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

Risk classification based on where risk control lies, R i sk classificati...

R i sk classification based on where risk control lies From the point of view of where risk control lies, five classifications of risk can be listed: External risks wh

Factors affecting organisational structure , Factors Affecting Organisation...

Factors Affecting Organisational Structure-process of structuring-LIBRARAY MANAGEMENT A manager has to design a structure that will best suit the specific requirements of his

Skills in literature search, Skills in Literature Search: Expertise in...

Skills in Literature Search: Expertise in literature search can be gained only by experience. Some attitudes or traits conducive to a good literature search are: imagination,

Differences between a credit card and a debit card, Question: a) List ...

Question: a) List and describe the role of the different parties involved in any e-payment system. b) Outline five factors (characteristics) that determine the acceptance

Pro-quest international powerpages, Pro-Quest International Powerpages: ...

Pro-Quest International Powerpages: Pro-Quest International Powerpages is another full-text journal database on CD-ROM, offered commercially by the publisher UMI. The UMI(form

Network configurations - cd rom network, Network Configurations   The b...

Network Configurations   The basic components of a single CD-Rom workstation are a microcomputer and a CD-ROM drive. A printer will be necessary if you want to obtain a paper c

Investment anlysis mangement, define,fuctions, principals, and introduction...

define,fuctions, principals, and introduction,how to speculation

Legal aspects of health care management, 3. "Patient self-determination and...

3. "Patient self-determination and autonomy are under the law ancillary and derivative from the well-articulated right of privacy. Under this well established right, procreative fr

Explain the steps involved in strategic planning process, QUESTION 1 (a...

QUESTION 1 (a) Explain the steps involved in Strategic Planning Process. (b) Using the different components of a mission statement, write a model mission and vision statemen

Discuss the significance of world heritage sites, QUESTION World herita...

QUESTION World heritage sites are identified as sites of outstanding global values that should be preserved for all humanity. Sites will be preserved for future generations and

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