The project is over-
budget, but by an amount less than the ICL pool.
Cost
Direct Costs + Overhead
Poly-party Signatories Profit
Shared profit pool shared between all poly-party signatories
Slightly
Under Budget
Significantly
Over Budget
Slightly
Over Budget
On Budget
On Budget
Slightly
Under Budget
Significantly
Over Budget
Slightly
Over Budget
On Budget
Budgeted Cost
Target Value
Budgeted Cost
Target Value
Budgeted Cost
Target Value
Budgeted Cost
Target Value
Budgeted Cost
Target Value
All parties are paid their costs, but the ICL has been reduced which lowers everyone’s profits proportionally. Owner’s total cost remains unchanged.
All parties are paid in full for their audited costs, no matter the amount over-budget. However, no party receives profit.
The project is significantly over-budget, beyond the amount in the ICL.
All parties are paid their total costs and their full profit.
The project is on time
and on budget.
Poly-party signatories
receive full profit. Poly-party signatories and owner split the additional cost savings.
Final project costs amount to less than budgeted costs.
All parties are paid their total costs and their full profit.
The project is on time
and on budget.
Savings achieved through reduced project cost
Owner Cost Savings
Budgeted Cost
Target Value
Budgeted Cost
Target Value
Budgeted Cost
Target Value
Budgeted Cost
Target Value
Target Value
Incentive
Compensation Layer (ICL)
Incentive
Compensation Layer (ICL)
Incentive
Compensation Layer (ICL)
Incentive
Compensation Layer (ICL)
Incentive
Compensation Layer (ICL)
Incentive
Compensation Layer (ICL)
Incentive
Compensation Layer (ICL)
Incentive
Compensation Layer (ICL)
Incentive
Compensation Layer (ICL)
