Under the Risk or Reward Regime, an amount is payable or deductible (as the case may be) depending on the Participants' collective performance.
The Risk or Reward Regime set out in Schedule 7 of the draft Project Alliance Agreement has been designed to:
∙ incentivise Participants to achieve the Project Objectives set out in the Project Owner's VFM Statement; and
∙ reward Participants for [exceptional] performance in the Project Objectives, including both price and non-price performance.
Guidance Note: This should be amended by the Project Owner if exceptional performance is not required by the Project Owner's Value for Money Statement. |
The Risk or Reward Regime comprises both the payment of reward amounts by the Project Owner to the Non-Owner Participants and the payment of liability amounts by the Non-Owner Participants to the Project Owner.
Guidance Note: Refer to the Practitioners' Guide to Alliance Contracting for further guidance and information regarding the development of the Risk or Reward Regime and the alternative structures that the Project Owner may wish to consider. |