential data and, if necessary, say that full literature is to follow in the mail.

03.02.04.05 Warranty

If required to be stated, repeat the Manufacturer's Warranty. Generally, this is "12 months, parts/labour". If this is not certain, simply stating that "We extend the Manufacturer's Warranty" is an adequate statement.

03.02.04.06 Service Facilities Available

If required to be stated, put in a statement to the effect that "Full service facilities are located at our Christchurch-based National Service Centre " or whatever might indeed be the case.

03.02.04.07 Evaluation of Goods

If required to be stated, first gain the consent of the Product Manager. This being acceptable, offer an item for evaluation for a stated period (generally 2 weeks) upon receipt of either a written request or purchase order, this assuming we either have an item to lend them or that we are prepared to get one on the strength of the prospect. Clearly this is dealt with according to the peculiarities of the situation.

03.02.04.08 Terms of Payment

Usually the statement "20th of Month following date of Invoice" is sufficient. Where the customer does not have an account, this must be followed with the words "Subject to your opening an account with us, an Application for Credit form and AVO NZ Standard Terms and Conditions of Sale are attached". In the specific case of offshore customers, use the wording "By T/T, upon receipt of our invoice, to our bank account 060831 0104767 (TR Lord and Associates Ltd t/a Lord Consulting) at the National Bank, Victoria Square, Christchurch, New Zealand or as otherwise negotiated with our Commercial Manager". Where other terms of payment are deemed necessary, they must first be approved by the Commercial Manager.

03.02.04.09 Lord Consulting Terms & Conditions

Typed quotations are printed on Lord Consulting letterhead. All quotations are concluded with the sentence "This Quotation subject to our Standard Terms & Conditions of Sale as attached". It is our responsibility to ensure Terms & Conditions of Sale are brought to the attention of the purchaser.

03.02.04.10 Signature

All quotations are completed by the addition of the name and title of the writer. Where practicable, quotations are signed in ink by the writer or a designated proxy. For reasons of technical practicality, emailed quotations are not generally signed.

03.02.04.11 Emailed Quotations

All formal emailed quotations are conducted via a covering email to the recipient to which is attached a formally-constructed Microsoft WORD format quotation.

03.02.04.12 Quotation Reference Statement

After the signature line, the following sentence is placed on both typed and faxed quotations: "Please refer to this quotation when ordering."

03.02.05 Copies of Written Quotations and Correspondance

03.02.05.01

Up to four copies of each written quotation or items of correspondence are made in either electronic or hardcopy format at the time of typing and distributed as follows:

a)

One copy to the Head Office Correspondence File, in all cases. Copies are processed promptly for filing with photocopies taken by any personnel wishing to retain the quotation for a longer period.

b)

One copy to the appropriate Field Sales person or originator for their information and follow up (Section 03.05 of the Quality Assurance Manual). These copies are tagged with the initials of the salesperson in the top right hand corner.

c)

One copy to the General Manager for his information.

d)

One copy to the appropriate local Branch file in the event that the quotation is prepared and forwarded from that Branch.


03.03 Verbal Quotations

SCOPE

This procedure describes the guidelines followed for offering verbal quotations.

03.03.01

The approach described in Section 03.02.02 is followed without recourse to the written responses. Where the amount in question exceeds $1000 or is unusual or significant in some other way (e.g. quantity) it is recorded on a Price Calculation Sheet for eventual filing. Copy as described in Section 03.02.05, and a copy sent to the Head Office correspondence file (as per 03.02.05.01 a).

03.03.02

If the price quoted differs from the normal published price applicable to the customer in question, the quote is recorded on a Price Calculation Sheet and copied as described in Section 03.02.05.

03.03.03

If the value of the item in question is over NZD 10,000 the quotation is followed up in a written format.

03.03.04

Details of GST, freight and exchange rates are always included.

03.04 Budgetary Quotations

SCOPE

This procedure describes the guidelines followed for offering budgetary quotations.


03.04.01

When a customer requires an estimated price only, for budgetary purposes, it is not necessary to prepare a formal quotation.

03.04.02

Budgetary quotations valued at under NZD 10,000 are done in either a verbal, email, fax, or formal written format. When a formal written format is chosen, the Procedure described in Section 03.02 is followed.

03.04.03

Budgetary quotations valued at over NZD 10,000 are to be done in a written format. Should a formal written format be chosen, the Procedure described in Section 03.02 is followed. All budgetary quotations over NZD 10,000 in value are copied to the Christchurch Head Office as per 03.02.05.01a

03.04.04

That the prices given are "Budgetary" is clearly stated. The situation with regard to GST must be stated, and all quotations done in this manner must include the phrase "We will be happy to provide a formal quotation at your request".

03.04.05

Aside from the foregoing comments, budgetary quotations are dealt with as described in Section 03.03 - Verbal Quotations.


03.05 Follow up of Quotations

SCOPE

This procedure describes the guidelines regarding follow up of quotations.

03.05.01

Follow up of written or otherwise documented quotations is conducted in all cases.

03.05.02

Copies of quotations are distributed to staff as described in Section 03.02.05.

03.05.03

Where practicable, follow up is conducted within 5 working days of receipt of the copy of the quotation, and thereafter as either agreed with the customer or as deemed to be sufficient to support the inquiry.

03.05.04

At the discretion of the person normally (territorial) or specifically designated to follow up a quotation, a telephoned, faxed or personal visit follow up is employed.

03.05.05

The outcome of each follow up is documented on the copy of the original quotation, together with details of any future planned follow up, and forwarded promptly to the quotations originator or relevant Field Representative. Where either the quotation is valued at over NZD 10,000, or where the technical or strategic issues dictate, the General Manager is informed by the originator of the quotation and a follow-up strategic plan is determined.

03.06 Contract Review Procedure in the Act of Receiving Orders

SCOPE

The following Flow Chart describes the procedure followed for receiving orders. All reasonable steps are taken to obtain and document the customer's requirements.

section03-order-r1


03.06.01

Any amendment or notation appended to an order is via an attached cover page. Apart from supply/delivery details i.e. packing slip number and delivery date, the original copy of any order correspondence is never defaced.

03.06.02

Verbal orders are transferred upon receipt to a multipurpose, triplicate order form and all details recorded are repeated back to the customer before concluding the conversation.

03.06.03

In the event that the contract review procedure determined that Lord Consulting were, from the outset, unable to supply goods which met the customer's requirements either:

  • Return the original copy of any written order to the customer with a written covering statement of the position;

or

  • Should this outcome be determined during the placement of a verbal order, a verbal statement of the position is regarded as an adequate conclusion.

03.06.04

In the event that a change to the accepted order contract is made at a later date, by either ourselves or the customer, the Contract review Procedure for the act of receiving orders is followed. The resultant outcome is documented in writing and the customer notified.

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