The contractor delivers the scheme and is measured regularly throughout delivery against the outcomes set within the contract. Their profit is linked to their performance using existing contracting options. NEC contracted options incentivising performance include those for multi-party collaboration, key performance indicators, whole-life cost and strategic delivery.
Through the deployment of a reward model, the contractor is incentivised to deliver more challenging carbon and diversity targets. In meeting these targets they are rewarded, enabling the promoter can demonstrate project delivery against target outcomes.
A transformational change
For the industry to embrace outcome-based delivery, the level of reward for achieving individual outcomes must be better than traditional fee elements on current contracts. And, to avoid unexpected and perverse incentivisation of the supply chain, careful consideration should be given to how models are devised and implemented. But, done well, it would be a transformational change for the construction industry – one that delivers great benefits to society as a whole.
Want to know more about outcome-based delivery under NEC contracts? Read our white paper or contact Conor McCarthy today. Download Outcome-based delivery under NEC Engineering and construction contracts.