Performance of the Defense Acquisition System. 2014 Annual Report
Abstract
By human nature, performance is incentive-driven. Organizations and individuals combine often competing incentives as they take actions and set priorities. In our second annual report on acquisition performance, we focus on incentives particularly those from contract types and profits or fees in addition to updating our prior analysis for which recent data might affect the statistical results. Most of the development and production on acquisition programs is conducted by industry under contract to the government. Therefore, we examine various incentive techniques to see how effective they are at driving cost, schedule, and technical performance. As in our first report, we emphasize objective data analysis as we examine the effects of statutes, policies, and tradecraft on the outcomes of acquisition. Often our data are limited in the number of cases that report or because significant manual effort is required to structure the data for analysis. For these reasons, we continue to rely on statistical techniques to identify trends and gauge the consistency (and thus broader applicability) of our findings. As our body of analysis grows, we are finding more practical insights from their results. Of particular note, this year s report shows that the prevalent debate of cost-type versus fixed-price contracting is misguided. The real issue is how effective the incentives are for each contract type within each of those groupings. There are cost-type contracts that are very effective at controlling cost while others are not. Fixed-price contracts are effective at controlling cost but some types do not share those savings with the government, yielding higher margins (sometimes spectacularly so) and higher prices for our taxpayers.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 13, 2014
- Accession Number
- ADA603782
Entities
Organizations
- Office Of The Under Secretary Of Defense