Determination of Contract Suitability to the Award Fee Concept.
Abstract
The concept of the Award Fee contract has existed within the federal government since the 1950s. The Navy and the National Aeronautical and Space Administration used Award Fee contracts on a limited basis in the early 1960s. The Air Force still considered their use experimental as late as 1978. In FY 79 Award fee accounted for 2.9 percent of all contracts over $10,000, and totaled over $1.5 billion. An estimate of the government's administrative costs for a moderate-sized Award Fee program was $115,000 annually. The burden of the administrative costs is considered to be justified when the government realizes greater benefits as a result of the Award Fee provision. There is a general lack of definitive guidance for evaluating the suitability of any contract to the Award Fee concept. With no formalized guidelines for the selection of a contract, there is no objective way to judge the possible, or probable, cost to benefit ratio of a given contract.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 01, 1981
- Accession Number
- ADA107465
Entities
People
- David D. Odor
- Holly R. Mclelland
Organizations
- Air Force Institute of Technology