Common use of Engineering Change Orders Clause in Contracts

Engineering Change Orders. The Buyer may, upon written notice to the Company, make changes in the design, performance, specifications or other parameters of any Product manufactured by the Company under this Agreement ("Change Order"). All Change Orders are subject to cost review by the Company. The Company shall advise the Buyer of any adjustments to the price and delivery schedule resulting from all Change Orders. The minimum cost for the implementation of a Change Order shall be $500.00, provided that any Change Order which is required to be implemented within a period of less than ten (10) working days following receipt shall be subject to a minimum cost of $1,500.00. All costs incurred by the Company in reworking processes or retooling, as documented in reasonable detail, shall be fully reimbursed by the Buyer. The Company will provide, within five (5) working days from receipt of a Change Order, a written statement setting forth any cost modification, pricing impact, and Production or delivery changes, together with an explanation of the sources of the charges, as required. The Company will use its reasonable best efforts to halt Production and minimize costs incurred in the event of receipt of a Change Order. All materials, components, and work-in-process that have or will become unused or obsolete as a result of Change Orders by the Buyer shall be purchased by the Buyer, at the Company's cost plus a 30% overhead and profit adder.