Incentives, Other Management

Assignment Help:

Incentives

These are rewards given when vendor/contractor exceeds your expectation. Incentives should increase contractor?s profit. Incentives can be categorised as:

  • Cost incentive: No incentive for the contractor can be structured. In a contract where design and development are included, a value engineering clause can be incorporated to motivate the contractor to submit a proposal for cost reductions. The contractor gets the opportunity to consider an extra profit for himself while quoting the price reduction.
  • Technical incentive: These are incentives for quality and performance of work. These can also be applied to contracts which include design and development in addition to construction.
  • Schedule incentive: All construction contracts incorporate a Liquidated Damages (LD) clause which refers to penalty for delay in time of completion. Sometimes a Bonus clause for early completion is incorporated. In such a case, the LD clause is called a Penalty clause.

Caution must be exercised while combining cost, technical and schedule incentives in a contract to ensure that different incentives do not counteract or conflict with each other. Also, when more than one contract is awarded, one contractor who is given an incentive for early completion may complete his work early but this will turn out to be a benefit only if you can ensure that the following interfacing contractor can commence his work consistent with the previous contractor?s work completion.


Related Discussions:- Incentives

Pamphlets - binding policy for libraries, Pamphlets-binding policy for libr...

Pamphlets-binding policy for libraries: Pamphlets are paper covered materials of  fewer than fifty pages. Most libraries collect pamphlets and if these materials are to be use

Commercial risks and political risks, Question 1 As a trader in order to b...

Question 1 As a trader in order to be competitive and successful, how can you address some risks that are peculiar to foreign trade like commercial risks and political risks?

Hani raafat risk calculator, Explain the use of Hani Raafat risk calculator...

Explain the use of Hani Raafat risk calculator as a semi quantitative tool for assessment of risk

What lessons can be drawn from global experience, Question 1: i) What...

Question 1: i) What do you understand by good governance? ii) To what extent has good governance been implemented in the Mauritian Public Sector? Question 2: CSR h

Terms related to procurement - inward goods , Inward goods  The goods a...

Inward goods  The goods are delivered at the inward goods stores of the company/plant with necessary documents like delivery challans and suppliers invoice. These documents wil

In project management there are three primary variables, QUESTION In pr...

QUESTION In project management, there are three primary variables: the amount of work to be done; the amount of time available (calendar time, not person-years); and the amount

Developing a project management culture, Developing a Project Management Cu...

Developing a Project Management Culture Moving the organisation to embrace a "project management culture" takes time and patience. The initial step an organisation can take is

Risk classification based on where risk control lies, R i sk classificati...

R i sk classification based on where risk control lies From the point of view of where risk control lies, five classifications of risk can be listed: External risks wh

Patents as a source of information, Patents as a Source of Information ...

Patents as a Source of Information Patent documents provide a unique and important source of technical information much of which may not be available anywhere else. Their

Classification and cataloguing policy, Classification and Cataloguing Polic...

Classification and Cataloguing Policy: Whatever may  be the scheme of classification or catalogue code chosen, a policy should  be formulated for their application. Some  of t

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd