Common use of Global Sourcing Clause in Contracts

Global Sourcing. (i) GM may periodically undertake global sourcing studies with regard to the Components at any time during the term of this Agreement. GM agrees to solicit such information from qualified suppliers only, and in the context of both substantive volume (e.g., 1 million units) and an extended time frame, in order to assure that the information received represents achievable benchmarks. GM agrees to inform DRA on a timely basis of its issuance of any such requests. (ii) If GM informs DRA prior to July 31, 2001 that the unit price of a Component is not competitive with the market-based price determined by such a global sourcing study, GM and DRA will cooperate in good faith to determine why DRA's price is not competitive . Promptly thereafter, DRA will prepare a plan including specific interim goals and target dates for reducing DRA's price to the market-based competitive price. With the assistance of GM, DRA will use its best efforts to achieve maximum productivity and cost reduction improvements, including but not limited to changing types of suppliers of materials and incurring reasonable developmental expenses and capital investments, and beginning in the Second Model Year for "Category A" Components and the Third Model Year for "Category B" Components, fifty percent (50%) of resulting cost reductions, if any, will reduce prices pursuant to paragraph 1.2(b) of this Agreement. However, prior to July 31, 2001, GM shall not purchase Components from other suppliers because of price. (iii) After July 31, 2001 the Components must be competitive in terms of price, technology and design with similar products which may be available to GM. Should GM receive a quotation which meets the criteria of (i) above, and which, in the case of quotations received from current GM suppliers, is comparable to current prices being charged GM by such suppliers, GM, to the maximum extent and detail possible without breaching any legal or contractual obligations to such third party, shall advise DRA in writing of the area(s) (i.e. price, technology and/or design) in which the other product(s) offered in such quotation are more competitive. DRA shall have sixty (60) days within which to notify GM that it shall sell the affected Component(s) at the competitive price, with substantially comparable technology and/or design as the case may be. It is agreed by the parties that the effective date(s) for such price reduction(s) and/or improvement(s) in technology and/or design shall be the date(s) at which the other supplier is able to supply the competing component(s). It is further agreed by the parties that should DRA elect to meet the competing offer, its price reduction(s) and/or improvement(s) in technology and/or design shall not be limited to only the quantities set forth in the competing offer but rather to all affected Components being supplied by DRA hereunder. (iv) Should DRA fail to notify GM within the sixty (60) day time period set forth in (iii) above, or should DRA notify GM that it will not meet the competing offer, GM may terminate its purchase(s) of the affected Component(s) hereunder and thereafter purchase the Component(s) from the other source.

Global Sourcing. (i) GM may periodically undertake global sourcing studies with regard to the Components at any time during the term of this Agreement. GM agrees to solicit such information from qualified suppliers only, and in the context of both substantive volume (e.g., 1 million units) and an extended time frame, in order to assure that the information received represents achievable benchmarks. GM agrees to inform DRA on a timely basis of its issuance of any such requests. (ii) If GM informs DRA prior to July 31, 2001 1997, that the unit price of a Component is not competitive with the market-based price determined by such a global sourcing study, GM and DRA will cooperate in good faith to determine why DRA's price is not competitive competitive. Promptly thereafter, DRA will prepare a plan including specific interim goals and target dates for reducing DRA's price to the market-based competitive price. With the assistance of GM, DRA will use its best efforts to achieve maximum productivity and cost reduction improvements, including but not limited to changing types of suppliers of materials and incurring reasonable developmental expenses and capital investments, and beginning in the Second Model Year for "Category A" Components and the Third Model Year for "Category B" ComponentsYear, fifty percent (50%) of any resulting cost reductions, if any, will reduce prices pursuant to paragraph 1.2(b) of this Agreement. However, prior to July 31, 20011997, GM shall not purchase Components from other suppliers because of price. (iii) After July 31, 2001 1997, the Components must be competitive in terms of price, technology and design with similar products which may be available to GM. Should GM receive a quotation which meets the criteria of (i) above, and which, in the case of quotations received from current GM suppliers, is comparable to current prices being charged GM by such suppliers, GM, to the maximum extent and detail possible without breaching any legal or contractual obligations to such third party, shall advise DRA in writing of the area(s) (i.e. i.e., price, technology and/or design) in which the other product(s) offered in such quotation are more competitive. DRA shall have sixty (60) days within which to notify GM that it shall sell the affected Component(sComponents(s) at the competitive price, with substantially comparable technology and/or design as the case may be. It is agreed by the parties that the effective date(s) for such price reduction(sreductions(s) and/or improvement(s) in technology and/or design shall be the date(s) at which the other supplier is able to supply the competing component(s). It is further agreed by the parties that should DRA elect to meet the competing offer, its price reduction(s) and/or improvement(s) in technology and/or design shall not be limited to only the quantities set forth in the competing offer but rather to all affected Components being supplied by DRA hereunder. (iv) Should DRA fail to notify GM within the sixty (60) day time period set forth in (iii) above, or should DRA notify GM that it will not meet the competing offer, GM may terminate its purchase(s) of the affected Component(s) hereunder and thereafter purchase the Component(s) from the other source.