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

Explain the essential training required for all your staff, Question: Y...

Question: You have been appointed as the Estate Manager of La Gaulette Integrated Resort. The project has just started and you have been appointed during the construction phas

Functional organisation - information centres, Functional Organisation: ...

Functional Organisation: The library is expected to take care of selection, acquisition and storage of documents. The documentation/information centre, in collaboration with t

Leather and cloth binding - library bindings, Full leather binding:  Full...

Full leather binding:  Full leather binding means that whole of the card board is covered by leather. Books which are very expensive and are rare may need this kind of binding.

Library networks, Library Networks   A Library network is defined by Hu...

Library Networks   A Library network is defined by Hunter and Bakewell as "A group of libraries and/or information service points, connected together for the purpose of satisfy

Describe and illustrate the term non ionizing radiation, Question 1: ...

Question 1: (a) Describe and illustrate the term ‘non ionizing radiation'. (b) In what ways will noise affect workers? (c) How will the effects of noise, as a hazard,

Types of observation, Types  of Observation: Types of observation rela...

Types  of Observation: Types of observation relate  to  the  observer-observed relationship. It has been described as "concealment and participant", "concealment and non- part

Stack -circulation area in library building, Stack -Circulation Area in lib...

Stack -Circulation Area in library building-library managenent Stacks are the storage spaces for the various types of documents kept in a library. The types of documents gener

Document selection - library management system, DOCUMENT SELECTION: Yo...

DOCUMENT SELECTION: You have seen that acquisition work includes three distinct phases of activities. Document selection is the first phase. There are two aspects in document

Process for the rooms division department, Question 1: (i) Explain why...

Question 1: (i) Explain why it is not normally advisable to use the cost plus method in the pricing of rooms for first class hotels. (ii) Mention and explain four types of

Statistical process control, Problem QC is often performed by a team of...

Problem QC is often performed by a team of professionals who use specific techniques. These techniques do vary depending on the intended measurement. Without QC techniques, a c

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