An Examination of Recent Defense Contract Outcomes in the Incentive Environment

Abstract

The thesis presents an empirical evaluation of the outcomes of a large number of recently completed defense contracts. Profit outcomes and cost growth resulting from changes in the scope of the contract and from overrun/ underrun are examined for incentive and fixed fee contracts. Incentive features such as share ratios and multiple incentives are investigated to determine their effect on contract outcomes. Linear regression and analysis of variance techniques are used to analyze the outcomes of 2683 Army, Navy, and Air Force contracts. The types of contracts included in the data sample are fixed-price incentive, cost-plus-incentive-fee, and cost-plus-a-fixed-fee contracts. An examination of multiple incentive contracts indicates how contracts with performance incentives, as well as cost incentives, tend to earn performance incentives, regardless of the contract cost outcome.

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Document Details

Document Type
Technical Report
Publication Date
Sep 01, 1971
Accession Number
AD0731764

Entities

People

  • John M. Parker Jr.

Organizations

  • Air Force Institute of Technology

Tags

Communities of Interest

  • Biomedical
  • Human Systems
  • Materials and Manufacturing Processes
  • Weapons Technologies

DTIC Thesaurus Topics

  • Acquisition
  • Air Force
  • Business Administration
  • Contractors
  • Contracts
  • Cost Overruns
  • Databases
  • Department Of Defense
  • Fixed Price Contracts
  • Governments
  • Information Science
  • Logistics Management
  • National Governments
  • National Security
  • Standards
  • United States
  • United States Government

Fields of Study

  • Political science

Readers

  • Government Contracting/Procurement.
  • Statistical inference.