Non-recurring engineering, or NRE, is a one-time charge for design, engineering, setup, programming, testing or qualification work needed before recurring production. It should be separated from unit pricing.
How Non-Recurring Engineering (NRE) works in a sourcing process
Ask for the deliverables, assumptions, hours or milestones behind the charge. Define which work product and intellectual property the buyer receives.
Non-recurring engineering sourcing record
| Area | What to record |
|---|---|
| Decision | Ask for the deliverables, assumptions, hours or milestones behind the charge. Define which work product and intellectual property the buyer receives. |
| Evidence | Keep the statement of work, deliverables, acceptance criteria, payment schedule, ownership terms and approved changes. |
| Watch point | A one-time label does not guarantee the fee will never recur. State what future revisions, sites or products would create another charge. |
What should buyers verify about Non-Recurring Engineering (NRE)?
Keep the statement of work, deliverables, acceptance criteria, payment schedule, ownership terms and approved changes.
A one-time label does not guarantee the fee will never recur. State what future revisions, sites or products would create another charge.
