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Choosing contractor payment terms

Choosing contractor payment terms
Choosing contractor payment terms
The paper considers how far contractual payment terms can be effective in producing project performance for a client. The mitigation of typical problems of contractor selection, motivation and risk sharing between client and contractor are examined in the context of cost plus fixed fee contracts, firm fixed price contracts, and incentive contracts.
The latter offer possible solutions to the widely acknowledged difficulties with cost plus fixed fee contracts and firm fixed price contracts. However, there are other difficulties with operating incentive contracts in practice, and these are considered in the paper.
contracts, risk allocation, incentives
0263-7863
216-221
Ward, Stephen
ac1bf683-4186-44e7-9f5e-4193ee4d03cd
Chapman, Chris
a4f4805b-b67d-4c4c-856b-78e01a2c89a0
Ward, Stephen
ac1bf683-4186-44e7-9f5e-4193ee4d03cd
Chapman, Chris
a4f4805b-b67d-4c4c-856b-78e01a2c89a0

Ward, Stephen and Chapman, Chris (1994) Choosing contractor payment terms. International Journal of Project Management, 12 (4), 216-221. (doi:10.1016/0263-7863(94)90045-0).

Record type: Article

Abstract

The paper considers how far contractual payment terms can be effective in producing project performance for a client. The mitigation of typical problems of contractor selection, motivation and risk sharing between client and contractor are examined in the context of cost plus fixed fee contracts, firm fixed price contracts, and incentive contracts.
The latter offer possible solutions to the widely acknowledged difficulties with cost plus fixed fee contracts and firm fixed price contracts. However, there are other difficulties with operating incentive contracts in practice, and these are considered in the paper.

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More information

Published date: 1994
Keywords: contracts, risk allocation, incentives

Identifiers

Local EPrints ID: 35676
URI: http://eprints.soton.ac.uk/id/eprint/35676
ISSN: 0263-7863
PURE UUID: 65dd2ccf-41dd-4822-a793-c8aacfb95724

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Date deposited: 26 Jun 2006
Last modified: 15 Mar 2024 07:53

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Contributors

Author: Stephen Ward
Author: Chris Chapman

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