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

What are the main styles of negotiation, Question 1: What are the alter...

Question 1: What are the alternative ways in which a decision can be made that affects the parties involved? In what ways will negotiation be seen as a tactical contest?

What do you understand by the term conflict, QUESTION 1 A team is a sma...

QUESTION 1 A team is a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mu

Case studies in Public sector Management, Writing a case report analysis on...

Writing a case report analysis on public sector management

Types of sampling, TYPES OF SAMPLING: Sampling plans can be  grouped u...

TYPES OF SAMPLING: Sampling plans can be  grouped under two categories-probability  sampling and non-probability sampling. Probability sampling uses a technique by which the r

Semi-public documentation/information centres, Semi-public documentation/in...

Semi-public documentation/information centres: Established by learned or professional societies, trade associations industrial undertakings, etc., they exist primarily for ser

E-banking and e-trading, a) In order for customers to use online banking se...

a) In order for customers to use online banking services, they will require to have for example a personal computer and an Internet connection. Their personal computer becomes thei

Influence the level of market interest rate, Question 1 Suppose you are th...

Question 1 Suppose you are the CEO of MS Bank Corporation. Your bank is facing interest rate risk which has affected its operation significantly. Expalin the factors that influenc

Title approach - approach of readers for documents, Title approach: So...

Title approach: Sometimes you may go to a library to get a document whose title you know. If the books in the library are arranged by title, it will meet your requirement. But

Areas of responsibility - library management, Areas of Responsibility - lib...

Areas of Responsibility - library management: The main areas of responsibility of the maintenance section or division are: Taking responsibilities regarding a) the  method

Total quality management , T otal  Quality Management (TQM) It ...

T otal  Quality Management (TQM) It is developed by W. Edwards Demming TQM is a series of business practices designed to monitor the quality of production throughout al

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