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NEC ECC: X22 Incentive payment

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With regards to X22 ECI - I am a bit confused between the terminology. I get there will be stage 1 and stage 2, where stage 2 has the notice to proceed and the agreement at that point of the Completion Date and the Target Price (assuming stage 2 is under option C).

The incentive payment under X22.7 states if final Project Cost is less than the Budget, the Contractor is paid the budget incentive. This I take it means that if the Target Price at stage 2 is set lower than the original Budget at stage 1 then the Contractor gets a share of the initial savings. This would encourage the lowering of the Target Price in the first instance. They would then also share any savings if the final PWDD is less than the Target.

X22.6 changes to Budget would be if there is an instruction changing the Scope - but is Budget different still from the Prices - which would be the Target if option C has been chosen?

I initially thought they share a difference between Budget and any lower Target agreed at notice to proceed stage 2, and then further saved in gain share if they come under the Target - but not sure now that is what the contract says??

Can anyone make this simpler for me please?

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