System Effectiveness Incentive Structures. Volume I.
CONSULTEC INC ROCKVILLE MD
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The study developed a methodology for use in structuring contractual incentive provisions based on system effectiveness measures. The study discusses incentive formulation and implementation in the context of a Concept FormulationContract Definition type of procurement. However, its results are not limited to that environment. The study presents the procedure for developing a hierarchical system effectiveness structure using a unique chain concept to derive a single measure of system effectiveness System Figure of Merit from a set of accountable factors. This concept is based on a series of enabling relationships for computing Figures of Merit at various levels in the structure. A procedure is presented for constructing a payoff curve that indicates the appropriate incentive fee for each possible value of the System Figure of Merit. Author
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