An Objective Functional Approach to Structuring Contractual Performance Incentives.

摘要

A method of structuring contractual performance incentives is developed in this report. The method derives the incentive structure directly from the modeled Life Cycle Cost (LCC). The method is illustrated for a hypothetical tactical surface-to-surface missile system and an example is provided of the methods use, at the component level for a single performance parameter, and incorporation into an actual procurement. The method is analysized with existing Multiple Incentive Contracts Analysis Program (MICAP) approaches and a discussion provided.