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

Swot analysis, QUESTION 1 The Ministry of Information Technology has re...

QUESTION 1 The Ministry of Information Technology has recently launched a public debate on how to make Information Technology the Fourth Pillar of the Mauritian economy. Using

International marketing, define international marketing and furnish its fea...

define international marketing and furnish its features

Selection of sources, Selection of Sources: A good approach to literat...

Selection of Sources: A good approach to literature search is looking up a bibliography, an encyclopaedia or a review publication. This provides background information as also

Devise a strategic control plan for a business organisation, QUESTION 1 ...

QUESTION 1 Attempt a SWOT analysis for the Cyber Island Concept in your country. You will have to analyse the business environment in the first instance and propose at least thr

Evolution of catalogue , EVOLUTION OF CATALOGUE : The custodial respon...

EVOLUTION OF CATALOGUE : The custodial responsibility assumed by the libraries of the early stages obligated on them the functions of acquisition and conservation entailing al

Classifications of magazines as a medium of communication, Problem 1 Ra...

Problem 1 Radio, as a medium of communication, functions in two main ways: it serves the individuals; and it operates on behalf of the society (Leish, 2007). Using suitable exa

Measurement of sustainable growth, Question 1: Indicators to compute su...

Question 1: Indicators to compute sustainable tourism are still in their infancy although the United Nation World Tourism Organization and other organizations are making sporad

What are the basic components of inventory, Question: (a) What are the ...

Question: (a) What are the basic components of inventory? (b) Name the steps for finding the optimum inventory. (c) What are the assumptions for the Economic Order Quanti

Job description of the deputy estate manage, Question: a. Outline the ...

Question: a. Outline the needs when appointing Security and Domestic staff. b. Prepare the job description of the Deputy Estate Manage including the skills and ethics requ

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