Target Cost Contracts in Hong Kong white paper

Target Cost Contracts in Hong Kong white paper

The new NEC white paper covers the use of target cost contracts for building works in Hong Kong. The use of target cost contracts in Hong Kong is growing and is encouraged by the Government in Construction 2.0. The Government wishes to see target cost contracts used more widely, as they drive contractors to achieve good performance by using pain / gain mechanisms that incentivise over performance and penalise under performance.

The Government in Hong Kong is encouraging all departments to embrace target cost contracting.

This white paper will explain the benefits of target cost contracts, the various options that are available within the NEC family of contracts. It will then consider the specific considerations for building projects and how to manage those when using NEC target cost contracts.

This includes the selection of multiple subcontractors and suppliers, verification of Defined Cost and value for money in the supply chain, as well as the lack of market experience in the operation of target cost contracts. This white paper details the solutions to many of these concerns, including the need for training and upskilling that may be required to be further aligned with Construction 2.0.

The white paper will also mention jurisdictional specific issues and how NEC contracts are ideally suited to the other Construction 2.0 main initiatives, moving towards modular construction. Finally, the appendix will provide examples of building project case studies which have been delivered using target cost contracts from around the world.

Click here to view or download the white paper.

 

Recent Projects

Recent news

Assuring labour and agency costs on NEC4 Option C and E Contracts

Assuring labour and agency costs on NEC4 Option C and E Contracts

This article provides guidance on what to look for when auditing labour and agency costs on NEC4 Option C and E Contracts.

Read more
Words and phrases to avoid when talking about NEC contracts

Words and phrases to avoid when talking about NEC contracts

NEC contracts, unlike many other procurement forms, are written in clear and simple English. They also have their own terminology.

Read more
Using X24 to align accounting periods in NEC4 service contracts

Using X24 to align accounting periods in NEC4 service contracts

Option X24 allows NEC users to align NEC4 TSC, TSS, FMC and FMS contracts with the accounting periods within their financial year.

Read more
View all news