Contract Costs Research Articles

The Risk of Job Loss, Household Formation and Housing Demand: Evidence from Differences in Severance Payments

Recent cohorts in various developed countries take a longer time to form their own household and display lower rates of home ownership than older cohorts. Previous literature has linked these developments to higher job instability, especially among youths. We exploit the large differences in firing costs across contract types in the Spanish labor market to identify the causal link between sharp changes in the risk of job loss and the timing of different forms of household formation among youths. Our identification strategy uses variation in regional incentives for firms to promote high firing cost contracts between 1997 and 2009. Using data from the 2002-2014 waves of the Spanish Survey of Household Finances, we document that an increase of 1% in the stock of workers with an open-ended contract increases the probability of forming a new household by a similar magnitude (especially through renting new accommodation). The results are consistent with the predictions of precautionary saving models, whereby individuals exposed to the risk of job loss postpone their consumption of housing services.

Ownership Networks May Facilitate Bid-Rigging

Using a dataset of public procurement auctions and registered shareholders of all bidding firms in Singapore, we study the effects of ownership networks on prices and efficiency in product markets. We document prevalent identical bidding that is positively correlated with ownership networks among bidders. Moreover, the component of identical bidding correlated with ownership network is positively associated with contract prices. Structural estimates based on a model of first-price auctions show the removal of ownership network effects can improve a contractor's cost efficiency by more than it reduces contract price, highlighting how ownership networks can hinder competition.

Analyzing Barrier Factors due to Overseas Construction Market Environment Changes: Focused on Korean Construction Companies

Recently, the global construction market environment is affected by various factors that have an impact on the overseas construction contract costs. Also, the Korean overseas construction cost has been in the decline since 2015. It was generally assumed that the decline was due to the decreased number of projects in the Middle East region, a region where major contracts are based in for Korean construction companies. However, the major cause was the incapability of Korean construction companies in coping with the changing environment of the overseas construction market which ultimately lead to their weakened competitiveness. As such, this research utilizes DEMATEL technique in order to analyze the causal relationship between the factors of the global construction market environment change, and to identify a sustainable method to acquire competitiveness for Korean construction companies. Based on the analysis results, priority factors in which Korean construction companies must consider were extracted, which were “changes in the overseas contracting method from simple contracting to finance-accompanied method” and “intensified contracting competition between companies in developed and emerging nations”.

Análise dos smart contracts à luz do princípio da função social dos contratos no direito brasileiro

Smart contracts são criados por meio de códigos computacionais para execução automática de seus termos após a implementação da condição avençada pelas partes. Apresentam-se como fruto da Revolução Tecnológica, especialmente com o advento da internet e ganham relevância no mundo negocial após o surgimento da tecnologia blockchain, a qual permite o armazenamento dos códigos em cadeia de blocos, reduzindo os custos de execução contratual. Assim, os códigos que dão origem aos contratos inteligentes serão autoexecutáveis, autoaplicáveis e obrigatórios, e nada poderá interferir na produção dos efeitos jurídicos avençados pelas partes. São inúmeros desafios jurídicos impostos à realização dos smart contracts no Brasil, principalmente, porque inexistem leis específicas para tutela desta inovação contratual. A pesquisa buscou verificar a existência de obstáculos a execução destes contratos, à luz do princípio da função social dos contratos, por tratar-se norma principiológica cuja aplicação é indispensável a garantia do equilíbrio entre as partes durante todas as fases contratuais. Constatou-se, por meio do método dedutivo e procedimento monográfico, que as próprias características dos smart contracts executados em blockhain, obstam a efetividade das garantias inerentes ao princípio da função social, ante a irreversibilidade dos efeitos jurídicos produzidos, evidenciando, pois, a relevância do tema para a ciência jurídica.

The Costs of Debt Contracts and the Repeated Use of Debt Covenants

AbstractI examine the tendency to repeatedly use the same financial covenant in debt contracts and the economic determinants of such repeated use. Using the Dealscan database, I find a tendency to repeatedly use the same financial covenant. I also find that this tendency becomes stronger when a lender has high search costs for an informative covenant or high negotiation costs. I further find that this tendency becomes weaker when a borrower has a high risk of default. My study provides evidence that the cost of writing a contract is economically meaningful and needs to be considered to avoid overstating the effect of accounting informativeness on covenant choice.

Urban public transport systems from new institutional economics perspective: a literature review

ABSTRACTThe paper provides a novel perspective for the examination of urban public transport (UPT) systems based on a literature review of new institutional economics (NIE). New institutional economics is a rapidly growing interdisciplinary economic perspective which seeks to explain the role of institutions in the performance of socio-economic systems. It encompasses various economic theories including transaction cost economics, agency theory, contract theory and property rights economics. Although NIE-based approaches have been utilised in different sectors and policy areas, management and organisation of UPT systems is a policy area where the implications of NIE-related theories have not been thoroughly explored. UPT systems are complex and involve a variety of transport actors such as transport authorities, regulators, operators and passengers. These actors interact with each other as embedded in an institutional environment which structures the rules, hence determines the incentives, roles and liabilities for the actors. However, previous studies have generally taken this institutional environment as given and have not problematised it. This paper seeks to provide a concise literature review of UPT through the perspective of NIE to delve into the institutional configuration of UPT systems so that an institutional account of UPT is given. An institutional framework is proposed to help structure the current literature on UPT. To explore the applicability of NIE in conceptualising and problematising the issues concerning the management of UPT, the paper attempts to delineate the institutional landscape of UPT. The informal and formal institutions, governance structures and contractual relationships in UPT are examined through the lens of NIE. These institutional levels constitute the building blocks for the institutional arrangement of the UPT systems, and the proposed institutional framework for the analysis of UPT systems reviews and examines each institutional level in a systematic way. The paper explores the potential added-value that NIE provides, identifies the research gaps in the literature, and finally, shows the future avenues for NIE-inspired UPT studies.

1016. Bloodstream Infection Survey in High-Risk Oncology Patients (BISHOP) With Fever and Neutropenia (FN): Predictors for Morbidity and Mortality

BackgroundBlood stream infection (BSI) during neutropenia is associated with high risk for morbidity and mortality in patients with hematologic malignancies receiving chemotherapy or undergoing hematopoietic cell transplant (HCT). We sought to identify factors associated with increased risk for critical illness (CI) morbidities within 7 days of BSI with index FN following chemotherapy.MethodsA prospective ongoing survey among 14 high-volume US cancer centers submitting clinical and microbiologic data from consecutive HM patients with blood stream infection (BSI) during first FN after cytotoxic chemotherapy or HCT. We evaluated factors influencing poor outcomes defined as critical illness (need for pressor support, mechanical ventilation, new pneumonia or new BSI) within 7 days of BSI with index FN. Concordance between antibiotic and BSI isolate was determined by investigator (AZ, AF) interpretation of susceptibility reports provided by each center compared with the initial antimicrobial regimen (IAR) used, for single organism bacteremias only.ResultsAmong 294 FN bacteremic episodes (93 HCT) were 336 bacterial pathogens (48.5% Gram-negative [GN], 46.5% Gram-positive [GP], and 6% anaerobes). Death occurred in 11/294 (4%) and 41/294 (14%) had CI by day 8. At FN presentation, mean MASCC score of those with CI vs. those without was 16.9 vs. 18.6 (P = 0.03) and there was a trend toward higher mean PITT scores for patients with CI by day 8 vs. those without (1.54 vs. 0.82 (P = 0.08)). Among GN bacteremias, 15% developed CI vs. 14.5% in nonviridans group Streptococci (VGS) GP bacteremias, and 10.9% in VGS bacteremias (NS). Among patients with single organism bacteremias (88% of all BSI), mismatch of IAR coverage with isolate susceptibilities occurred in 16.7% (38/227). Among patients whom IAR was active vs. inactive against BSI isolate, 16% vs 14.3%, respectively, developed CI (P = 0.81).ConclusionThese data indicate that the MASCC score applied to high-risk inpatients may be a predictor for CI in the first week after bacteremia FN. The PITT shows less correlation with poor outcomes. There was no association between isolate type (GN, GP, or VGS) and CI. Notably there was no association between mismatched BSI susceptibility and antimicrobial spectrum of the IAR and early CI.Disclosures A. G. Freifeld, Merck: Investigator, Research grant. A. Zimmer, Merck: Investigator, Research grant. S. Pergam, Merck: Consultant, Consulting fee. Chimerix: Consultant, Consulting fee. K. V. Rolston, Merck: Investigator, Research grant. JMI Laboratories: Investigator, Research grant. Shionogi (Japan): Investigator, Research grant. S. Shoham, Merck: Investigator and Scientific Advisor, Consulting fee and Grant recipient. Astellas: Investigator, Grant recipient. Shionogi (Japan): Investigator, Grant recipient. Gilead: Investigator, Grant recipient. Shire: Investigator, Grant recipient. T. J. Walsh, Merck: Grant Investigator, Research grant. Atellas: Consultant, Grant Investigator and Scientific Advisor, Consulting fee and Research grant. Gilead: Scientific Advisor, Consulting fee. Allergan: Grant Investigator and Scientific Advisor, Consulting fee and Research grant. Scynexis: Grant Investigator, Research grant. Amplyx: Grant Investigator, Research grant. Shionogi: Scientific Advisor, Consulting fee. J. A. Young, GSK: Investigator, The University of Minnesota is reimbursed for contract costs associated with conducting clinical trials of vaccine. I receive no personal financial benefit. Y. Zhang, Merck: Investigator, Research grant. J. Meza, Merck: Investigator, Research grant.

1585. Bloodstream Infection Survey in High-Risk Oncology Patients (BISHOP) with Fever and Neutropenia (FN): Correlation Between Initial Empiric Antibiotic Regimen Correlation and Susceptibility Patterns

BackgroundThe empiric initial antibiotic regimen (IAR) for treatment of febrile neutropenia (FN) relies on a knowledge of epidemiology and susceptibility patterns of bacterial bloodstream infections (BSI), especially in high-risk patient populations, i.e., those receiving chemotherapy for hematologic malignancies (HM) or undergoing hematopoietic stem cell transplant (HCT). As the last US national survey of BSI epidemiology in cancer patients was published in 2003, we sought to update these data focusing exclusively on high-risk patients with attention to IARs used and their concordance with susceptibilities of isolated bloodstream pathogens.MethodsA prospective ongoing survey among 14 high-volume US cancer centers submitting clinical and microbiologic data from consecutive HM patients with BSI during first FN after cytotoxic chemotherapy or HCT. Concordance between antibiotic and BSI was determined by investigator (AZ, AF) interpretation of susceptibility reports provided by each center compared with IAR used, for single organism bacteremias only.ResultsAmong 294 FN bacteremic episodes (93 HCT), there were 336 bacterial pathogens (48.5% Gram negative [GN] 46.5% Gram positive [GP] and 6% anaerobes), with 88% monomicrobial episodes. E. coli and viridans group Streptococci (VGS) were the most commonly isolated GN and GP, respectively, each accounting for nearly 25% of total organisms identified. IARs included cefepime 61%, piperacillin–tazobactam 24%, and meropenem 8%. Isolates were nonsusceptible to the IAR in 38/227 (17%) of FN episodes. Antibiotic mismatch was more likely to occur with a non-VGS GP (37%) vs. GN (13%) or VGS (2%) P < 0.001.ConclusionThis is the first US national survey of high-risk BSI in FN. Although mismatch between BSI and IAR occurs in 17% of FN bacteremia episodes, this is driven primarily by non-VGS GP isolates such as CoNS and MRSA. Currently used IARs, comprised primarily of cefepime and piperacillin–tazobactam, generally provide reliable coverage for GN isolates across the United States (87%) but careful tracking of this rate is essential to identify further erosion of coverage in the current era of antimicrobial resistance.Disclosures A. Zimmer, Merck: Investigator, Research grant. A. G. Freifeld, Merck: Investigator, Research grant. S. Pergam, Merck: Consultant, Consulting fee; Chimerix: Consultant, Consulting fee. K. V. Rolston, Merck: Investigator, Research grant; JMI Laboratories: Investigator, Research grant; Shionogi (Japan): Investigator, Research grant. S. Shoham, Merck: Investigator and Scientific Advisor, Consulting fee and Grant recipient; Astellas: Investigator, Grant recipient; Shionogi (Japan): Investigator, Grant recipient; Gilead: Investigator, Grant recipient; Shire: Investigator, Grant recipient. T. J. Walsh, Merck: Grant Investigator, Research grant; Atellas: Consultant, Grant Investigator and Scientific Advisor, Consulting fee and Research grant; Gilead: Scientific Advisor, Consulting fee; Allergan: Grant Investigator and Scientific Advisor, Consulting fee and Research grant; Scynexis: Grant Investigator, Research grant; Amplyx: Grant Investigator, Research grant; Shionogi: Scientific Advisor, Consulting fee. J. A. Young, GSK: Investigator, The University of Minnesota is reimbursed for contract costs associated with conducting clinical trials of vaccine. I receive no personal financial benefit.. J. Meza, Merck: Investigator, Research grant. Y. Zhang, Merck: Investigator, Research grant.

Political donations and the allocation of public procurement contracts

We study whether and when firms’ donations to political parties induce favouritism in public procurement allocations. Our analysis builds on a unique, comprehensive dataset covering all public procurement contracts and all corporate donations to major political parties in the Czech Republic over the period from 2007 to 2014, and exploits changes in political control over regional governments within this period for identification purposes. We find that firms donating 10% more to a political party gaining (losing) power witness an increase (decrease) in the value of their public procurement contracts by 0.5–0.6%. Importantly, and in line with theoretical expectations, these effects only arise for contracts allocated under less restrictive procurement allocation processes. Assessing the underlying mechanisms, we show that donating firms receive more small contracts allocated under less regulated procurement procedures, face less competition in more regulated and open procurement procedures, and tend to win with bids further above the estimated cost of the procurement contract.

The value of buyback contract under price competition

We investigate the value of buyback contract by analysing a supply chain with one manufacturer and two competing retailers. Three scenarios, depending on whether buyback contracts are offered to neither, one, or both of the retailers, are considered. We first study the case when the manufacturer can only determine his buyback price. We show how the demand uncertainty, the competition level and the handling cost of buyback contract influence the profits of the manufacturer, the two retailers and the whole supply chain. Interestingly, contrary to the conventional wisdom that the buyback contract may intensify competition between the retailers, we show that offering the buyback contract to two competing retailers can benefit every channel member even if the competition level is high. Next, we study the return contract, a special type of buyback contract, and show the effect of competition level and industry outlook on supply chain parties' choices on return contract. We extend Padmanabhan and Png [1997. “Manufacturer's Returns Policies And Retail Competition.” Marketing Science 16 (1): 81–94] to the case with an asymmetric contract structure, i.e. one return contract and one whole-sale contract. We show that an asymmetric contract structure may better off both the retailers and the whole supply chain.

Analisis Pengakuan Pendapatan dan Beban Kontrak Konstruksi Pada PT. Wahana Tata Riau

Dalam Standar Akuntansi Keuangan mengungkapkan bahwa pendapatan dapat diartikan sebagai arus kas masuk bruto dari manfaat ekonomis yang timbul dari aktivitas normal perusahaan selama satu periode akuntansi, bila arus masuk itu mengakibatkan kenaikan ekuitas yang tidak berasal dari kontribusi penanaman modal. Sedangkan beban dapat diartikan sebagai pengorbanan ekonomis untuk menghasilkan sesuatu dalam kegiatan perekonomian. PT. Wahana Tata Riau mengelompokkan beban dalam dua klasifikasi beban yakni beban proyek dan beban usaha. Biaya proyek adalah kelompok biaya yang berhubungan langsung dengan proyek. Disini terjadi kesalahan dalam pembebanan atau pencatatan biaya-biaya yang timbul dari pekerjaan proyek seperti biaya bahan baku, upah tenaga kerja dan overhead. Perusahaan mencatat pengeluaran bahan baku dengan mendebet biaya kontrak dan mengkreditkan bahan baku, sedangkan untuk upah tenaga kerja, perusahaan mendebet biaya kontrak dan mengkreditkan upah tenaga kerja demikian juga dengan biaya overhead.

Valuation of Production Sharing Contract Cost Recovery Vs Gross Split in Earth Oil and Gas Cooperation Contracts in Indonesia and The Aspect of Public Service

Indonesia became an oil importer for the first time in 2003 and will face an excess demand for natural gas compared to supply in 2019. The reason for the decline in oil and gas supply is a lack of exploration. The implementation of oil and natural gas (oil and gas) business in Indonesia is carried out starting through a cooperation contract between the Government through SKK Migas and the contractor’s cooperation contract (KKKS) under Law Number 22 Year 2001 concerning Oil and Natural Gas. The government’s decision to change the Production Sharing Contract (PSC) Cost Recovery into PSC Gross Split in the oil and gas cooperation contract scheme to increase the efficiency and effectiveness of production split between the contractor and the government carried out by SKK Migas as stated in the Regulation of the Minister of Energy and Mineral Resources (ESDM) No. 8/2017 amended by ESDM Minister Regulation No. 52/2018 concerning PSC Gross Split has received a lot of criticism from experts and contractors, even large foreign investors still refrain from wanting to sign the new PSC Gross Split. The aim of the research is to evaluate how the implementation of PSC Cost Recovery is compared with the implementation of PSC Gross Split in the oil and gas cooperation contract in Indonesia, and how the aspects of public services are. The research method used in this research is descriptive method with the application of comparative analysis. While the research approach used is a qualitative approach. Data collection method uses interview, observation and documentation methods. The author concludes, that the government’s decision to use PSC Gross Split is considered more profitable for the government than PSC Cost Recovery in the PSC scheme. It is recommended that the government make a major breakthrough as a major step to promote investment through improving the process of bureaucratic improvement, improving regulation, transparency and eliminating uncertainties in implementing PSC Gross Split, as well as providing various fiscal and non-fiscal incentives, improving public services that are disrupted by lack of transparency from the government, in this case SKK Migas concerning PSC Gross Split, which is caused by uncertainties in the 10 split variables as stipulated in ESDM Minister Regulation No. 08/2017.

Metabolic cost underlies task-dependent variations in motor unit recruitment.

Mammalian skeletal muscles are comprised of many motor units, each containing a group of muscle fibres that have common contractile properties: these can be broadly categorized as slow and fast twitch muscle fibres. Motor units are typically recruited in an orderly fashion following the 'size principle', in which slower motor units would be recruited for low intensity contraction; a metabolically cheap and fatigue-resistant strategy. However, this recruitment strategy poses a mechanical paradox for fast, low intensity contractions, in which the recruitment of slower fibres, as predicted by the size principle, would be metabolically more costly than the recruitment of faster fibres that are more efficient at higher contraction speeds. Hence, it would be mechanically and metabolically more effective for recruitment strategies to vary in response to contraction speed so that the intrinsic efficiencies and contraction speeds of the recruited muscle fibres are matched to the mechanical demands of the task. In this study, we evaluated the effectiveness of a novel, mixed cost function within a musculoskeletal simulation, which includes the metabolic cost of contraction, to predict the recruitment of different muscle fibre types across a range of loads and speeds. Our results show that a metabolically informed cost function predicts favoured recruitment of slower muscle fibres for slower and isometric tasks versus recruitment that favours faster muscles fibres for higher velocity contractions. This cost function predicts a change in recruitment patterns consistent with experimental observations, and also predicts a less expensive metabolic cost for these muscle contractions regardless of speed of the movement. Hence, our findings support the premise that varying motor recruitment strategies to match the mechanical demands of a movement task results in a mechanically and metabolically sensible way to deploy the different types of motor unit.

The relationship between organizational forms and the comprehensive effectiveness for public transport services in China?

This paper presents a discussion on the effects of organizational forms (including ownership structure and contractual practices) on the comprehensive effectiveness of public transport services in China. Using 26 different Chinese public transport operators in 13 cities across China for the period 2008–2014 as research objects, we integrate public transport industry regulations, and transport operation and passenger requirements to construct an evaluation indicator system based on satisfaction and efficiency. We evaluate comprehensive effectiveness based on a combined evaluation method (CEM) consisting of information entropy theory and data envelopment analysis (DEA), and then take into consideration the truncated regression model to assess the effects between them. Conclusions drawn from the study are summarized as follows: ① The effects of organizational forms on the comprehensive effectiveness of public transport services are confirmed. ② Public transport services franchised to public ownership offer higher comprehensive effectiveness than those franchised to private ownership and mixed ownership. ③ Public transport services regulated by gross cost contracts incite more comprehensive effectiveness than those regulated by net cost contracts and management contracts.

Remarkablemuscles, remarkable locomotion in desert-dwelling wildebeest.

Large mammals that live in arid and/or desert environments can cope with seasonal and local variations in rainfall, food and climate1 by moving long distances, often without reliable water or food en route. The capacity of an animal for this long-distance travel is substantially dependent on the rate of energy utilization and thus heat production during locomotion-the cost of transport2-4. The terrestrial cost of transport is much higher than for flying (7.5 times) and swimming (20 times)4. Terrestrial migrants are usually large1-3 with anatomical specializations for economical locomotion5-9, because the cost of transport reduces with increasing size and limb length5-7. Here we used GPS-tracking collars10 with movement and environmental sensors to show that blue wildebeest (Connochaetes taurinus, 220kg) that live in a hot arid environment in Northern Botswana walked up to 80km over five days without drinking. They predominantly travelled during the day and locomotion appeared to be unaffected by temperature and humidity, although some behavioural thermoregulation was apparent. We measured power and efficiency of work production (mechanical work and heat production) during cyclic contractions of intact muscle biopsies from the forelimb flexor carpi ulnaris of wildebeest and domestic cows (Bos taurus, 760kg), a comparable but relativelysedentary ruminant. The energetic costs of isometric contraction (activation and force generation) in wildebeest and cows were similar to published values for smaller mammals. Wildebeest muscle was substantially more efficient (62.6%) than the same muscle from much larger cows (41.8%) and comparable measurements that were obtained from smaller mammals (mouse (34%)11 and rabbit (27%)). We used thedirect energetic measurements on intact muscle fibres to model the contribution of high working efficiency of wildebeest muscle to minimizing thermoregulatory challenges during their long migrations under hot arid conditions.

Intertemporal incentives under loss aversion

This paper studies the intertemporal allocation of incentives in a repeated moral hazard model where the loss averse agent experiences today utility from changes in their expectations about present and future wages and effort. In contrast to the standard prediction, under mild restrictions over the utility function, uncertainty is fully deferred into future payments allowing the principal to pay fixed wages. Although the intertemporal allocation of incentives is nonstandard, the optimal contract is well behaved as essential features of the contract with classical preferences—no rents to the agent, conditions to achieve first-best cost and non-optimality of ex-post random contracts—still hold.

Bundling Bridge and Other Highway Projects: Patterns and Policies

The concept of project bundling—combining multiple projects into a single contract—continues to gain momentum. Unanswered questions from past studies include how to quantify project bundling benefits. This paper addresses the issue using a data-driven approach that involves initial comparisons of the unit average project costs of single and bundled projects, preliminary investigations of the potential influential variables of project cost, the development of project cost statistical models, and an analysis of past and possible future bundling strategies. The study found that the primary drivers of project cost include the project size (economies of scale), bundling strategy (economies of bundling), and bidding market conditions (economies of competition). It is also shown that the similarity between different project types in terms of their constituent pay items is an influential factor on project cost. The study confirmed that larger contracts yield economies of scale but may also lead to less competition (discouraging all but the largest firms from bidding). This finding suggests the existence of a contract-size threshold beyond which the unit project cost increases with increasing project cost. By analyzing past bundling strategies, the study identified the most frequent combinations of work categories in the past bundled contracts. The study also carried out scenario analyses using hypothetical bundling strategies applied to actual past projects and determined that bundling projects using a carefully designed strategy can yield significantly reduced overall contract costs.

Cohesion between Cost, Time and Quality Performance of Civil Engineering Project: Evidence from Contractor Prequalification Criteria

&lt;p&gt;&lt;em&gt;Setting cost, time and quality targets for civil engineering project is motivated by the need to have an instrument that would dictate and control activities of the contractor towards delivery of product that meets client’s expectations. This study, which examines the relationship between cost, time and quality performance of civil engineering project, is premised on the importance of showing whether cost, time and quality performance of civil engineering project demonstrates different correlation patterns on one part or exhibit different significance relative to contractor prequalification criteria on the other part. It uses questionnaire to obtain the needed data and analysis achieved through spearman’s rank correlation and regression methods. It establishes the nature of the cohesion between these three parameters. Consequently, both strong and weak positive relationship exists between contractor prequalification criteria and cost, time and quality performance of civil engineering project at p?1%. In spite of this, interconnectivity between these three variables is demonstrated by contractor prequalification criteria. Cohesion also exists between cost, time and quality performance of civil engineering project at p?5%. Therefore, criteria for contractor prequalification firmly bind cost, time and quality performance of civil engineering project. Also, the firmness of cost time and quality performance of civil engineering project depends of contractor prequalification criteria. Hence, client and representatives should take the cohesiveness of cost, time and quality performance into consideration when determining the choice of contractor prequalification criteria for civil engineering project.&lt;/em&gt;&lt;em&gt;&lt;/em&gt;&lt;/p&gt;

Study on Added-Value Sharing Ratio of Large EPC Hydropower Project Based on Target Cost Contract: A Perspective from China

Engineering, procurement, and construction (EPC) has been applied in China’s hydropower projects for its value-added advantages compared with traditional project delivery systems in theory. However, the actual performance of large EPC hydropower projects has been challenged by the complexity of the stakeholders’ interest demands and conflicts. The increasing use of target cost contracts (TCC) in the construction industry has provided a pain/gain share mechanism for the owners to incentivize contractors to complete projects within cost budgets. The added-value sharing ratio is the core element of TCC, and it predetermines how much proportion of savings the contractor can get paid if the actual cost is below the target cost, and how much proportion of overspend the contractor has to pay if the actual cost is higher than the target cost. In this paper, we consider the added-value sharing ratio under the framework of TCC based on the principal-agent theory, and look at how the added-value sharing ratio is influenced by various factors and how it affects the owner and the contractor in large EPC hydropower projects. Determination of the added-value sharing ratio in both discrete and continuous conditions are discussed, respectively. It is found that the added-value sharing ratio is relatively explicit in the discrete case, while the optimal added-value sharing model in the continuous case is more complex, which can be used to analyze the relationship between the added-value sharing ratio and the key influencing factors. Our research conclusions can provide both theoretical guidance and practical suggestions to contract design in the implementation of EPC hydropower projects, to some extent.

PRAKTIK CREATIVE ACCOUNTING PADA KOPERASI DI JAWA TIMUR

The cooperation is characterized that its member includes the owners as well as the users of a cooperation. The cooperation financial reporrs have to be reported as a tool of accountability of the officers to the cooperation members in the annual meeting. The most essential information required in the annual meeting is the cooperation’s profits that in Indonesia is called as Sisa Hasil Usaha (SHU). In this study, a creative accountancy practice is applied as activities that is done by a business unit to report the desired surplus by implementing accountancy techniques and policies in regard with particular condition. By using descriptive statistic analysis, a cooperation with the scale area of East Java Province during the period of 2012 to 2014 has implemented a creative accountancy practice to increase or decrease profit. The cooperation officers or managers increase its SHU when its factual profit is lower; but they decrease its SHU when its factual profit is higher. The purpose of this practice is to reduce the fluctuation of SHU so that the cooperation looks stable and has no high risk for businesses. The results of this study is relevant with Scoot (2011) arguing for the opportunistic practice of cooperation managers or officers to maximize compensation contracts, debt contract, and political costs