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Innovative Contracting - Incentives/Liquidated Savings
Description, benefits and drawbacks of incentives; includes specifications and projects

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Incentive template

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Incentives/Liquidated Savings

Description
With incentives or liquidated savings, contractors can receive an incentive equal to the amount of Mn/DOT's contract administration fees for early completion.  Typically, there is no cap on the maximum amount of liquidated savings a contractor can receive.

Mn/DOT has recently incorporated the use of incentive/disincentives on several roadway projects to expedite construction timelines.


Benefits

  • Reduced construction time
  • Potential for lower contract administration costs

Drawbacks

  • May require additional funding
  • Contract changes can lead to disputes regarding innovative projects

 

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