Award fees and their relationship to contract success
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Author
Sherman, Bran
Lipscomb, Jonathan
Date
2015-06Advisor
Rendon, Rene G.
Landale, Karen
Second Reader
Jones, Raymond
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Show full item recordAbstract
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) until 2005, when the Government Accountability Office (GAO) released Report 06-66. The report caused the Department of Defense to shy away from using award fee contracts, resulting in a usage decrease by 46% in 2007 and 85% in 2008. The purpose of this research is to determine whether a relationship exists between award fee contracts and contract success as measured by earned value management (EVM) or contractor performance ratings. Data was collected from a sample of contracts from a major Navy command. Six contract observations were identified as successful contracts, with one contract being labeled a failure. Further analysis showed a positive correlation between award fee decisions and contractor performance ratings on the successful contracts. Although the findings are encouraging, they were not statistically significant due to the small sample size.
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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.Collections
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