Question regarding integrating bonuses and fees for contractors

[Peter Staiano]

Hey everyone, 

With regards to contractors specifically, when setting up work I have read and heard referenced on BP that some people will work in bonuses for work finished early and fees if work goes over schedule. I was wondering how this is incorporated in real life. Is it a percentage or a flat bonus/fee? What have you used in previous projects? Thanks for the help as always. 

Pete 

[Andy Sabisch]

We have used these bonuses / penalties on some work we contracted out.  Typically we get a price for work from the contractor and then discuss early bonus / late penalty clauses.  If we get push back, it raises a flag as tat tends to mean they are not sure of their timeline or have multiple jobs underway.  If they give you a quote for a job, we offer a 10% bonus to come in ahead of schedule and that includes us verifying the work was done as expected and any issues corrected.  On the flip side, we have a penalty for going over or having to come back to correct issues multiple times to get it inspected and passed.  Feel your contractor out to see if they are willing to go that route and if not, try to see why as that might tell you something before you get into a project.