We are using an Option C Target Cost contract with a penalty / incentive regime associated with the Contractor achieving / not achieving certain standards. Exceeding the standard results in a monthly bonus payment (incentive) whereas falling below the standard results in a monthly penalty payment. Am I right in saying that this does not affect the Defined Cost and hence PWDD as it comes under the second and third bullets of the 'amount due' under 50.2? i.e. Payments can be made / deductions made to the Contractor that don't affect the Contractor's share.
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