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

Reasons for a negotiation , Reasons for a negotiation  As we now aware ...

Reasons for a negotiation  As we now aware that negotiation is a process, we will now learn the reasons for which the negotiation plays a crucial role.   Detailed negotiatio

Enumerate the principles of organization, Question 1 Enumerate the prin...

Question 1 Enumerate the principles of organization 2 What is decision making? Explain the steps involved in decision making 3 Explain briefly the classification of ward accomm

Patent and standards and specifications, Patents  Patents are  an impo...

Patents  Patents are  an important source of information. Various primary and secondary journals publish information regarding current patents in specific subject fields. Offi

Important part of conference and event management, Question 1: What do ...

Question 1: What do you understand by the term logistics? What are the five elements of logistics and why are they crucial to conference and events management? Question 2:

Loose assemblage, Loose assemblage is assembling together of two or more of...

Loose assemblage is assembling together of two or more of: subjects (basic or compound) isolate ideas (in one and the same facet, or isolate ideas in one and the same array)

Efficient market hypothesis, QUESTION (a) (i) Discuss the empirical evi...

QUESTION (a) (i) Discuss the empirical evidence in relation to weak form market efficiency (ii) Explain fully how you would conduct a test of semi-strong form of the Efficie

Importance of media management, Question 1 Well thought sponsorship wil...

Question 1 Well thought sponsorship will be a powerful positioning device in the hands of Public Relations Practitioners. Discuss. Question 2 "It is more difficult to f

Explain the issue of performance management system, Question: (a) Expla...

Question: (a) Explain the issue of Performance Management System and its perceptions by the school organisations in Mauritius. (b) How will the Educational Administration an

Community relations in reference to public relations, Community relations i...

Community relations in reference to public relations refer to a organization, company, or other entity's relationship with their community. Community relations involve cultivati

Explain different parts and functions of a sewing machine, Question 1 Expl...

Question 1 Explain different parts and functions of a sewing machine Question 2 Explain types of pattern along with advantage of paper patterns Question 3 Explain any 1

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