Incentives, Other Management

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.

Posted Date: 9/28/2012 2:47:43 AM | Location : United States







Related Discussions:- Incentives, Assignment Help, Ask Question on Incentives, Get Answer, Expert's Help, Incentives Discussions

Write discussion on Incentives
Your posts are moderated
Related Questions
Microform Catalogue: In microform catalogue, entries are greatly reduced and printed upon a film or fiche. The microform cannot be read by naked eyes. A suitable microform rea

Personnel: Technical processing work is, perhaps, the area in the whole library work where the highest degree of professional expertise is needed. Therefore, the technical dep

QUESTION 1 (a) Define 'A Group' and with the help of a diagram explain the different stages in 'Group Development' (b) Explain the characteristics of an 'Effective Team'

QUESTION 1 Explain Intra-individual conflict with appropriate examples. QUESTION 2 Persons seeking compliance use certain tactics designed to tip the balance in their f

Ascertaining Demand: Since demand is a basic factor in selection you have to develop a system for ascertaining the demand- Demand includes both expressed wants and unexpressed

Notation: It is well known that subjects should be arranged in a helpful filiatory sequence on the basis of a scheme of successive characteristics. Further, there is a need to

Subject Headings: The coordinator must ensure correctness and consistency  in the subject headings used. The subject headings for the  document as a whole and for Cross Refer

Question 1 Explain the opportunities and challenges in healthcare HRM Question 2 Discuss employee grievance systems in healthcare Question 3 Transactional analysis

describe the conditions for liquidation

QUESTION 1 Failed organizational change initiatives leave in their wake cynical and burned out employees making the next change objective even more difficult to accomplish. Dis