JCT Target Cost Contracts

The JCT Target Cost Contract is designed for construction projects where the Employer wishes to incentivise the Contractor, and which is achieved through the setting of a Target Cost and the provision of sharing arrangements (a pain and gain mechanism) in relation to actual allowable costs incurred. Under the Target Cost Contract, the contractor carries out both the design and the construction work. Design and build projects can vary in scale, but the Target Cost Contract is generally suitable where detailed provisions are needed.