760
Special Procedures: Product Development
If sales are less than predicted, the manufacturer is protected against
major losses, as he would not be required to make full payback. Such an
approach guarantees the risk costs, while not specifically guaranteeing the
market."
764.3
LIMITED PROGRAMS
764.3.1
If these kinds of programs are not feasible for the VA for the time being,
the constraints to new product development are considerable. Research
and development must occur within the scheduling as well as economic
framework of a single building project or small group of projects in the
design stage at any one time. Projects already in the construction phase
could only benefit from development of products scheduled for installation
near time of completion. On the other hand, work started during the
design phase might suffer from uncertainty of construction funding. Such
programs also imply proceeding with design, and probably construction,
without complete knowledge of the detailed characteristics of certain
subsystems and components. It is quite possible to do this, but it may
require commitment of construction funds without completely detailed
working drawings and specifications in the conventional sense.
764.3.2
The primary vehicle for defining the scope of manufacturer research and
development work, whether based on one or many building projects, is the
performance specification. To qualify as bidders, manufacturers must first
submit their proposed designs in sufficient detail to allow reasonable
judgment of their capability for satisfying the specifications. They may
then bid on the basis of their own designs and some stated volume of
work. Typically, designs of buildings in which the new products are to be
used are not yet available. In fact, after a certain point, building design
cannot proceed without knowledge of which product design is going to be
developed. Thus, if performance bidding by manufacturers is to be
utilized for a particular project, initiation must occur as early as possible to
avoid conflict with the building design and construction schedule.
764.3.3
Performance specifications are normally neither feasible nor desirable as
an integral part of a set of construction documents. This is not only
because of the time and contingency factors discussed above, but also
because such specifications are aimed primarily at manufacturers rather
than construction contractors.
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