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This policy is designed to establish formal documentation of key philosophies and
procedures regarding disposition of claims and the justification behind the disposition.
It is not intended to be an all-inclusive document covering all scenarios that may
arise. Duferco-Farrell / Sharon Coating reserves the right to handle each claim
individually, based on the circumstances surrounding the claim in question.
By its very nature, parameters surrounding steelmaking and finishing processes cannot
always be precisely known. It is therefore technically impossible to provide unconditional
assurance of complete compliance with all prescribed requirements. As an example,
variation in temperature control cannot always be regulated with exactness, and
as such, induces a small amount of variation in mechanical properties of the material
within a given coil or coil-to-coil within a given heat lot. It is therefore not
reasonable or practical to guarantee detection and rejection of every portion of
a steel coil that varies from required specifications with regard to dimensional
tolerances, chemical composition, mechanical properties, internal conditions, or
surface quality. Such factors are considered in the dispositioning of claims by
Duferco-Farrell (DFC) and Sharon Coating, LLC (SC), herein referred to as ‘the
supplier’.
All claims submitted to the supplier by the customer will be evaluated on the basis
of technical merit and in accordance with established policies and procedures by
the Technical Services Group. Disposition will be made on an individual basis subject
to the outcome of the claims investigation, which hinges primarily on integrity
of the supporting information provided by the customer.
Unauthorized deductions occurring prior to submittal, disposition, and settlement
of a claim constitutes nonpayment. Subsequent consequences include but are not limited
to shipping hold, credit hold, and / or loss of discount privileges. Claims declined
on a technical basis can be appealed through the supplier’s Commercial Group.
GENERAL REQUIREMENTS
The following individual parameters apply generally to all customer claims submitted to the supplier.
1.0 Procedure: If material furnished by the supplier does not meet order
requirements, a claim should be submitted with the necessary supporting information.
All claims should be submitted by the customer to the appropriate technical services
engineer assigned to their account. All claims will be evaluated on the basis of
technical merit in line with published policies, applicable specifications, contracts,
purchase orders, and other defining information. The Commercial Group is involved
as needed when second tier resolution (appeal) is required.
2.0 Limitation of Remedy: The extent of acceptable remedy arising from a
product defective condition shall be limited to the replacement (invoiced) cost
of the material plus original freight charges. On a technical basis, the supplier
shall not accept liability for consequential or incidental damages such as processing
charges, loss of production, coating charges (paint, zinc), or freight to intermediary
processing or storage locations. Only initial freight cost from the supplier to
the original Ship To address is honored on the claim unless otherwise negotiated
on an individual case basis.
3.0 Defective Material Processing: It is the customer’s responsibility
to identify a defective condition in a coil such that an individual coil is not
processed beyond 10% of its weight. Processing beyond the customary 10% threshold
may lead to a partial claim decline on the part of the supplier. It is expected,
however, that the coil be processed up to 10% of invoice weight to determine if
the extent of the defect merits a justified claim to the supplier. This includes
blanks, cut lengths, coils, or slit mults from coils.
4.0 Right to Rework: The supplier reserves the right to request return of
defective material to the facility and rework the product if doing so is believed
to rectify the condition.
5.0 Provision of Supporting Evidence: So as not to delay the dispositioning
process, the customer must submit basic coil identification information with the
initial submittal of the claim that includes but is not limited to the supplier’s
coil number, claim weight, current size, current dimensions, and current condition.
It is the customer’s responsibility to provide adequate information in support
of the defective condition. This includes but is not limited to physical samples
of the condition, digital photographs, streaming video, inspection maps including
detailed descriptive information. Such information must be provided at the point
of claim submittal so as to immediately initiate the investigation. Failure to make
these provisions in a timely manner on the part of the customer will lead to a decline
disposition on the claim.
6.0 Reject By Association: Typically, a defective condition is isolated to
a single master coil. That is not to imply that multiple coils cannot be involved
in the nonconformance, but the supplier does not customarily accept claims for rejects
by association without sufficient evidence that the condition is contained within
each rejected master coil. For example, it is not to be assumed that a lamination
condition present in a single master coil implies that every coil on the same heat
is subject to that condition.
7.0 Purchase Order ‘Aim’ Specification: The supplier will make
every attempt to meet ‘aim’ requirement specified by the customer. Since
an aim can be specified by the customer and accepted by the supplier as tighter
than established mill capabilities, failing to meet such a requirement does not
constitute a valid claim.
8.0 Part Production / Fabrication Guarantee: While advance review of potentially
difficult applications that are to occur with the supplier’s substrate is
critical (via the Technical Inquiry Process), the supplier does not ‘guarantee
parts’. Once the supplier agrees to be technically capable of producing a
part after part review, the properties and material characteristics required by
the customer must then be defined. The supplier will guarantee to produce and certify
material properties as agreed upon through product development with the customer.
9.0 ‘Fit For Use’ Requirements: The supplier expects customers
to use reasonable judgment in defining a product nonconformance based upon a careful
alignment with true end use requirements. A claim shall be declined if the technical
investigation reveals an unreasonable discrepancy between end use requirements and
defect extent or severity.
10.0 Secondary Product: Secondary product is sold on an ‘as-is’
basis only with no warranty whatsoever expressed or implied. Additionally, the stated
specific reason a certain product is classified as secondary may not always include
all of the existing imperfections in the product. This is not to be construed as
a misrepresentation.
11.0 Shipment & Freight: The following requirements apply to liability associated
with material transport:
11.1 General Liability: The seller completes its obligation to the customer
when the material is loaded on a mode of transport specified as F.O.B. Mill. The
title of ownership and risk of material loss passes to the customer under these
conditions. Consequently, the buyer must negotiate directly with the delivering
carrier in the event of material nonconformance associated with shipment.
11.2 Shipments By Rail: When rail shipments are received, any damage or other
nonconforming condition that appears to be associated with rail transit is the responsibility
of the railroad. The rail carrier will instruct the receiver of the unloading and
inspection procedure at that time. The Technical Services Group shall be notified
after the rail carrier has been notified and the unloading instructions have been
issued. Failure to follow these requirements will forfeit the customer’s right
to a claim with the rail carrier and will render the supplier unable to assist in
pursuit of any claim against the rail carrier.
12.0 HSLA Metallurgical Testing Waiver (hot rolled, uncoated products): The
supplier will test two (2) coil ends per heat applied to a customer order on the
HSLA product line in accordance with the ASTM standard. Deviations or waivers from
the standard, as initiated by the customer, will be accepted if the order has not
been produced (i.e. currently not work-in-process). Acceptance of deviations is
contingent on the fact that the customer must be performing test sample collection
and actual testing internally or at an outside facility so as to be compliant with
the ASTM standard. Deviations from the standard, as initiated by the customer, will
not be accepted if the order has already been produced (i.e. currently exists as
work-in-process) on the grounds of the complications this creates (re-routing, rescheduling,
paperwork adjustment, re-marking of coils, relocation of coils) and the enhanced
possibility of error. Should a customer desire to waive testing across the board
or indefinitely, a signed waiver form must be completed and on file at DFC. Forms
are available through the commercial group.
13.0 Standard Non-Rejectionable Product Characteristics: The following standard
non-conformances are considered to be inherent to the applicable product and process
and are not justified claims.
13.1 Hot-Rolled Coil Ends: The as-hot rolled coil front end is uncropped
and will contain a nominal length of 15 ft. or less that will be intentionally coiled
hot. This portion of the coil may fail to meet customer specific mechanical properties
or hardness and will also tend to exhibit heavy mandrel reel kinks and crossbreaks.
Additionally, the first 15 ft. and the last outer diameter lap of an as-hot rolled
coil may fall outside customer-specific or ASTM standards for gauge and width.
13.2 Hot-Rolled Surface Quality: The supplier does not guarantee to produce
a controlled surface finish on as-hot rolled or hot roll pickled material.
13.3 Cold-Rolled Full Hard Ends: The head and tail end of an as-cold rolled
full hard coil without subsequent processing will exhibit off gauge in the range
of 75 to 150 ft. per end depending on the set-point or target gauge.
13.4 Cold-Rolled Full Hard Shape: There is no definitive shape standard for
a full hard product. Shape on a full hard product is not guaranteed without subsequent
leveling.
13.5 Cold-Rolled Full Hard Residual Surface Solution: Full hard coils produced
at the tandem mill are considered commercially clean, and will contain a residual
level of synthetic rolling solution on the surfaces inherent to the process. If
the customer’s process is sensitive to the residual solution (i.e. coating
adherence), it is the responsibility of the customer to adequately clean the surface
of the strip prior to processing / coating. Supplemental Policy Reference: Grade
80 Customer Claim Policy – Surface Issues.
14.0 Lamination Defects: The supplier does not accept claims for singular
or a low level concentration of lamination defects in coils. It is possible to experience
a baseline low level of laminations or slivers in a coil, and it is the supplier’s
expectation that the customer will work through such conditions, debiting back only
those portions of the coil(s) that are unusable. If such defects are concentrated
in coils, master coil rejects can be considered justified.
15.0 Crossbreak / Coil Break Defects: If a customer desires that hot rolled,
commercial quality shipments be free of coil breaks, crossbreaks or strain lines,
the material must be ordered as ‘temper passed’. Under normal circumstances,
claims will not be accepted for coil breaks or crossbreaks on unprocessed hot bands.
All purchase orders considered to be crossbreak sensitive must explicitly state
‘must be temper passed’. There is no guarantee of crossbreak sensitivity
on material ordered as hot-rolled drawing steel (with or without a temper pass)
due to the processing requirements necessary to meet these property levels. HR-DS
application requirements should be reviewed in advance with the Technical Services
Group.
16.0 Rust Conditions (uncoated material): The supplier will investigate each
rust claim submitted. The following criteria apply to all purchased materials:
16.1 Material that has been sitting unprocessed at a customer’s facility for
more than sixty (60) days will be subject to potential decline.
16.2 Received cold rolled coils should not be unpackaged until the steel has reached
room temperature to prevent condensation. Material ordered as ‘dry’
or as ‘wet temper’ (lower oil concentration for improved cleanliness)
will be more conducive to condensation rust and will be closely scrutinized for
liability. It is the customer’s responsibility to ensure such material is
consumed promptly. Failure to do so will constitute denial of the claim.
16.3 If specific rust preventative oiling practices are required, such information
must be included on the customer PO to the supplier. If no specific requirements
are specified, the default condition will be a ‘light RP oil’ of approximately
80 mg/ft^2 total. Claims cannot be submitted for the default condition if advance
notification did not occur. All non-standard oil requirements should be inquired
through the commercial group.
17.0 Surface Cleanliness Conditions: The supplier’s substrate in a
cold rolled and annealed condition is not to be compared or considered comparable
to a tin-mill product with regard to surface carbons, smut, iron fines, or cleanliness.
The supplier and customer shall establish surface cleanliness requirements in advance
of the first purchase order when surface cleanliness is considered a critical parameter
by the customer. Claims associated with surface cleanliness are subject to decline
if the advance notification of requirements did not occur.
COATED PRODUCT ADDENDUM
Products hot dip galvanized at Sharon Coating, LLC are produced in accordance with
ASTM A653 and A924 standard specifications.
1.0 Rust & Damaged Conditions – Notification: The supplier will investigate
each white rust and damage claim submitted. The premise of the investigation centers
on determination of source and liability and timing of notification and claim submittal
plays a key role in this determination. The following criteria apply to all purchased
materials:
1.1 If the customer or intermediary processor fails to identify and take exception
to a wet or damaged packaging condition immediately upon receipt, the customer forfeits
the right to a claim.
1.2 The supplier must be notified of a condition within three (3) days of receipt
of material. Failure to comply with this requirement constitutes decline of the
claim by the supplier.
1.3 Any rust or damage condition noted incoming must be noted on the receiving paperwork
by the customer and forwarded to the Technical Services Group.
2.0 White Rust Conditions: The customer should note that chemical treatment
and applied oil will help to increase the shelf life of the material, however, this
assumes reasonable measures are taken to protect the product such as atmosphere
controlled storage and adequate, undamaged packaging. Chem-treat provides better
protection than straight oil, and oil is slightly better than a dry product. The
following criteria apply to dispositioning of customer claims for white rust in
the as-galvanized product:
2.1 Claims submitted for chemically treated and oiled GI / GA material that has
been warehoused at the customer’s facility or intermediary processor for more
than sixty (60) days shall be declined. It is the customer’s responsibility
to store coils packaged in a dry, temperature controlled indoor facility. It is
also the customer’s responsibility to ensure the as-received packaging remains
in tact during the pre-fabrication storage life cycle.
2.2 Claims will not be accepted on any material that was ordered and produced as
‘no chem-treat / dry’ or simply as ‘dry’.
3.0 Hardness & Mechanical Properties: All mechanical properties are manufactured
to ASTM non-mandatory recommendations for CS/B, FS/B, DDS, and EDDS.
3.1 Customer specific requirements for CS/B, FS/B, DDS, and EDDS must be negotiated
in advance and included as part of the purchase agreement.
3.2 Graded material (i.e. SS Grade 50) and customer specific mechanical property
requirements will be guaranteed and must be clearly stated on the customer purchase
order. Mechanical property results will be reported to the customer in the form
of a metallurgical certification for these grades.
4.0 Spangle & Surface Appearance: Free zinc spangle can and will vary in
size and distribution across the surface in the HDG process. Slight variation is
considered typical. Gross variation in spangle will be considered as a valid claim
upon investigation and with regard to the ordered spangle.
4.1 The supplier’s base galvanized product is a minimum spangle coating. Zinc
crystals will always be visible in the coating. The customer understands that orders
entered as ‘spangle free’ are not produced with any change to the galvanizing
process parameters. The supplier does not produce or guarantee a product that is
truly free of visible zinc crystals.
5.0 Aging & Fluting: A non-IF (EDDS), as-galvanized product may not be suitable
for certain formations without producing fluting or stretcher strains. A small amount
of cold work (temper) will minimize or prevent this effect. If a product free of
fluting or stretcher strains is required based upon end use, the customer must specify
this on the purchase order.
5.1 Coils that have sat in inventory at the customer’s facility for more than forty-five (45) days are at risk for YPE recovery and stretcher strains during subsequent fabrication. Therefore, fluting claims will be declined under these circumstances.