The principles that should guide development of the Risk or Reward Regime include:
The NOPs' remuneration should be commensurate with their performance.
The Risk or Reward Regime should be based on and linked to real risks and benefits in the identified KRAs that affect the value of the project to the Owner, and the VfM outcomes set out in the Owner's VfM Statement. For example, the Owner may only require the NOPs' performance to exceed MCOS for certain KRAs.
If the Owner's VfM Statement requires exceptional performance for any KRA, each NOP should be genuinely incentivised to exceed MCOS through the Risk or Reward Regime.
The Owner should be committed to the NOPs being able to earn the full share of the available potential gainshare entitlements.