Decommissioning Contracts: Getting more for less - the role of incentives-based contracts

Hamish Lal

February 2008

A paper presented to the Tyndall Centre for Nuclear esearch, University of Central Lancashire on 9th October 2007

Hamish Lal looks at the requirements of theNuclear Decommissioning Authority, in particular its use of'incentives'. He examines the various methods that contractingparties can use, in particular the role and use of the New Engineering ContractVersion 3 and the Institution of Chemical Engineers Burgundy Book. Hefocuses on complex contractual provisions including the use of Key PerformanceIndicators, bonuses for early completion, liquidated damages and target cost contracting.

Introduction - The NuclearDecommissioning Authority targets - Incentives in the Maintenance andOperation contracts - Contractors and incentives - Definition of target costcontracts - Key commercial decisions - Amending target cost - Cost of reworkand defects correction - Payment streams - Additional contractor incentive -Off-the-shelf incentives in NEC3?Assessment of KPIs - Conclusion.

The author: Dr Hamish Lal is apartner in Dundas & Wilson LLP.

13 pages.

PDF file size: 114k