Unintended Consequences of Advocating Use of Fixed-Price Contracts in Defense Acquisition Practice
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Authors
Wang, Chong
San Miguel, Joseph
Subjects
Fixed-price
MDAP
Cost Plus Contracts
Defense Procurement System
Fixed Price Contracts
MDAP
Cost Plus Contracts
Defense Procurement System
Fixed Price Contracts
Advisors
Date of Issue
2011-04-30
Date
Publisher
Monterey, California. Naval Postgraduate School
Language
Abstract
Frequent and substantial cost overruns in Major Defense Acquisition Programs (MDAP) have been criticized by the administration, lawmakers, and taxpayers. Critics often blame the dominant use of cost-plus contracts in the defense procurement system as the root cause of the inefficiency. In turn, a strong preference for fixed-price contracts as opposed to cost-plus contracts has been expressed on multiple occasions. In this research, we highlight the possible unintended consequences of advocating wider use of fixed-price contracts in Department of Defense (DoD) acquisitions. The implication of this study is that the mindset that fixed-price contracts are better than cost-plus contracts is misleading and can potentially do more harm than good in DoD major weapon system acquisition.
Type
Report
Description
Proceedings Paper (for Acquisition Research Program)
Series/Report No
Department
Organization
Identifiers
NPS Report Number
NPS-AM-11-C8P05R01-031
Sponsors
Acquisition Research Program
Funding
Format
Citation
Distribution Statement
Approved for public release; distribution is unlimited.
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.