Incentive Arrangements for Space Acquisitions
NAVAL POSTGRADUATE SCHOOL MONTEREY CA
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Space Systems acquisition has experienced a paradigm shift in its approach toward the use of contract incentives. This shift in the use of incentives is a matter of tremendous importance to those who develop and buy major Space Systems, but, more importantly, to the industry partners that deal with the Space Missile Systems Center. This shift began under the Bush Administration and, based upon initial signs, may accelerate under the Obama Administration. What are some of these changes, and what will be the impact of revising the governments business strategy In order to get some perspective on the reasons for the changes, it is necessary to understand the history of the use of incentives in the acquisition of major systems by the DoD. How does the DoD incentivize contractors to perform this important job What do they use to motivate performance, and how do they monitor that performance to ensure that this fee is truly earned In the acquisition business, we face these questions on almost a daily basis. We get them from the media. We get them from the Congress. We get them from the senior leadership within the Executive Branch, right up to and including the President of the United States.