GA - 7.1

Project Purpose/Justification

The Peters Company is contracting with Corwin Corporation to research and develop a new synthetic rubber product material that will represent a new platform for the production of a wide range of rubber products, with a particular emphasis on highly durable and environmentally-resistant automotive gasket material.

Peters Company has made a (non-binding) verbal commitment to enter into a five year production contract for the resulting product. The project is not expected to generate a profit and may require additional capital from Corwin in order to be successfully completed.

This project also represents a significant opportunity for Corwin Corporation to use external funding to expand our production lines and develop new profit centers.

Measurable Project Objectives and Related Success Criteria

High-Level Requirements

The Peters Company R&D Project entails the development of a new rubber product material by the Corwin Corporation that meets specification and quality requirements defined by the client. The synthetic rubber material will demonstrate less than 5% reduction in tensile strength after exposure to oil in accordance with ASTM Test Method D471-12a. The synthetic rubber material to be developed will demonstrate a tensile range up to 5,000 psi at temperatures up to 350o Fahrenheit.

High-Level Project Description and Boundaries

The project team will use an agile approach under the terms and conditions of the contract. Desktop research to identify high quality raw materials for testing will be followed by procurement of materials and prototyping of the product will begin in the Corwin laboratories. A series of 30 tests will be performed to verify adherence to the specifications. Regular review of the test results will be held with representatives of the Peters Company each month to assess progress and decide if continued R&D effort is approved or if the project contract is cancelled for convenience. Additional tests and expenses shall be considered and approved by Corwin Corporation as needed during the project reviews.

Patents and follow-on production contracts will be managed under a separate project if/when success of this project appears highly likely.

High Level Risks

Our long-term, but difficult customer could threaten the scope, costs and time to complete the project if clear rules of engagement between customer in-house rep and Corwin staff are not developed to our satisfaction.

Successful development of a new rubber material provides an opportunity to develop new in-house expertise and secure a lucrative production contract.

Initial Sponsor Guidance for Risk Tolerance

1: the tolerance is related to changes within the time constraint of 6 months

2: additional funding by Corwin as needed to achieve scope success.

3: characteristics of the rubber material may change with customer approval.

4: We must satisfy Corwin Quality Management System.

Summary Milestone Schedule

Summary Budget

Peters Company Contract

Direct labor and support: $30,000

Testing (30 tests @$2,000 ea.): $60,000

Overhead (@100%): $90,000

Materials: $30,000

G&A (10%): $21,000

Contingency (8.2%): $19,000

Total: $250,000

Corwin Senior Management team can approve up to $250,000 of additional funds (to be decided at each milestone review meeting).

Project approval requirements

The project will be approved for closure when the following have been received, certified and reviewed by Dr. Royce:

· Signed, formal acceptance of the new rubber production material by Peters Company (Delia) or contract cancelation for cause or convenience by either party.

· Receipt of payment of final invoice by Peters Company

· Final report of project financial performance certified by our accounting department

· Verification of closure of project accounts

· Update of organizational process assets and records per Corwin Company policy (Project Management Institute, Inc., 2013, p. 104).

Assigned Project Manager

The project manager will be Dan West, scientist in the R&D Division. Mr. West is authorized to direct and control all project activities and R&D resources and approve all expenditures in fulfillment of the scope as described in this charter and within the prescribed budget limits. Any change to the budget or schedule will require the approval of Dr. Royce. If resources outside the R&D division are required, Dr. Royce will coordinate. A senior project manager from R&D division, Sally South, will be informally attached to the project as a coaching resource for Dan.

Project sponsor:

Rolly Royce

Name: Dr. Rolls Royce

Title: Vice President, Engineering

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