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EC6 - Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation

Report the organization's geographic definition of local – Providers of goods and services that are based (i.e., headquarters or principal locus of operation) in the same geographic area as the reporting organization.

Report whether the organization has a policy or common practices for preferring locally based suppliers either organization-wide or for specific locations. - AEP has no formal policy to give preference to locally based suppliers. When appropriate, Procurement does work with operating company personnel to obtain competitive bids from qualified suppliers within the operating company geographic area.

If so, state the percentage of procurement budget – As reported above, AEP has no formal policy nor does it administer such a policy.

Indicate the factors that influence supplier selection (e.g. - costs, environmental and social performance) in addition to their geographic location. – The driving factor on most equipment and material purchases principally, is total cost of ownership. Factors reviewed in such circumstances include, but are not limited to: quality, warranty, safety, first cost, maintenance costs, environmental compliance, etc. The driving factor for services contracts principally, is the scope-of-work, which includes but is not limited to similar elements as above for equipment and material. Geographic location is a higher-weighted factor when determining freight charges and/or logistics.

2012