Accession Number:

ADA543885

Title:

Unintended Consequences of Advocating Use of Fixed-Price Contracts in Defense Acquisition Practice

Descriptive Note:

Conference paper

Corporate Author:

NAVAL POSTGRADUATE SCHOOL MONTEREY CA

Personal Author(s):

Report Date:

2011-04-30

Pagination or Media Count:

41.0

Abstract:

Frequent and substantial cost overruns in Major Defense Acquisition Programs MDAP have been criticized by the administration, lawmakers, and taxpayers. Critics often blame the dominant use of cost-plus contracts in the defense procurement system as the root cause of the inefficiency. In turn, a strong preference for fixed-price contracts as opposed to cost-plus contracts has been expressed on multiple occasions. In this research, we highlight the possible unintended consequences of advocating wider use of fixed-price contracts in Department of Defense DoD acquisitions. The implication of this study is that the mindset that fixed-price contracts are better than cost-plus contracts is misleading and can potentially do more harm than good in DoD major weapon system acquisition.

Subject Categories:

  • Administration and Management
  • Logistics, Military Facilities and Supplies

Distribution Statement:

APPROVED FOR PUBLIC RELEASE