Incentives In Government Contracting

Excerpt from Effects of Incentive Contracts in Research and Development: A Preliminary Research Report In the past several years an effort has originated in the Defense Department (and followed by other government agencies) to discourage the use of cost-p1us=fixed fee (cpff) contracts and substitute contractual incentive arrangements. This effort supposedly relies upon the profit motive to reduce requirements for direct government control and to stim ulate better contractor performance and cost estimating. Incentive type contracts are not new in government contracting. Production contracts have been awarded on a fixed price basis for many years. The fixed price contract provides maximum correlation of contract profits with contract cost, and in theory might offer maximum cost incentive. How ever the use of incentive arrangements on r&d contracts is the novel feature of the dod (and nasa) programs of the past several years. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.

Traditional contracting is primarily transactional, rewarding contractors when deliveries are made or certain process milestones are met. Performance-Based Logistic (PBL) contracting seeks to base contractor incentives on ongoing performance measures to achieve reliability and cost savings. Key to the success of these arrangements are the incentives that align the interests of the customer and the vendor. This report describes the incentives used in PBL contracts, identifies best practices, and provides recommendations for effective incentives going forward. The study team interviewed PBL practitioners including defense-unique contractors, defense-commercial contractors, and experts who are knowledgeable in the government perspective in the United States and abroad. The team supplemented these interviews by analyzing a PBL dataset of U.S. Department of Defense contracts. Of the four identified categories of incentives—time-based, financial, scope, and other—interviews found that time-based incentives stood out for their reliable appeal and relative underuse in the United States.

This volume presents a nontechnical treatment of issues that arise in procurement contracting, with an emphasis on major weapons systems procurement. Employing the economic theory of agency as their analytical framework, contributors assess the incentives that arise, for both buyers and sellers, in different contractual settings. Procurement contra

Everything You Need to Know About Government Contract Types As the world's single largest buyer of goods and services, the federal government has many ways to structure its procurements. Different situations and conditions often determine the best vehicle for a particular purchase. Contracting officers must assess a wide range of factors to determine which contract type will provide the government the best value and the least risk. The Complete Guide to Government Contract Types provides a comprehensive overview of the key government contract vehicles and types: fixed-price, cost-reimbursement, incentive, and other (which includes letter, indefinite-delivery/indefinite-quantity, and time-and-material contracts). The author first explains the selection process for contract vehicles, which is the basis for selecting the appropriate contract type for the work in question. He then presents a comprehensive, in-depth analysis of each contract type, explaining how each works best to meet certain types of requirements and conditions. This is an essential resource for both contracting officers and contractors seeking to understand and work effectively within the nuances of contract selection and compliance.