DEFENSE CONTRACTS: AN ANALYSIS OF ADAPTIVE RESPONSE

Abstract

A study is presented of the methods by which the Air Force and other government departments can keep development contract costs within reasonable bounds. The role of task uncertainty in the problem of contract cost control is emphasized, and it is argued that in many situations the adaptive responses of the firm can vitiate the effects of contractual arrangements aimed at reducing costs through profit-sharing incentives. The analysis concludes that one of the most effective ways to strengthen cost controls is to reduce the task uncertainty associated with contract negotiations. An adaptive response model is presented in an appendix.

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Document Details

Document Type
Technical Report
Publication Date
Jun 01, 1965
Accession Number
AD0618365

Entities

People

  • Oliver E. Williamson

Organizations

  • RAND Corporation

Tags

Communities of Interest

  • C4I
  • Human Systems
  • Space
  • Weapons Technologies

DTIC Thesaurus Topics

  • Acquisition
  • Aerospace Industry
  • Air Force
  • Contract Administration
  • Contractors
  • Contracts
  • Cost Reductions
  • Defense Industry
  • Economic Analysis
  • Economics
  • Employment
  • Fixed Price Contracts
  • Governments
  • Incentive Contracts
  • Personnel Management
  • Procurement
  • United States

Readers

  • Economics
  • Software Engineering
  • Theoretical Analysis.