A statistical analysis of deviations from target cost in NAVAIRSYSCOMHQ fixed-price incentive contracts during the 1949-1965 time frame

Abstract

This paper statistically analyses 15 years of NAVAIRSYSCOMHQ fixed-price incentive contract experience in the aircraft and missile procurement field. The relation of basic contract parameters to contract outcome is explored through regression and analysis of variance techniques. The inferences arising from this statistical analysis are combined with other information to draw conclusions regarding incentive contracting. The most important of these is that there is no evidence that the negotiated sharing ratio has any influence on the contractor during the performance of the contract.