An Analysis of the Performance-Risk Trade-Off in Source Selection Decision Making
Abstract
Each year the Air Force awards weapon system contracts worth billions of dollars using the source selection process. In the source selection, performance and risk assessments are evaluated to determine the best proposal; the proposal that gives the best overall value. The purpose of this research was to investigate the performance/risk trade-off in the source selection decision making process. The study also examined the effect individual risk propensities and the nature of item being evaluated have on the performance/risk trade-off decisions. Air Force acquisition personnel stationed at Aeronautical Systems Center, Wright-Patterson AFB, OH, who had participated in a source selection were surveyed. The survey required respondents to rank various color-risk combinations used in a source selection from most to least preferred. Respondents also indicated their degree of preference between color-risk rating pairs. Comparisons were made for two item summary levels: technical capability and management. A definite rank order exists among color-risk ratings. The rank is as follows: Blue-Low, Green-Low/Blue-Moderate (tied), Green-Moderate, Blue- High, Yellow-Low, Green-High, Yellow-Moderate, and Yellow-High. Risk propensity and item summary level do not significantly influence the rank order. Risk, Acquisition, Air Force procurement, Decision making source selection, Contract award.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 1993
- Accession Number
- ADA275904
Entities
People
- Jeffrey E. Wainwright
- Richard G. Pierce
Organizations
- Air Force Institute of Technology