Eugene Hutchison, SBC's TL 9000 Program Manager, released the draft language at a meeting of the QuEST Forum, the telecommunications industry trade association that is sponsoring the development of TL 9000 requirements and metrics.

After the standard contracting language is implemented in 2000, suppliers and their key subcontractors who are not certified to TL 9000 will have to meet a number of conditions.

The first condition is to provide SBC with a TL 9000 quality plan, which shall include

• a schedule for achieving TL 9000 certification
• identification of key subcontractors and their TL 9000 certification status and schedule for becoming registered, and
• designation of the supplier's quality representative and of the senior executive with quality responsibility

Second, suppliers will be required to conform to the most current version of TL 9000 available. (The QuEST Forum is already working on revising the requirements book to align with the forthcoming ISO 9001:2000 standard.)

Third, suppliers may be asked by SBC to submit TL 9000 or ISO 9001 registration and surveillance audit results, management review goals, objectives and results for the registered business entity.

Fourth, SBC may require the supplier, at its own expense, to undertake improvement initiatives "requiring the intervention of a third party consultant for the purpose of auditing, tracking and reporting performance and Product conformance with stated requirements."

According to Steve Welch, QuEST Forum Executive Board Chairman and SBC President of Corporate and Administrative Services, who also spoke at the Raleigh meeting, poor quality in telecommunications hardware alone currently costs the industry in North America up to $750 million per year. The worldwide costs of poor quality in the telecommunications industry is estimated at up to $15 billion per year. TL 9000 is designed to reduce these costs, he said.

Welch added that key subcontractors to SBC's first-tier suppliers are of critical importance, especially in the circuit switch to packet switch changeout process. "At least half of your [quality] problems are probably not in your first tier of the supply chain," he said, addressing the audience of telecommunications executives.

SBC also shared with their trade association colleagues an internal "Quality Assurance Clause Information & Guidance" document, which explains to SBC staff the purpose of including a quality clause in procurement contracts.

The document explains that TL 9000 should be required in all network contracting agreements and in IT, hardware, and Telcordia agreements. Purchasing agents may substitute ISO 9001 for suppliers who seem too small for TL 9000.

The document states that TL 9000 is designed for all telecom environments. "Specifically, it was written to cover Hardware, Software and Services purchased. It can be applied to Manufacturers, Software Developers, Distributors, and VARs. In short, a large variety of businesses that serve our needs."

"Market expectations," the document states, "drives the majority of the registration activities in the world, and is driven by customers like SBC." What this means is that "you can't compete in this market without an ISO 9000 or TL 9000 certification."

The document concludes with "clause negotiation guidance." In it SBC purchasing agents are told to anticipate the objection that putting TL 9000 in place will cost the supplier money that it will need to recoup. The document then details a number of paybacks from implementing a quality system, and finishes by saying, "In short, don't buy this one. The argument that improved quality costs more has been dead for years. If quality did not make business sense by saving money and winning buyer loyalty we would not pursue it."