Problems with the New Department of Defense Profit Policy.
AIR FORCE INST OF TECH WRIGHT-PATTERSON AFB OHIO SCHOOL OF ENGINEERING
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The goal of DoD profit policy is to pay the contractor a fair profit for work performed on contract. Fair profit is interpreted as rewarding the contractor for risk assumed and facilities provided, while recognizing outstanding performance and encouraging efficiency. This goal is not always attainable. Two major forces that impact on DoD procurement most heavily are the political environment e.g. pressures from Congress, defense industry groups and the taxpayer, and the contracting environment, e.g. laws and regulations associated with purchasing military hardware. This study seeks to identify potential problem areas that may hinder successful implementation of the new DoD profit policy. It identifies problems related to allocation of facilities capital to a contract computation of the prenegotiation profit objective for facilities investment inclusion of facilities capital cost of money as an allowable cost and application of the productivity reward.
- Administration and Management
- Economics and Cost Analysis