Price Performance: Cost KRAs

The Risk or Reward Amount which is payable by or to the NOPs is established as a share of the savings (or underrun) on actual outturn costs for the project against the TOC, or a share of the additional costs (or overrun). Typically, this share is 50:50 but considerable refinements can apply (as noted in Appendix D).

NOPs are not sharing in 'profits' or 'losses' of the project; instead, they are sharing in the outcomes of the project. From a cost perspective, a positive outcome will be achieved where there is a saving against the TOC, but it should be recognised that such savings do not represent a collective profit for the Participants.