Capital investment motivational techniques used by prime contractors to subcontractors.

Abstract

The current Acquisition Improvement Program (AIP) has focused a great deal of attention on many of the perceived management problems in the federal acquisition process. Included among these are the motivation of contractors to make productivity enhancing capital investments. Although this problem has been addressed previously by profit policy, the effect has been minimal. Most efforts have been directed at the prime contractor level with little effect to date. This research examines the complex array of factors which result in productivity enhancing capital investment and raises the question of what has been accomplished at the subcontractor level. The research, through the use of a subcontractor survey, determined that little if any effort was expended at the prime contractor level to motivate subcontractors to invest in productivity enhancing capital equipment. Until recently, subcontractors have been excluded from DOD efforts to incentivize capital investment.