Using Cost Plus Award Fee Contracts

Although many might argue that program management is magic or luck, and at times this might be the case, Springer instead describes program management as both an art and a science. The art of program management is addressed through the numerous qualitative aspects of dealing with people, working in teams, understanding what motivates people, and gaining an understanding of how we manage. The quantitative side is composed of a process with multiple activities with clear-cut outcomes. The integration of the multiple activities and outcomes provides a powerful framework for successfully planning a program. Program Management: A Comprehensive Overview of the Discipline, doing what no other book has done, integrates and depicts each of the many program activities, art and science, into a well-defined sequence for creating a successful program plan. Program management is not reserved for multi-million dollar programs with strategic governmental or defense implications. The process presented by the author can be applied to any project, whether it be building a garage or planting a garden. The examples presented provide a clear and concise picture of the complete set of activities, how the responsible parties interact and which outcomes are desired for each activity.

In prior work, the author found that federal contractors were paid billions of dollars in award fees regardless of acquisition outcomes. In Dec. 2007, the Office of Mgmt. and Budget (OMB) issued guidance aimed at improving the use of award fee contracts. This report: (1) identifies agencies' actions to revise or develop award fee policies and guidance to reflect OMB guidance; (2) assess the consistency of current practices with the new guidance; and (3) determine the extent agencies are collecting, analyzing, and sharing information on award fees. The author reviewed DoD, DoE, HHS, DHS and NASA -- agencies that constituted over 95% of the dollars spent on award fee contracts in FY 2008. Includes recommend. Charts and tables.

The process of estimating the cost for the development and delivery of a product, service, or solution can range from simple to highly complex based upon multiple factors including: technology maturity, urgency, geographic location, quantity, quality, availability of resources, hardware and software, systems integration and more. This book provides a comprehensive discussion of cost estimating and contract pricing with extensive use of tools, techniques, and best practices from both the public and private sectors. Key topics of discussion include: Cost estimating methods Cost accounting standards Cost analysis Profit analysis Contract pricing arrangements Price analysis Total ownership cost Earned value management systems