Foreign Military Sales: improving contract closeout procedures using process innovation
Nissen, Mark E.
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In 1968, the Foreign Military Sales Act was written with a primary objective of facilitating the common defense by entering into international arrangements with friendly nations. Shrinking defense budgets have shaped an industrial base that is dependent on foreign markets in order to survive. Both the Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS) provide detailed guidance for negotiating contracts with foreign countries and stipulate that U.S. laws apply regardless of foreign policy. The FAR also provides the procedural requirements for the contract closeout process. Often the process is not completed in a timely or proper manner, resulting in noncompliance with contract closeout time frames, increased backlog, dissatisfied customers and significant monetary ramifications. The primary purpose of this thesis is to review the management of the contract closeout process and analyze it using process innovation tools. The FAR lists 15 specific Administrative Contracting Officer contract closeout steps that must be completed once a contract is deemed physically complete. Those steps are depicted using KOPeR methodology to identify process pathologies and shortcomings. Further, it develops two redesign alternatives that offer good potential to further streamline the process.
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