Explaining the Malus/Bonus Concept in Contract Bidding

The term "Malus/Bonus" in contract bidding refers to an incentive system used in contracts to guide the performance of the contractor. This system is often employed in industries such as construction, logistics, or in service contracts. The aim is to ensure high-quality work and adherence to deadlines.

Bonus

A bonus is an additional payment that the contractor receives if they exceed certain criteria set out in the contract. These criteria can relate to various aspects, such as completing a project before the agreed deadline, coming in under budget or achieving certain quality standards. The bonus serves as an incentive for the contractor to deliver an above-average performance.

Malus

A malus is the opposite of a bonus. It is a penalty or financial deduction that is applied if the contractor fails to meet the conditions set out in the contract. This may be the case, for example, if the work is not completed on time, the budget is exceeded or the agreed quality standards are not met. The malus is intended to motivate the contractor to comply with the contractual agreements and avoid potential negligence.

Application in tenders:

In tenders, bonus and malus regulations can already be defined in the tender documents. They serve to encourage bidders to submit realistic bids and at the same time ensure that the agreed performance standards are met. For the client, these regulations offer a certain degree of certainty that the project will be completed within the defined parameters (time, cost, quality). For the contractor, they provide an incentive to exceed expectations in order to achieve additional financial benefits.

Overall, the malus/bonus system encourages both parties to focus more strongly on the agreed objectives and can lead to more efficient and effective project management.

 

The biggest challenge in implementing the Kanban system lies in the need for precise planning and adapting the corporate culture to the principles of lean management.

malus bonus
malus bonus

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