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- Title
BALANCING Incentives and Risks in Performance-Based Contracts.
- Authors
Gardner, Christopher P.; Ogden, Jeffrey A.; Kahler, Harold M.; Brady, Stephan
- Abstract
Performance-Based Life Cycle Support (PBL) as a sustainment strategy for weapon systems has been mandated by the Department of Defense (DoD) and employed by acquisition and contracting professionals in both government and private industry. Despite its apparent success, DoD implementers of PBL often face an inherent conflict: the PBL goal of developing long-term partnerships that encourage investment from commercial partners is best achieved through lengthy, guaranteed contracts--but such contracts increase the DoD's risk in an environment that is intended to transfer more risk to the contractor. This exploratory research examines issues associated with the type and length of PBL contracts, addressing the question of how the DoD can balance PBL contracts mitigating operational and financial risks while simultaneously building long-term partnerships that encourage investment from commercial contractors. The results reveal five areas in which the government should focus its efforts to improve PBL implementation.
- Subjects
PERFORMANCE-based design; STRUCTURAL design; WEAPONS system design &; construction; UNITED States. Dept. of Defense; DEFENSE contracts
- Publication
Defense Acquisition Research Journal: A Publication of the Defense Acquisition University, 2015, Vol 22, Issue 4, p472
- ISSN
2156-8391
- Publication type
Article