- Author
- Construction Industry Institute
- Title
- Incentive Plans: Design and Application Considerations.
- Coporate
- Construction Industry Institute, Austin, TX
- Report
- Publication 5-2, November 1988, 21 p.
- Keywords
- construction
- Abstract
- Contract incentive plans are considered by many owners and contractors to be valuable mechanisms for enhancing project success. Their application is recommended by The Business Roundtable's Construction Industry Cost Effectiveness (CICE) Project and the Construction Industry Institute (CII). Nonetheless, use of incentive plans by the construction industry is mixed. Increased knowledge of successful incentive plan designs and applications could foster broader acceptance and use with substantial resulting benefits. This publication presents the results of a CII Contracts Task Force study designed to assess the incentive plan experience of CII member companies. Objectives of the study were to: (i) provide a better understanding of the values and limitations of various plans, (ii) identify a broadened array of options for specific plan designs, and (iii) offer guidelines for plan application and administration. The study focuses principally on cost reimbursable contracts because they represent the preponderance of data available. Also, reimbursable cost contracts are amenable to a broader variety of incentive plan approaches than fixed-price contracts. A small number of fixed-price contract plans were reviewed, however, and comments areincluded in the report when appropriate.