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

Global communication in todays society, Problem 1 Using examples, expla...

Problem 1 Using examples, explain the challenges of global communication in today's society. Problem 2 Check some of the characteristics that prevent development in you

Linear programming, a company makes two types of sofas, regula and long, at...

a company makes two types of sofas, regula and long, at two locations, one in hickory and one in lenoir. the plant in hickory has a daily operating budget of

Organizational Behaviour IIBM Institute of Business Manageme, I agree with ...

I agree with post #2 in that, generous benefits and perks have a tendency to increase productivity and decrease absenteeism, not the opposite. So first you would need to look at th

denominators, who are those involve in denominators for desi

who are those involve in denominators for desire

Issues in public relation, Question In 2000, various instances were rep...

Question In 2000, various instances were reported in which Ford owners with Firestone tyres were experiencing tyre blowouts ultimately causing around 150 deaths and over 500 s

Measures to minimise book losses - stock verification, Measures to Minimise...

Measures to Minimise Book Losses: Steep rise in cost of books, ill-organised Indian book market which makes replacement of lost material difficult, dependence on foreign pu

Added entries and tracing - cataloguing work, Added Entries: As menti...

Added Entries: As mentioned earlier, Added Entries are made using the information given in the Main Entry. The number and  type of Added Entries required will vary according

What are the duties of a confidential secretary, QUESTION 1 "Values dri...

QUESTION 1 "Values drive behaviour". Discuss with reference to- (1) virtuous values and behaviour (2) how an ethical culture can be developed at the workplace? QUESTI

Organisation Behaviour, Rajender Kumar was a production worker at competent...

Rajender Kumar was a production worker at competent Motors Limited (CML) which made components and accessories for the automotive industry. He had worked at CML for almost seven ye

Understanding body language, Understanding body language  Body language...

Understanding body language  Body language implies non verbal communication that involves body movements. What we try to deliver through verbal means may not be similar to the

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