What are motivational contracts?
The contract can be drawn up in different ways if both parties agree to the terms and conditions. Two of the most common types of contract are a fixed price contract in which the party buys an item for a specified price without ongoing modifications and the PLUS cost, which is often used in research and development if the actual costs cannot be detected in advance. Another group of contractual possibilities are motivational contracts that connect part of the fee or profit received by the supplier or seller, to certain items such as costs, schedule or performance. This is common for contracts involving test programs or new technologies or processes. Cost -based motivational contracts create the target price, target profit and maximum costs. The formula is Jáncluded to allocate any target costs between the buyer and the supplier. Once maximum costs are achieved, the supplier deducts all further exceeding from its profit or fee.
Incentive -based incentives can also be structured in a positive way to enter the budget. In this case, the reduction in costs is shared between the buyer and the seller. One of the disadvantages of these contracts is that they carry more administrative burden. In order to maintain integrity, detailed cost accounting and performance monitoring are required to determine accurate costs.
Other incentive contracts may be bound to planning rather than costs. The contract determines the date of completion that must be fulfilled in order to receive a full fee or profit. Positive incentives can be created in which it increases the fee for early completion. On the other hand, NTIVES, which will reduce the fee through liquidated damage, also be a negative incision if the date of the schedule is not fulfilled. This can be associated with one final date of completion or may be structured gradually with a number of milestones to ČASova axis.
If the contract has a certain performance specification, the contractor is expected to meet these at the price. In some cases, however, the buyer is interested in obtaining a product with better performance than minimal specification. In order to achieve this, insertion contracts on performance that reward the supplier financially if the product exceeds the performance specification such as speed, noise reduction, reduced weight or increased force. These contracts can provide the supplier with financial motivation to invest more capital in further research and development.
In the case of a new technology or research, it is not always possible to come in advance with the aim and maximum costs. For these situations, incentive contracts can use a consecutive goal rather than fixed costs. The estimated costs are determined at the beginning of the performance of the contract, and the agreement will set fixed costs at a particular future point, for example after the draft or after the test program is completed. Regardless ofThe nature of the work to be carried out may be designed to ensure that the buyers and the seller are reasonably protected.