Unintended Consequences of Advocating Use of Fixed-Price Contracts in Defense Acquisition Practice
Miguel, Joseph San
MetadataShow full item record
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.
Proceedings Paper (for Acquisition Research Program)
NPS Report NumberNPS-AM-11-C8P05R01-031
Showing items related by title, author, creator and subject.
Givaty, Eidit (Monterey, California. Naval Postgraduate School, 1991-06);The primary objective of this thesis was to analyze the suitability for use of the Award Fee Types of Contracts in the Israeli Ministry of Defense. The researcher used the Navy's Supervisor of Shipbuilding, Conversion ...
How does the cost performance of defense contracts vary among services and contractors? Evidence from major defense acquisition programs (MDAP) Euske, K.J.; San Miguel, Joseph; Wang, Chong (2012);This research examines how the cost performance of defense contracts varies among the Air Force, Army, Navy, and the Department of Defense (DoD) and among five major defense contractors: Boeing, Lockheed Martin, Northrop ...
Sherman, Bran; Lipscomb, Jonathan (Monterey, California: Naval Postgraduate School, 2015-06);Award fee contracts are applicable when objective criteria are neither feasible nor effective. They were heavily used to incentivize contractor performance in the procurement of major defense acquisition programs (MDAPs) ...