Management Contracts

Management Contracts
– Is an agreement where one firm provides managerial assistance, technical expertise or specialized
services to a second firm for some agreed period in return for a flat fee or a percentage of sales. (such
as hotels)
Turnkey Projects
– Is a contract under which a firm agrees to fully design, construct and equip a facility and then turn the
project over to the purchaser when it is ready for operation? (Such as the motorway)
Turnkey projects:
• Turnkey Plus projects
– May include feasibility study or management of the completed facility in the operational phase - project
operators may also be required to assist the client organization in securing sources of finance or to be
involved in equity participation in the completed facility.
• Turnkey failures
– Minimum investment required in the project by the turnkey supplies
– Commission gap due to contractor’s emphasis on hardware and equipment rather than skills transfer
– Indigenization of operation of the facility done too soon