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NEC – Target Cost Pain/Gain Mechanism Explained

The basic premise of target cost is that the client and contractor agree a ‘target cost’ for their construction project and then during construction the contractor is paid for the work undertaken on a ‘cost reimbursable’ basis. These payments are assessed by looking at the contractor’s records and accounts, generally on an ‘open book’ basis where the employer can inspect the ‘actual costs’ incurred by the contractor to complete the works.

20 minutes
1 video
1 transcript
key points
1 quiz

What you will work through

1 of 4
WatchVideoThe core idea explained, step by step.
2 of 4
ReadTranscriptThe full transcript, to go back over the detail.
3 of 4
Take inKey pointsThe key points, ready for revision.
4 of 4
Quiz1 quizPass to earn your CPD certificate.

Course Overview

The basic premise of target cost is that the client and contractor agree a ‘target cost’ for their construction project and then during construction the contractor is paid for the work undertaken on a ‘cost reimbursable’ basis. These payments are assessed by looking at the contractor’s records and accounts, generally on an ‘open book’ basis where the employer can inspect the ‘actual costs’ incurred by the contractor to complete the works.

So, where does pain and gain come in and how is it applied to such a contract?

 

What Does This Course Entail?

One Video

One Detailed Transcription

Key Points

One Quiz

 

How Long Will This Course Take?

20 minutes