Alternative Payment Methods
During the scan tour, the Scan Team observed that the visited countries used alternative payment methods such as contractor invoicing, milestone payments, and lump-sum payments to align team goals and/or promote efficiency. A variety of methods were available for different project types and customer goals. These alternative payment methods could potentially improve cash flow on projects, minimize measurement requirements, and allocate risk. It appears that these payment techniques were developed in collaboration with industry to ensure that they did not limit competition.
The TCM's document titled "Alternative Payment and Progress Reporting Methods" documents the use of alternative payment methods in the US. It summarizes the advantages and disadvantages of alternative payment methods and the associated impacts on construction management functions.
