The most exciting breakout project deal of the year 2018 has been the agreement to resume the search of the missing Malaysian MH370 plane by Ocean Infinity, a private American Tech company. This deal will catch the attention of any project manager looking for efficient ways of controlling cost and execution rate on a project.
Here are the key facts of the Maylasia MH370-Ocean Infinity Aircraft debris Recovery Project:
Ocean Infinity, which deploys Autonomous Underwater Vehicles (AUVs)- a kind of new technology in seabed exploration, will get paid in this arrangement on a sliding scale:
$20 Million = If the debris field, cockpit voice recorder or flight recorder are found within the first 5,000 sq km searched.
$70 Million = If the listed items are found outside the initial 25,000 sq km area searched.
IN WHICH SETTINGS CAN YOU USE A PERFORMANCE CONTRACT?
Malaysia’s deal with Ocean Infinity agreement is a textbook example of a performance contract; which emphasizes payment per phase/results. The cost control strategy of the performance contract will come in handy for you if you are a project owner or project manager planning, designing or managing a project with the following kinds of features:
- A Venture project: In an untested market especially with a new application/technology where results have not been proven. The MalaysiaMH370-Ocean Infinity debris search project is a good example. This is the first time Autonomous Underwater Vehicle (AUV) technology to be deployed by Ocean Infinity will be so used.
- Critical public infrastructure/utility: Where it is important to have good ROI- Return and Value for money. Public Private Partnerships can really benefit from this because of the strong need for future performance, ensuring quality and a strong maintenance regime especially in economies like Nigeria where serious issues like mismanagement are a challenge.
- High Risk Environment: A performance contract can be used to drive a project towards a higher achievement rate; especially in an environment or terrain with economic and natural hazards where it will be unsafe to tie down resources to unpredictable output. One can also get better value for money by paying per project phase as visible results roll in. This works well especially if you are operating a lean purse. Technology development, product trials, market penetration projects across various sectors are very qualified for this.
Developing Your Project Plan/ Portfolio, use our P.A.S.S Boost services at PasSolutions to get the design/ arrangement perfect for your projects. Contact: email@example.com / firstname.lastname@example.org