DoD profit policy--its impact on facilities capital investment
Authors
Buck, David John
Subjects
Profit Policy
FCE
FCE
Advisors
Smith, Raymond W.
Date of Issue
1989-12
Date
Publisher
Monterey, California. Naval Postgraduate School
Language
en_US
Abstract
Since the 1970 's profit policy has been used as a
vehicle to motivate capital investment in productive
facilities and equipment. The current policy has increased
the factors available for use when determining a profit/fee
objective in order to increase this incentive. Defense
contractors and Government procurement personnel are
interviewed for their perceptions of the effectiveness of
the current policy to incentivize capital expenditures in
facilities and equipment. The results of the survey showed
that: (1) profit policy has been ineffective in
incentivizing defense contractors to invest in more
productive facilities and equipment; (2) it is not an
important factor when deciding on the contractor's capital
budget; and (3) profit policy is not being implemented as
originally intended. Recommendations include: (1)
encouraging greater use of more direct incentives for
capital investment; (2) the need for greater accountability
of Government procurement personnel on implementation of the
policy; and (3) DoD should review and restate the objectives
of the policy so the Services have a clear understanding of
what is expected and required.
Type
Thesis
Description
Series/Report No
Department
Management
Organization
Naval Postgraduate School (U.S.)
Identifiers
NPS Report Number
Sponsors
Funder
Format
106 p.
Citation
Distribution Statement
Approved for public release; distribution is unlimited.