DOD's Industrial Modernization Incentives Program: An Evolving Program Needing Policy and Management Improvement
[Technical Report, Congressional Report]
GENERAL ACCOUNTING OFFICE WASHINGTON DC
Pagination or Media Count:
We reviewed the adequacy of the Department of Defenses DOD Industrial Modernization Incentives Program IMXP test and the resulting draft guidance. Through IMIP, DOD provides contractors incentives for investing in capital equipment and manufacturing processes. Program objectives are to lower costs of weapon systems and to improve the industrial base. The program addresses two conditions cited as reducing contractors willingness to modernize profits based on costs incurred and unstable weapon system requirements. Both conditions are believed to increase the risk that contractors will not achieve an acceptable return on investment. The two primary incentives to contractors are 1 payments based on actual price reductions and 2 investment protection guarantees if affected weapon systems are terminated.
- Administration and Management
- Economics and Cost Analysis