Revenue 2016: 5B on 12% EBITDA consolidated margin Sytchev is literally ignorant in this field. Solid sources below. We are heading to
minimally 5B in consolidated revenue with the doubling of the backlog presently in design mode, and an
increase in margin from 10% to minimally 12% based on the below.
Fact: "During performance of the project,
the Direct Costs and the Indirect Costs (Project Overheads) are fully reimbursable and are charged and paid on a fully open-book basis. The reimbursable status of the Direct Costs and Indirect Costs is steadfast, even if the actual Direct Costs and Indirect Costs exceed the TOC. In other words, in no event will the NOPs be responsible for payment of any actual Direct Costs and Indirect Costs without reimbursement from the owner."
Source: Joshua Strub - Margie Strub Construction Law. Toronto, Ontario.Page 2
https://margiestrub.com/wp-content/uploads/publications/2022.04.27%20-%20%20Alliance%20Contracting.pdf Fact:
Incentive-based contracts are generally set up on a cost reimbursable basis where the contractor has limited downside exposure. The contractor is paid the actual cost incurred to complete but only profit, or a proportion of profit, is put at risk. It is paid all the costs to complete, except for narrowly defined disallowed cost, and certain liabilities are curtailed or removed completely. The basic premise is that successful delivery of the project is most likely to be achieved where there is a close alignment between the commercial interests of the employer and the contractor, so that they work together for the benefit of the project, rather than against one another because they have different commercial objectives.
This can be achieved if the contract incentivises successful outcomes in return for which the contractor can improve its profit, rather than by the employer relying primarily on damages or other contractual penalties for non-performance (as is the case with a traditional or, to some extent, a target cost contract). For example, this means that the contractor should not face the risk of delay damages being imposed in the event of late completion of the works, since the imposition of time risk might drive an approach which is inconsistent with the collaborative behaviours that the remainder of the incentive contract is designed to encourage.
The incentives can be structured in a variety of ways and there is no one-size-fits-all approach. They can focus on near- and longer-term objectives, usually through a KPI process, and can also operate by reference to strategic project outcomes, such as beating the employer’s project budget and achieving commercial operation by the employer’s target date.
Source: Nicholas Downing, David Nitech , Herbert Smith Freehills, London
https://www.herbertsmithfreehills.com/our-people/d/david-nitek