Opinion ID: 222928
Heading Depth: 2
Heading Rank: 2

Heading: Condensed Project Plan and Budget

Text: On May 8, 2002, Nidek’s president, Anand Chitlangia, sent a letter to Nihon Rufuto’s president, Tadao Ichida, containing a “condensed project plan and budget” prepared by Nidek for the “OEM Concentrator” project, i.e., the Unity Project. Chitlangia’s letter stated, “Although, as a result of our meeting, we have 1 The parties later agreed on an oxygen concentration of ninety percent, plus or minus three percent. 3 [a] basic understanding of your requirements, we are sure that as we progress towards this project, we will have some questions, which may change the scope of our proposal.” Nidek’s Chitlangia expressed “hope that these questions will be resolved in the next few meetings.” Nidek’s Chitlangia’s letter explained that “[i]n the meantime, [Nidek] ha[d] made certain assumptions” in developing its project plan. Nidek’s project plan divided the Unity Project into phases with Nidek coordinating “the engineering and design effort” with support from Nihon Rufuto’s business and technical staff. Chitlangia’s letter outlined ten “broad categories” of items left open for either future agreement between the parties or for future contracting with third party consultants, including an industrial design firm, a sound control consultant, electronic design consultant and a tooling supplier: 1. Specific agreement with Nihon Rufuto for product specifications and project goals. 2. Preparation of quality measures for product and agreement with Nihon Rufuto. 3. Contracting with an industrial design firm for the purpose of preparing [sic] that meets the project goals. This will include ergonomic, appearance and packing requirement and other elements associated with the product and support as required for preparing test models & prototypes. 4. Contracting the services of a sound Control consultant at the early stages of the product design. 5. Contracting with an electronic design consultant for the purpose of verifying electronic functions and preparation 4 of a printed circuit board that would consolidate all electronic functions including the Oxygen Monitoring System & system alarms. 6. Contracting with a tooling supplier for the preparation of necessary tooling. 7. Preparation of manufacturing processes and procedures in agreement with Nihon Rufuto. 8. Preparation of quality procedures and documents with agreement with Nihon Rufuto. 9. Preparation of suitable manufacturing & assembly area. 10. Support to Nihon Rufuto engineers for the purpose of securing regulatory approvals. Although Chitlangia’s letter states that the project is divided into five phases, the attached budget listed only four phases, as follows: PHASE I COMPONENT REVIEW & SELECTION COST: $22,500 PLUS EXPENSES PHASE II INDUSTRIAL DESIGN COST: $43,500 PLUS EXPENSES PHASE III TOOLING DESIGN COST: $31,000 PLUS EXPENSES PHASE IV PRE-PRODUCTION PILOT COST: $16,000 PLUS EXPENSES EXPENSES: ALL OUT OF POCKET EXPENSES RELATED TO THIS PROJECT INCLUDING TRAVEL EXPENSES, COST OF 10 ALPHA PROTOTYPES, INDUSTRIAL DESIGN CHARGES, FEES FOR NOISE & ELECTRONIC DESIGN CONSULTANT, TOOLING COST AND COST OF 100 PROTOTYPES. WE ESTIMATE THE TOTAL OF ALL EXPENSES TO BE $220,000 THIS CAN BE REDUCED IF NIHON RUFUTO CO., LTD., WILL REQUIRE ONLY FEW PRE-PRODUCTION UNITS INSTEAD OF 5 ESTIMATED 100 UNITS. The sums in the four phases total $113,000, but Nidek also would be reimbursed for out of pocket expenses, including any sums paid to the numerous consultants. Both Chitlangia and Ichida signed the May 8, 2002 letter.