Relations with our suppliers

Proximus seeks to share certain principles with its partners, with the aim of creating a new work culture. This is to be on the basis of a partnership to provide high-quality communications services to customers.

Added value by monitoring basic principles:

• High quality of personnel
• Commodity Strategies
• Doing business efficiently
• Supplier selection and management
• Measuring, reporting and forecasting
• Globalization

Procurement's strategic objectives :

Proximus - Belgacom Mobile's procurement organization is the focal point for all contacts with suppliers concerning the commitment of company funds for materials and services. It is instrumental in establishing and managing effective supplier relationships. It is procurement's responsibility to locate and maintain the best source of supply. Our mutual success depends on every supplier supporting us in achieving the following strategic objectives: Total Quality.
In order to achieve excellence and customer satisfaction, our focus must be on continuous improvement in the quality of all products, processes and services.
Proximus and its suppliers must strive to examine and improve all of the systems by which we get things done. By making our suppliers an integral part of our overall quality process, we can offer better products right from the start. Total Cost of Ownership reduction.
In order to improve product cost and performance, Proximus and its suppliers must consider all the factors which when combined make up the true value over their lifetime of the materials, equipment, and services (=product) being purchased. Joint efforts to identify value and maximize results are the basis for intelligent buying decisions and will ensure higher quality at lower total cost.

Total cost of ownership (TCO)= cost for free and unlimited use throughout its lifecycle for the product as foreseen, from acquisition to disposal.The aim of TCO analysis is to identify, quantify, and ultimately reduce the overall cost associated with ownership of products.

Supplier Collaboration : Proximus' success in achieving Total Quality depends on viewing suppliers as a valuable extension of our own business. Our goal in purchasing is to build long-term business relationships with a select group of suppliers who share our total quality vision by consistently improving the highest quality products and services. Ultimately, this focus means selecting fewer but better suppliers.

Availability : Suppliers must be responsive to the rapid changes in design and manufacturing strategies. Reducing the time to deliver materials and services helps to bring Proximus products to market sooner and to reduce inventory exposure for both Proximus and our suppliers. The speed of technological changes drives our need for reduced cycle times, shorter lead-times, 100% defect-free materials and services, and on-time delivery.

Legal matters : In all its commercial agreements, purchases by Proximus are subject to its general purchasing conditions. Proximus proposes its standards for all contractual agreements. Our conditions and sample contracts are available upon request. See 'Contents' above under 'Legal'.

Procurement Organization :

Proximus' procurement organization consists of a centralized group, which teams up with each department within the company by dedicating a single person of contact (SPOC) per department or commodity. The purchasing process will be managed together with the departmental specialists.
Other functions such as Safety, Production, Training, Legal, and Finance contribute their expertise as needed. The team is jointly responsible for negotiation planning, supplier selection, and supplier evaluation and performance. This synergistic approach to managing Proximus' sources of supply achieves:

• Consolidated purchases with a reduced supplier base
• Standardized equipment and processes
• National and worldwide contracts
• Competitive cost worldwide

Suppliers can expect to interact with one or several members of such a team. This 'untraditional' and multifaceted structure allows procurement great flexibility in responding to the requirements of Proximus' dynamic environment.
Suppliers will find that procurement presents many different faces at Proximus.This depends on the type of materials and services, quantities, frequency of purchase, or user application.

We deal with over 1500 suppliers worldwide. With this supply base, we expect to use our standard Terms and Conditions in contracts. Ultimately, one point of view is constant - procurement is committed to procuring the highest quality materials/services, at the lowest total cost of ownership, with the best possible delivery, responsiveness, and technology available.

Principles and practices :

As competition should be at the basis of any procurement decision, the procurement department is chartered with full responsibility for the commercial purchase of goods and services and the authority to conduct together with the departmental specialists purchasing negotiations with suppliers.Therefore, whether you are large or small, we need your interest and support in meeting the following policies and procedures:

*Confidentiality and Intellectual Property Rights : Proximus respects the intellectual property rights of others-business associates, suppliers, and competitors alike. Proximus is committed to the protection of supplier's confidential information and insists on the same dedication to the protection of Proximus' disclosed confidential information. Furthermore, it is a requirement that Proximus' Confidentiality Agreement (or Non-Disclosure Agreement) in latest issue, be duly signed by the supplier and Proximus before the disclosure or exchange of any confidential information takes place.
Intellectual Property Rights are mentioned in 'All' our contracts. Proximus requires supplier indemnification for infringement of intellectual property rights claimed by third parties. Upon request the supplier or potential supplier can receive both documents.

* Ethical Standards : It is the policy of Proximus to conduct itself ethically and fairly in relation to its suppliers. Therefore Proximus extends equal opportunity to all suppliers presenting their products and services to us.

* Samples :Samples will normally be requested to evaluate a supplier's capabilities. Samples should only be received after a financial evaluation has been conducted. Test results will be provided to the supplier in a reasonable time.

* Gratuities : Proximus employees may not accept gifts or gratuities from current or prospective suppliers in excess of nominal value. Acceptance of such offerings may be interpreted as an attempt to improperly influence decisions. A simple meal with a supplier representative is a normal-, and timesaving-, business practice. Moderation must be exercised.

* Publicity : Proximus maintains a strict policy that neither party may use the other's name in advertisements, press releases, announcements regarding the winning of design awards, or business level disclosure without prior written authorization of Proximus.

* Non-discriminatory relations : It is important that suppliers are treated with honesty, respect and courtesy. Suppliers will be selected without any discrimination whatsoever (size of company, nationality of shareholders, etc.) and solely on the basis of objective and professional selection criteria, which are in accordance with Proximus' interests (price, quality of products and services, financial stability of the supplier, etc.). Proximus' realizes, however, that we compete in a market that requires global sourcing practices and we must utilize those sources.

* Controlled Substances : To ensure a drug and risk free environment, suppliers are required to support Proximus' policy which prohibits the use, sale, or possession of illegal drugs and alcoholic beverages on Proximus' premises or work areas.

Safety Health and Environment (SH&E) :

Proximus expects suppliers to understand and fully comply with all applicable international, national, state and local laws and regulations, including, but not limited to, all safety, health and environmental (SHE) and related laws and regulations. In addition, suppliers must agree to abide by all Proximus rules, including but not limited to all applicable SHE policies, procedures and guidelines.

Further, to the extent that suppliers obtain, use, handle, or transport hazardous materials (as defined by any law, standard or practice) on Proximus' property or to perform work for Proximus, suppliers must warrant that they understand the nature and hazards associated with the use, handling and transportation of any such materials.
Suppliers also must (i) agree to be fully responsible and indemnify Proximus for any liability resulting from the use, handling or transportation of hazardous materials by suppliers or their contractors, and (ii) have in place decision, management, control and continuous improvement systems to effectively manage the product safety of such materials.

For the latest issue of safety policies please contact our Safety Health and Environmental Affairs Manager.

The above-mentioned principles and practices described in greater detail in the procurement manual. Each member of the selection team guarantees the same objective Proximus approach with respect to his or her relation of interest.

Inquieries, Quotations and Awards :
Departments other than procurement may initiate inquiries; however, for your own benefit we would like you to keep us informed on all issues.
Purchases are based upon the submission of competing offers. Proximus will seek proposals from selected qualified suppliers with whom we are willing to do business. Further negotiation may be conducted after the submission of a proposal, and business will be awarded based upon strategic issues and total cost of ownership or cost/quality ratio.
This concerns new (specific) as well as on-going activities, and gives you an indication of our internal process.

Ongoing :
Review of procurement policies and procedures : Both policies and procedures will be subject to continual review and modification to ensure that they are appropriate to the times and scope of activity.
Planning : All procurement-related activities will take place in the context of a procurement plan or refer to an approved action plan.
Contact with suppliers, gathering of price data : The number and location of suppliers are constantly changing and many of the items required to conduct selections are improved on a regular basis. Therefore, it is necessary to maintain regular contact with suppliers in order to keep abreast of changes in companies, specifications, and costs.
Liaison with shippers : Establishing and maintaining rapport with shippers is essential when an organization is involved in moving goods over significant distances from suppliers to their destinations. It is also advisable to remain abreast of Customs requirements in the destination country in order to avoid delays in arranging release of shipments. Responsibility will be governed by the 'INCOTERMS'.
Reporting : Regular reporting, both internal as well as external, keeps track of activities and assists in identifying problems and developing appropriate solutions. Supplier tracking is based upon our Total Vendor Rating System (TVRS).
Cost control : Cost control is a critical aspect of the management of our company and further ensures an effective relationship with procurement. Cost control is the entire system by which costs are managed, contained, and documented and consists of the defined framework surrounding procurement, i.e. planning (both procurement planning and budgeting), regular price surveys, competitive contract awards, procurement tracking, program reviews, and audits.
Procurement tracking : To ensure that the procurement process proceeds as smoothly as possible, procurement action is tracked. Proximus' tracking system will follow the dates of initiation and completion of all actions related to the procurement exercise like; release of the Request for Quotation (RFQ), assessment of submissions, contract award, shipment date, arrival at customs, release from customs, delivery of materials, etc.

Specific :

Procurement procedures will vary according to the cost and complexity of the item(s) being purchased: the simpler the procurement, the simpler the procedure. Larger procurements, in terms of cost, complexity, or after-sales installation and service arrangements that require establishment of a contract, are more involved. The following general guidance pertains to larger, more complex procurements.

Planning : As previously stated, all procurement should take place within the context of a plan. This procurement plan consists of a needs-assessment and selection schedules, which can be subject to last-minute changes, so the likelihood of on-time delivery of materials and services is increased significantly by advance planning. A plan for both the overall implementation of the selected project and, specifically, the procurement of required commodities, should be established as early as possible. This plan should be as detailed as possible and should include a time-line specifying deadlines ensuring that personnel and financial resources will be brought to bear in an efficient and timely fashion.

Draft specifications : Good specifications are a prerequisite to good procurement: in order to prepare a valid bid, the potential supplier must have a clear and accurate description of the technical requirements for the material, product, or service being procured. If the expertise does not exist in house to establish clear and accurate specifications, it is advised that outside assistance be sought.

Approval of specifications by the end-user as required : The end-user must approve the specifications prior to the issuance of the Request for Quotation (RFQ).

Preparation of RFQ : A letter of invitation to bid will state the name of the contracting agency and the purpose of the RFQ, and will include a list of the items enclosed which, depending on the complexity of the material or service being procured, might consist of the following:

• instructions to bidders;
• bid/award/contract form;
• bid schedule;
• forms of bid and performance bonds;
• conditions of contract;
• technical specifications;
• evaluation criteria (price, warranty, service, etc.);
• any other relevant factors which may be taken into consideration.

When dealing with the usual election commodities, this list can often be shortened to details describing the type and conditions of contract and the specifications. The selection team, in some cases, may insist on approval of the RFQ before issuance.

Identify suppliers : A list of potential suppliers must be drawn up and a determination of reliability and quality of service made. Depending on the complexity and value of the items being procured, local capacity, and time constraints, the bid may be put out for international competition.

Issue Request for Bid : The RFQ should be sent to a reasonable number of the previously identified suppliers. Other suppliers can be sent the RFQ on request if they hear about it from other sources.

Obtain at least three bids :In order to ensure adequate competition and thereby maximize resources, at least three competing bids should be received. However, it is possible that on occasion there may be fewer than three qualified bidders. In all cases, transparency must be maintained. Exceptions to competitive bidding are granted when:

• Sole source purchases
• Purchases of used equipment
• Emergency purchases
• Purchases from governmental or public bodies

On the date stated in the RFQ, open the submissions and review competing bids : An internal review committee is often assembled for the purpose of reviewing the submissions and making a supplier selection. The decision to constitute a review committee will depend on the cost and complexity of the procurement. Review criteria will include :

• completeness of bid;
• errors in calculations;
• conformance to conditions;
• responsiveness to technical requirements;
• authorized signature.

Reasons for the choice of a specific supplier should be documented.

Awardee/Bidder notified of results : All bidders should be advised of the decision of the review committee and thanked for their participation by means of a letter.

Establish contract : The contract should address the method and schedule of payment, the date by which goods or services are to be delivered, the responsibility for the installation of any equipment, the terms of any applicable guarantee or warranty, and maintenance.

Supplier/ contractor completes work : Will be part of the Vendor Rating System (VRS). These conditions are a well-defined part of the measurements, subject of the on-going performance level.

Coordinate delivery with the supplier : Will be part of the Vendor Rating System (VRS). These conditions are a well-defined part of the measurements, subject of the on-going performance level.

Reception and inspection of merchandise is essential to ensure both quality and quantity : Will be part of the Vendor Rating System (VRS). These conditions are a well-defined part of the measurements, subject of the on-going performance level.

Display of needs assessment:

Supplier Selection :

Proximus - Belgacom Mobile relies heavily on the expertise and abilities of our suppliers to help us succeed. We invest significant effort in the search for qualified and responsive suppliers because we seek the best partnerships. If you wish to do business with us, you may need to complete our Supplier Qualification process:

• Demonstrate financial stability;
• Meet Proximus' product and service needs;
• Score at least acceptable on our Supplier Evaluation Questionnaire;
• And, it is to your advantage to be ISO 9000 registered (certified).

Direct your questions regarding the qualification process to one of our Buyers.
Acceptance as a Qualified Supplier does not assure or guarantee automatic award of business.

Supplier Evaluation :

Proximus' quest for Total Quality, Cycle Time Reduction and other strategic objectives mentioned earlier in this guide, effectively limit the number of suppliers that meet our requirements. These objectives make it increasingly difficult for companies to become qualified to supply products and services to Proximus.
Successful sourcing at Proximus is not achieved solely on the basis of securing competitive bids. We are not looking for the lowest prices, but for the best total cost of ownership. We wish to work with suppliers who are not only capable of, but also motivated to promote, the sharing of Proximus' standards for total quality and continuous improvement. Companies under consideration as potential suppliers are evaluated in a process using among other things the following criteria:

• Quality
• Technology
• Productivity
• Process Control
• World-wide Cost Competitiveness
• Innovation/New Ideas
• Financial Stability
• Delivery Predictability/Reliability
• Service
• Management Philosophy
• Training Programs
• No Child Labor

Proximus expects to establish long-term relationships with capable suppliers and work closely with them over time to achieve high levels of quality and productivity. This process involves communicating intentions and expectations clearly, defining measures of success, obtaining regular feedback, and implementing corrective action plans to improve performance.

Commercial position :

To be sure having selected the best partner in the current very dynamic and rapidly changing world, we like to evaluate actual negotiated prices compared with the present market situation on a regular basis.

Non Compliance Reporting (NCR) :

The Total Vendor System, depicts here below, is also related to non-compliantsences. Since this is an integrated system, having NCR's will impact the final score directly.

Brief quality prospective :

Proximus' Total Vendor Ratings System consists of 3 blocks in which the level of importance is indicated by its percentage.
Block I is evaluated prior to the process by sending the Supplier a Questionnaire. See Supplier Selection.
Block II is the most important, in which we measure by giving weightings in relation to its relative importance. See Supplier Evaluation.
Block III: evaluation of the competitiveness of the Supplier in its market segment.