DOD's Industrial Modernization Incentives Program: An Evolving Program Needing Policy and Management Improvement

Abstract

We reviewed the adequacy of the Department of Defense's (DOD) Industrial Modernization Incentives Program (IMXP) test and the resulting draft guidance. Through IMIP, DOD provides contractors incentives for investing in capital equipment and manufacturing processes. Program objectives are to lower costs of weapon systems and to improve the industrial base. The program addresses two conditions cited as reducing contractors' willingness to modernize: profits based on costs incurred and unstable weapon system requirements. Both conditions are believed to increase the risk that contractors will not achieve an acceptable return on investment. The two primary incentives to contractors are (1) payments based on actual price reductions and (2) investment protection guarantees if affected weapon systems are terminated.

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Document Details

Document Type
Technical Report
Publication Date
Sep 06, 1985
Accession Number
AD1131543

Entities

Organizations

  • United States Government Accountability Office

Tags

Communities of Interest

  • Weapons Technologies

DTIC Thesaurus Topics

  • Accounting
  • Acquisition
  • Air Force
  • Commerce
  • Computer Programming
  • Contractors
  • Contracts
  • Cost Estimates
  • Cost Reductions
  • Costs
  • Department Of Defense
  • Governments
  • Human Behavior
  • Industrial Modernization
  • Lead Time
  • Manufacturing
  • Money
  • Motivation
  • Procurement
  • Production
  • Radar
  • Small Business
  • System Software
  • Traveling Wave Tubes
  • Traveling Waves
  • United States
  • Weapon Systems

Readers

  • Defense Acquisition Program Management
  • Economics
  • Industrial Economics