Page 1 of 14 1 PURPOSE 1.1 This service policy provides a defined structure for the required interaction between the various boiler groups of Cleaver-Brooks, Inc. and their Authorized North American Sales and Service Representatives. 1.2 This policy is not intended to contradict sales policy, parts policy, sales or service contracts, and/or sales/service agreements between Cleaver-Brooks, Inc. and its authorized Representatives. In the absence of contractual agreements to the contrary all policies in this manual shall apply. 2 RESPONSIBILITIES 2.1 The Manager of Service and Warranty shall approve and be responsible for ensuring maintenance, adherence and training to this policy. 2.2 The review and approval process of this policy shall be documented, controlled and distributed as a function of the Corporate Quality System and be compliant to ISO 9001-2008. 3 POLICY 3.1 Representatives Responsibilities & Obligations 3.1.1 Each authorized Representative must support the Service and Aftermarket areas, as appropriate, by providing a service organization capable of commissioning, troubleshooting, repairing and assisting customers in the application of specific equipment. 3.1.2 Authorized Representatives are responsible for representing the interest of Cleaver- Brooks, Inc. in conjunction with those of their own company, through the application and administration of Cleaver-Brooks, Inc. policies and procedures. 3.1.3 The authorized Representative must provide value to our customers, which is the foundation for growth of the Service and Aftermarket business for both their company and Cleaver-Brooks, Inc.
Page 2 of 14 3.1.4 The authorized Representative must maintain an adequate staff as appropriate to: a) Provide timely and thorough performance of sales contracts, as appropriate, by commissioning equipment sold into the representative s assigned geographic territory. b) Provide complete, thorough and timely follow up service, including emergency service as required and as appropriate, for equipment in their territory. 3.1.5 It is the obligation of all Representatives to report the following information, in a timely manner to the Warranty and Service group of Cleaver-Brooks, Inc.: a) Immediately report every incident involving any injury or property damage. b) Scrapping of Boiler(s) c) Resale of Boiler(s) 3.1.6 It is also the obligation of all Representatives to maintain a history file on all units that they service. Always include the unit number and job name on all correspondence with Cleaver Brooks, Inc. 3.2 Occurrences/Incidents 3.2.1 Liability for occurrences/incidents involving Cleaver-Brooks, Inc. equipment is not limited to the equipment proper, nor is it limited to the manufacturer. Legal action involving negligence, as part of the product liability, can extend to the representative. Therefore, it is in the best interest of everyone to ensure immediate notification of an occurrence/incident. 3.2.2 When an incident occurs involving a Cleaver-Brooks, Inc. product, property or personnel, it is essential that the Cleaver-Brooks, Inc. Service Department be notified immediately. We can dispatch authorized Cleaver-Brooks, Inc. personnel to investigate or to direct the actions that may need to be taken in a representative s area. Refer to the Service Department Contact listing (Exhibit 1) for the appropriate group s emergency contact information. 3.3 Territories 3.3.1 Each authorized Representative is required to perform service work and support part sales in their specific territory. Specific geographic territories are indicated in each representative agreement. Any out-of-territory service work or part inquiry must be referred to, and/or conducted with, the appropriate representative.
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Page 4 of 14 3.4 Warranty 3.4.1 Cleaver-Brooks, Inc. equipment and parts have a standard warranty. Consumables are not covered. The standard warranty is explicit and only covers the replacement of parts. The standard warranty does not cover any labor charges associated with the installation of the warranted part(s). The standard warranty applies to the following: a) For new equipment 18 months from the date of shipment or 12 months from the date of start up, whichever comes first. b) For aftermarket parts: 18 months from the date of shipment or 12 months from the date of installation, whichever occurs first. 3.4.2 A warranty extension may be offered as a condition of the original equipment sale under certain circumstances. Refer to the Cleaver-Brooks, Inc. Sales Policy. 3.5 Warranty Claims 3.5.1 Upon discovery of a defect part the Representative must notify the appropriate Warranty Analyst by submitting a written warranty claim notice using a Return Material Authorization (RMA) form. The form shall be directed to the Warranty Analyst via email or fax. All defects must be communicated within thirty (30) days of the discovery of the specific defect. 3.5.1.1 Once the RMA form is received and approved, a replacement part(s) will be ordered and shipped per the RMA form. Credit will not be given in lieu of a replacement part. 3.5.1.2 An invoice for the replacement part(s) will be sent to the Rep with 60 day terms upon shipment of the replacement part(s). The invoice is due if a tracking number has not been received within 30 days, or the supplier denies the defective part claim. 3.5.1.3 Once an RGA # is received from the vendor, the Rep will be sent a packing slip. 3.5.1.4 Rep has 30 days to respond to the Warranty Analyst with the tracking number of returned part(s). Failure to provide a tracking number within 30 days will require the RMA invoice to be due and payable per the standard Rep terms.
Page 5 of 14 3.5.1.5 CB shall provide the vendor 30 days for evaluation of the defective part. 3.5.1.6 Credits (if applicable) for warranty part(s) by the vendor will be submitted to the Rep and shown on the Navigator. 3.5.2 Expenses incurred in replacing, repairing or returning the equipment or any part(s) are not covered under the warranty agreements. Labor charges associated with the installation of the repaired/replaced part(s) are not covered under the warranty agreements. 3.6 Back-charges 3.6.1 Back-charges are the acceptance of financial responsibility, or part thereof, by Cleaver- Brooks, Inc. to rectify any non-conformance in products provided or in execution of contractual obligations. 3.6.2 Back-charges may cover labor, materials and expenses incurred by a representative or customer when the standard warranty (Ref. 3.4) coverage is not applicable. Back-charge requests will be reviewed for consideration when a deficiency is reported within the standard warranty period. 3.6.3 Back-charges can be associated with sales, engineering, manufacturing or supplier deficiencies. The Service Department Authorization form (SDA) will be used for processing of all back-charge requests. 3.7 Service Department Authorization (SDA) 3.7.1 When a problem arises that may qualify for authorization under the back-charge definition, an SDA form must be completed and submitted prior to taking corrective action. Cleaver-Brooks, Inc. is not obligated to pay for any work performed prior to being approved. Work performed prior to approval from Cleaver-Brooks, Inc. is at the representative s risk. 3.7.2 It is understood that there may be times when emergency situations arise and work needs to be done immediately. Every effort will be made by the Service Department to respond to urgent claims the same day that it is submitted. In the event corrective action must take place prior to the approval of a claim, verbal communication to the Service Manager shall be required. The SDA must be submitted no later than five (5) days after the work commences.
Page 6 of 14 3.7.2.1 Cleaver-Brooks Division Submit SDA's by E-mail to SDA@cleaver-brooks.com Submission of an SDA does not guarantee approval. Only returned forms assigned an SDA number will ensure payment of resulting invoices. The applicable Service Department will respond to SDA request completely filled out as follows: 3.7.3.1 Dollar Amount of SDA Turn Around Time Less than $5,000.00 Within 2 business days Greater than $5,000.00 Within 3 business days 3.7.4 The Representative Service Manager must review and approve the SDA prior to submitting the SDA to the Cleaver-Brooks, Inc. Service Department. 3.7.4.1 SDA requests are to be completely filled out with sufficient information to fully explain the problem. Complete one SDA for each problem/unit at the job site. Supporting documentation does not need to accompany the SDA, unless requested. These additional documents must accompany the invoice. 3.7.5 All back-charge claims are subject to review and approval by whomever the Manager of Service and Warranty appoints. 3.7.6 The SDA form with the SDA number on it will be returned to the submitter as an authorization to proceed with the corrective action proposed and Cleaver-Brooks, Inc. will accept the resulting invoice. 3.7.7 If, at any time prior to payment of the SDA any misrepresentation is discovered pertaining to the approved amount on the SDA, Cleaver-Brooks, Inc., Inc. has the right to refuse payment of any or all of the SDA. As you proceed with the work, if circumstances change, additional work/parts are required, or if the original estimate is inaccurate, contact the Service Department immediately. 3.7.8 Appeal process for denied SDA claims 3.7.8.1 In the event that an SDA claim is denied, and the Representative would like further consideration, he shall contact the Warranty Manager by email. 3.7.8.2 If the Warranty Manager still denies the claim, the Representative may submit a written appeal to the SR. VP of Operations. This written appeal may be in any form.
Page 7 of 14 3.7.8.3 The appeal shall be submitted within two weeks of the denial, and shall include all relevant information required for consideration. 3.7.8.4 The SR. VP of Operations shall respond within two weeks of receipt of an appeal, assuming all supporting information and documentation has been provided to properly evaluate. 3.7.8.5 In general, appeals for denied SDA claims that are in clear violation of company or warranty policy will not be considered unless extenuating circumstances exist and are clearly identified in the appeal process. 3.8 Invoices/Payments of SDAs and start-up 3.8.1 The following applies to all invoices submitted by authorized Representatives to Cleaver-Brooks, Inc. for start up services or backcharge work. 3.8.1.1 Requirements: a) Separate invoices are required for start up and for back-charges. b) Indicate on an SDA a request for third party billing. The Service Manager must approve third party billing. If third party billing is approved, the billing from the third party must be included and shown as an item on the invoice. 3.8.1.2 Invoices must be sent to the following address Cleaver-Brooks 221 Law Street Thomasville, GA 31792 Attn: Start-Up / Back-Charge Dept Or e-mailed at SDA@CleaverBrooks.com 3.8.1.3 Timing for submitting invoices for payment 3.8.1.3.1 Invoices for SDA s must be received within ninety (90) days of the date of approval or they may not be paid. Special circumstances require notification within the ninety (90) day period. 3.8.1.3.2 Invoices for start-up and additional start-up must be submitted prior to the expiration of the standard warranty period, or they may not be approved for
Page 8 of 14 payment. In special cases where project or site conditions would prohibit start-up activities to commence within 18 months after shipment, notification must be given to Cleaver-Brooks to avoid issues with accepting invoices beyond the standard warranty period. 3.9 Content 3.10 Rates 3.9.1 Upon successful completion of the service work, send the invoice to the Service Department with the following information: a) The type of charge: Either back-charge or start up b) Job Name c) Equipment Model Number d) Unit Serial Number e) Brief Description of the charges f) SDA Number assigned if a back-charge g) Detailed service reports describing the diagnosis and the corrective action taken h) Copies of all receipts for purchased materials and services rendered. 3.9.2 For packaged water systems or accessory products sold with another item of Cleaver- Brooks, Inc. equipment (this applies especially to softeners and feed systems) state the unit number of the packaged water system as well as the parent number, which is either: a) The unit number of the equipment with which it was sold. b) The sales order number. 3.9.3 For burners supplied, please include model and serial number. 3.10.1 All Divisions of Cleaver-Brooks, Inc. will honor a representative s/distributor s invoice at a billing rate equal to 85% of their published rate. 3.10.2 Documentation of the representative service rates should be provided, as applicable, to the Warranty Manager on an annual basis by February 28th, or the previous year s rate will remain in effect. Contact the Service Department immediately if rates change midyear. Overtime spent to complete work the same day to reduce lodging costs and provide a net back-charge reduction is acceptable under the standard work authorization. Overtime generated to comply with the customer s demanded work schedule requires separate authorization and is discouraged. In general, if the customer requests work outside of normal working hours, then the customer will be required to cover the
Page 9 of 14 3.11 Documentation 3.12 Parts additional cost. A Separate P.O. should be obtained from the customer to avoid invoice disputes. 3.11.1 Complete documentation must accompany each invoice. The documentation must include the following: 3.11.1.1 Start up invoices must be accompanied by the original completed copy of the final start up report for each unit, complete, including the customer s signature. For boilers, one final start up report is required for each fuel. 3.11.1.2 Back-charge invoices must be accompanied by service report(s) describing the work done; only legible copies are acceptable. 3.11.1.3 Documentation to substantiate amount invoiced. (Ex. time reports, etc.) 3.11.1.4 The customer or user must sign all service reports. 3.11.1.5 Terms for SDA, Warranty & Back-charges 3.12.1 Do not include parts on invoices sent to Cleaver-Brooks, Inc., except in unusual cases where prior authorization was received from the Service Department as part of the SDA. Consumable parts, such as bulk refractory, gaskets, wire for electric circuits, and insulation, which can not reasonably be returned for replacement may however, be included in your back-charge invoice. 3.12.2 List the following for each consumable part used: a) The Cleaver-Brooks, Inc. part number and description. b) The quantity used. 3.12.3 The net price shall be the current net price shown in the latest published parts price reference book. (If the part number used is not listed in the parts price book, attach a copy of the Cleaver-Brooks, Inc. invoice for your purchase of the part). 3.13 Payment
Page 10 of 14 3.13.1 If the amount authorized for payment is less than the invoice amount, the authorized amount will be paid. A separate SDA must be completed for any overage and go through the standard approval process, unless previously approved by the Warranty Manager. 3.13.2 If the amount authorized for payment exceeds the invoice amount, the amount of the invoice will be paid. 3.13.3 Partial payment of invoices will only be made for amounts in excess of $10,000 and at the discretion of the appropriate Cleaver-Brooks, Inc. department. Submission of documentation of all costs will be required prior to any partial payment authorization. 3.13.4 Invoices received in accordance with this policy will be paid within sixty (60) days. 3.14 Service Department Contacts 3.14.1 Contact Lists (See Exhibit 1) 3.14.2 Contacts 3.14.2.1 Phone calls should be directed to the responsible person listed in the contact list. Telephone calls of a technical nature from representatives should be limited to the Service Manager. Representatives are discouraged from offering internal contact information to unauthorized personnel. 3.14.2.2 Written or e-mail communication should be sent to the attention of the responsible individual. Refer to the contact list (Exhibit 1) 3.14.2.3 Cleaver-Brooks, Inc. employees will make every attempt to redirect customer inquiries back to the representative assigned the territory. 3.15 Fax Numbers: Cleaver-Brooks 229-227-4413 3.16 Invoices
Page 11 of 14 All invoices should be directed to the following address: Cleaver-Brooks 221 Law Street Thomasville, GA 31792 Attn: Start-up/Back-charge Dept. 3.17 Policy and Technical Bulletins 3.17.1 Service policy changes will be issued as required. Technical bulletins should be distributed to all Representatives personnel in a timely fashion. Copies will be maintained in the REP s only section of the CB website. Bulletins should be reviewed and the understanding of the contents verified as soon as received. If you have questions on a new bulletin, contact the Service Department immediately. This service policy will be updated periodically. Request for changes and suggestions for incorporation, etc., should be directed to the Manager of Service and Warranty. 3.18 Service Department Assistance 3.18.1 Job site assistance 3.18.2 Determination of whom will visit a jobsite and when, is the responsibility of the Cleaver- Brooks, Inc. Service Manager. Consideration will be given to the particular situation, age of the equipment, original contract terms and if it will or will not be fee based. 3.19 The areas we offer service assistance include, but are not limited to: 3.19.1 Start up 3.19.2 It is the responsibility of the Representative to provide start up for all new equipment as contracted by Cleaver-Brooks, Inc. The time and funds provided are determined by standard sales policies or special provisions provided in the particular contract. The Service Departments with Cleaver-Brooks, Inc. maintain a staff to provide start up service in the event a Representative does not have adequate or trained staff for complex systems. Upon completion of a start up by Cleaver-Brooks, Inc. personnel, it will be the responsibility of the Representative to cover any future requested service work and support the customer s needs. 3.19.3 Rates Cleaver-Brooks, Inc. rate schedule See Exhibit 2
Page 12 of 14 3.19.4 General Service 3.19.4.1 Following the completion of start up, problems may be encountered with equipment. Problems may include warranty work or a system related problem. Warranty work is covered in previous sections of this manual. 3.19.4.2 When system related problems arise, Cleaver-Brooks, Inc. may provide the personnel at no charge, request a purchase order from the customer or request a purchase order from the representative and/or agree to some portion of the charges. 3.19.5 Pressure Vessel Work 3.20 Training 3.19.5.1 Certain boiler groups of Cleaver-Brooks, Inc. hold the R stamp required to make repairs to the pressure vessel. It shall be the responsibility of the appropriate Quality Manager to decide when pressure vessel repairs are to be made by Cleaver-Brooks, Inc. personnel. 3.20.1 Representative Personnel 3.20.1.2 It is the responsibility of the Representative to maintain a qualified and fully trained service organization to commission, startup, troubleshoot, and otherwise service the Cleaver-Brooks, Inc. products sold into their territory, as appropriate. Cleaver-Brooks, Inc. may determine a Representative s service staff is in need of additional training and offer them a program specific to their needs. 3.20.1.2 Cleaver-Brooks, Inc. provides, on a scheduled basis, various levels of training seminars for Representative s personnel. These seminars are structured for and offered only to Cleaver-Brooks, Inc. Representatives. Special training seminars directed to specific topics or products can be arranged for customers or representatives. Special training seminars are offered at a nominal fee. Contact the Cleaver-Brooks, Inc. Training Department or Service Department Manager for fees and scheduling. 3.20.2 Customers Personnel
Page 13 of 14 3.20.2.1 Training of customer s operating personnel has always been and will continue to be part of the Representatives normal start up requirements and responsibility. However, specifications on large projects may require classroom and/or special training. Requests of this type are fee based and would normally be provided by the representatives. Should participation by Cleaver-Brooks, Inc. be required, contact the Training Department or Service Department Manager for fees and scheduling. 3.20.3 New Products 3.20.3.1 Cleaver-Brooks, Inc. will provide start up and service training for Representative s personnel, to include a Manager, on new products on a nocharge basis; not including travel and related expenses. Upon completion of the training, it is the Representative Manager s responsibility to train others within their respective organization. If Cleaver-Brooks, Inc. is requested to provide additional training, the Representative will be responsible for incurred expenses on the first request and per diem plus expenses on each subsequent request. 3.21 Testing and Instrumentation 3.21.1 The requirement to conduct ASME efficiency testing of a boiler is dictated by the job specifications. If such testing is required it should be priced into the original sales contract. If testing is not priced in the original sales contract, a separate purchase order is required. The testing should be conducted immediately following a complete and proper start up. 3.21.2 Special Testing 3.21.2.1 This can include (but is not limited to) special combustion testing, stack emission testing, and deaerator oxygen testing. Request for testing will result in a complete contract review to determine if funds were originally provided and/or if a purchase order is required for both manpower and test equipment. 3.21.3 Delay of Testing 3.21.3.1 If delays are encountered in conducting the testing, it may be necessary to reset combustion and/or clean the boiler. This extra work will require an additional purchase order from the customer. Either Cleaver-Brooks, Inc. personnel or our representatives can accomplish actual testing or recording of data. Experience levels dictate responsibility. Upon completion of the testing, Cleaver-Brooks,
Page 14 of 14 3.22 Purchaser Obligations Inc. will provide the test calculations. If Cleaver-Brooks, Inc. conducts the testing, the calculations will be furnished on a no charge basis. If a representative performs the field test, calculations will be provided on a fee basis. Test equipment can be provided on a fee basis. Gas flow meters are not available. If pricing for testing or instrumentation rental is not included in the contract, contact the Cleaver-Brooks, Inc. Service Department. 3.22.1 The equipment shall be installed and commissioned (start-up) at the expense of the purchaser. Upon request of the purchaser and receipt of a written purchase order, Cleaver-Brooks, Inc. will furnish personnel (representatives) to advise the purchaser in the installation and operation of Cleaver-Brooks, Inc. supplied equipment. The purchaser shall furnish safe and proper working conditions and safe storage of any special tools. The purchaser shall furnish all fuel, electricity, water and other materials and supplies required to install and operate the equipment and shall furnish at no charge to Cleaver- Brooks, Inc. services of operators and other employees that may be deemed necessary to accomplish his/her work. 3.23 Cleaver-Brooks, Inc. Limitation of Liability 3.23.1 Cleaver-Brooks, Inc. personnel are not permitted, authorized, nor licensed to operate purchaser equipment. All responsibility for operation rests with the purchaser. Cleaver- Brooks, Inc., and Cleaver-Brooks, Inc. personnel will not accept liability, nor shall either be liable for any special, incidental, or consequential damages under any circumstances. Cleaver-Brooks, Inc. personnel are not authorized to accept liability for any loss, claim, expense or damage to the extent caused or arising out of the act(s) or omissions of others whether negligent or otherwise. 3.23.2 Cleaver-Brooks, Inc. or Cleaver-Brooks, Inc. personnel will not hold others harmless to the extent of loss, claim, expense, or damage not arising out of act(s), omissions, or negligence of Cleaver-Brooks, Inc. personnel. 3.23.3 Cleaver-Brooks, Inc. shall not be responsible for materials furnished by the purchaser or for act(s), or failures to act, of personnel furnished by the purchaser. Under normal circumstances, allowances for repairs or alterations to Cleaver-Brooks, Inc. supplied equipment will not be made without the consent or approval of Cleaver-Brooks, Inc. prior to the start of work.
Page 15 of 14 3.23.4 Cleaver-Brooks, Inc. personnel are neither allowed nor authorized to sign gate passes, access agreements, or any other documents that include conditions which in any way impose liabilities not consistent with the above stated limitation of liability. 3.24 Litigation 3.24.1 All legal activity pertaining to Cleaver-Brooks, Inc. products or services even if Cleaver- Brooks, Inc. is not a co-defendant in a product liability or contractual suit should be directed to Cleaver-Brooks, Inc. Corporate office. This includes copies of summons and complaints, interrogatories, depositions and any other relevant information. 3.25 Insurance Cleaver-Brooks, Inc. P. O. Box 421 Milwaukee, WI 53201 Attn: Litigation 3.25.1 Cleaver-Brooks, Inc. maintains the following insurance coverage through its insurance carriers. Representatives are not covered under this policy. Representatives must maintain comparable coverage to meet their needs. The following coverage is the minimum recommended : 4 FORMS AND EXHIBITS a. Workman s Compensation: Statutory Limits. b. General /Product Liability: General Aggregate $ 2,000,000 each occurrence Personal Injury $ 2,000,000 each occurrence Products $ 1,000,000 each occurrence c. Automobile $ 1,000,000 each occurrence 4.1 Exhibit 1 Service Personnel Contact List 4.2 Exhibit 2 Rate Schedules 4.3 Form - Materials Request Authorization - (MRA) 4.4 Form - Service Department Authorization - (SDA)
Page 16 of 14 5 DISTRIBUTION 5.1 This policy shall also be distributed to sales for distribution to the Representatives as an uncontrolled document. 5.2 This policy shall be distributed to all Cleaver-Brooks, Inc. facilities listed below, as a controlled document. 5.2.1 Stratford Manufacturing Plant 5.2.2 Thomasville Manufacturing Plant