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

Exchange/interchange communication format, Exchange/Interchange Communicati...

Exchange/Interchange Communication Format Exchange formats are also known as interchange/communication formats. Exchange formats are used for exchange of records between syste

What are supply bills, Question 1 Corporate Banking represents the wide ra...

Question 1 Corporate Banking represents the wide range of banking and financial services provided to domestic and international operations of large local corporates and local oper

Liqudation, describe the conditions for liquidation

describe the conditions for liquidation

Periodical display rack-step type, Step type-Periodical Display Rack-librar...

Step type-Periodical Display Rack-library furniturein in libraray management  In this type the periodicals are displayed stepwise, each step being 5 cm deep and 15 cm high. Le

Cost leadership strategy, QUESTION 1 (a) Based on the Strategic Impleme...

QUESTION 1 (a) Based on the Strategic Implementation Framework, discuss the various factors that should be considered when implementing a strategic plan. (b) What are the ma

List the distinguishing characteristics of a project, QUESTION a) In th...

QUESTION a) In the day to day operations of the organisation daily activities are carried. Project management activities are also carried out in a planned manner. List the dist

Retirement planning case, We have completed the review of the elements in t...

We have completed the review of the elements in the retirement planning process. We will conclude Part I with a case assignment, which require students to apply what they have lear

Sample and sampling, Sample and Sampling  The  sample represents  the popu...

Sample and Sampling  The  sample represents  the population of  those critical characteristics you  plan to  study. In other words,  if the  sample  is representative of  th'e pop

Write a long note on the fork method, Question 1 What should an interviewe...

Question 1 What should an interviewee remember before being interviewed? How can a potential interviewee prepare for an interview? Question 2 Discuss the different types o

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