The commercial arrangements, documented in the ADA and the PAA and summarised in other tender documentation, include a compensation framework that encompasses the NOPs Fee and a Risk or Reward regime designed to incentivise the combined team to perform better by aligning their commercial outcomes with success for the Owner.
As the preferred design and scope of work is defined, the risk register can be refined and treated in detail to more accurately reflect the project's risk profile. Draft commercial terms and associated guidelines for reimbursable costs can be reviewed in light of this risk profile and a Risk or Reward regime and contract terms finalised and agreed in Commercial Framework workshops.
The risk profile and commercial terms are finalised as sufficient cost estimates become available and the PAA agreed and finalised. Finally, potential scope change and variation scenarios, often referred to as 'Target Adjustment Guidelines' are agreed to and these provide the future alliance Participants with guidance to resolve issues regarding the scope of work for the alliance team.