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

Elements and principles of tqm, QUESTION 1 For the successful implement...

QUESTION 1 For the successful implementation of Total Quality Management (TQM) in any business setting, the latter must concentrate on the components, elements and principles o

Forms of centralisation - library management, Forms of Centralisation   ...

Forms of Centralisation   In centralised cataloguing we observe that there are several forms of centralisation like:  Card (or Sheaf) service  MARC (Machine-Readable C

What is the maximum usable frequency for the path, Question: (a) A HF ...

Question: (a) A HF digital radio data link operates over a distance of 1000 km. Depending on transmission frequency, reflection can occur from the F2 region of the ionospher

Describe the implementation of new technology, Question 1 Write a short no...

Question 1 Write a short note on technology strategy. Describe in brief about the innovation management Question 2 What is the significance of technology diffusion? What are

Choice of the tps by the consultant firm, Question: A textile manufactu...

Question: A textile manufacturing company would like to implement a system for managing its production. The company does not have any in-house IT staff and has outsourced the c

Engineering Risk Management, Total Marks – 40 (Note: The information for t...

Total Marks – 40 (Note: The information for this question is based on the material contained in Hopkins, Andrew (1999) Managing major hazards: the lessons of the Moura Mine Disast

Catalogue code - planning and organisation, Catalogue Code: As with cl...

Catalogue Code: As with classification schemes, there are different catalogue codes available for use in libraries. Two of them are already known to you as they are prescribed

Responsibilities of a registered safety and health officer, Every employer ...

Every employer who employs more than 100 persons in his enterprise must, under section 30 of the Occupational Safety and Health Act 2005 appoint a registered Safety and Health Offi

What are the various basic shots?, Question 1 What are the various basic s...

Question 1 What are the various basic shots? Question 2 Describe the ways in which light can be measured in detail Question 3 Write a long note on the SLR camera.

Implementation of the project and assign a time frame, Government has decid...

Government has decided to construct a tunnel via le Pouce Mountain to provide an alternative access to Port Louis for road users coming from the east. Assuming that roads on both s

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