The Contracting World Turned Upside-Down: The Preproduction Evaluation Clause and its Affects on Traditional Risk Allocation Methods
JUDGE ADVOCATE GENERAL'S SCHOOL CHARLOTTESVILE VA
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The U.S. Army Materiel Command developed the Preproduction Evaluation PPE clause in the late 1960s. The clause requires a contractor to review and correct specification deficiencies during the mass production of an end item. The Army believed that the clause would shift the risks of deficiencies in contract specifications to contractors and reduce the number of delays and change orders in initial production contracts. This analysis examines the Armys success in accomplishing those goals. It reviews typical risk allocation practices in Government contracting and discusses how the PPE clause has altered those practices. It also examines the validity of some of the contractors complaints concerning the clause and its implementation.
- Administration and Management
- Manufacturing and Industrial Engineering and Control of Production Systems
- Logistics, Military Facilities and Supplies