Scheme of Open Book Contract

 The construction manager will disclose all of information, such as detail of price estimation
and status of contract, to concessionaire and public company.
 Checking the information by monitoring authority, accountability will be guaranteed in the
construction work.

Scheme Chart (case of PPP)

• Report if construction cost and
overheads are reasonable • Check the detail of costs
• Report the payment status to Accountability Public company concessionaire paid
each contractor of all
• Report if the contractors are process
fairly selected Reporting

Monitoring
Concessionaire
Report the followings before
authority
construction
• Contractors to be selected Approval • Check if construction cost and
• Contract price amount overheads are reasonable
• Detail of the cost etc… • Check the payment status to
CMR each contractor
• Check if the contractors are
Selecting fairly selected
through the
tender
Contractor A

Contractor B

Contractor C
Sub-

Sub-

Sub-
 Outline of the “CM AT RISK Contract”
 “CM AT RISK Contract” will provide the client with price and quality assurance.
This will be achieved by a common target price set between the client and the contractor.
 Three key elements of “CM AT RISK Contract” are:

①Open Book Provide transparency by disclosing construction cost and overheads

②Target Price (Budget) Set and disclose target price, define appropriate specification and construction methods
③Incentive／Penalty Set incentive and penalty sharing scheme between client and contractor

Exceeding the Target Price

100% charge to
Target Penalties contractor
Price Overheads
（e.g. 10%
Overheads
Contractor gains
of CC） Incentives the part of
VE/Cost Down savings
Overheads （e.g.50%）
Cost Construction
Actual
Construction
Cost Actual Cost
(CC) Construction
Cost

Base Case 1：Cost Down Case２：Cost Up

（VE Proposal） （Charge to Contractor）
Benefits of the CM AT RISK Contract
・Contract in fair price with transparency by disclosing the actual construction cost
・Client and Contractor can benefit from the shared incentives with contractor’s full effort driven
by the scheme