Profit as a Motivational Tool: Fact or Fiction.
Abstract
The paper examines the Government's profit policy as a motivating factor in the Government procurement contracts; specifically those contracts which involve military weapons acquisition. The evolution of contract types and negotiation guidelines developed in recent decades which contain profit policy statements is presented. Following the first formal policy statement of the Armed Services Procurement Act of 1947, the Armed Services Procurement Regulation, subsequent revisions, and the last major policy study 'Profit 76', are assessed for their ability to motivate greater productivity on the part of Defense contractors. The results of the survey show that profit as a motivating force has been inadequately understood. There exists a divergence of opinion between government and industry as to the weight of influence of the various contract motivators which employ profit. The author suggests that profit as short-term monetary gain may not be an appropriate motivator in Defense contracting. Upon identification of the various circumstances in which other factors such as survival, growth, market share and prestige may weigh heavily as important incentitives, it is recommended that profit be less highly rates as a motivational factor. Incentives must be applied that recognize long-term profit objectives rather than short-term objectives are more highly rated. Keywords include: Armed Forces procurement; Contract administration; and Project management.
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 01, 1984
- Accession Number
- ADA150596
Entities
People
- T. E. Wight
Organizations
- Naval Postgraduate School