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For general US construction, there are single-source cost-plus service contracts. Which incentivizes construction to do only the necessary and charge the max po
by avelis 4y ago
For general US construction, there are single-source cost-plus service contracts. Which incentivizes construction to do only the necessary and charge the max possible for it.
In contrast, a concrete milestone service contract with re-bid sections of the contract that miss their milestones can create a competitive construction landscape.
Things I am omitting. Red tape slowing down construction.
Changing the incentive structure can probably help boost efficiency on the provider side.
- LatteLazy 4y agoI thought Cost Plus incentivise people to do unnecessary work? Since getting x% of "plus" on top of a huge messily, error filled contract is more than a lean efficient one?
- avelis 4y agoI think contract organization aside. If the government says it's a requirement the vendor will charge the max it can and accomplish it no matter what. So, in practice vendors have accountants on staff that will work a contract in such a way that logistically allows the vendor to charge the most it can for the contract.