Depot Sales of Goods and Services to Private Parties: Pricing in Partnering Agreements

摘要

Public-private partnerships are agreements among organic depot maintenance activities and private industries or other entities to perform work or utilize facilities and equipment. Genuine business partnering initiatives that involve public- and private-sector activities represent a paradigm shift relative to traditional 'buyer-seller' arrangements. A successful partnership must feature higher levels of mutual trust, shared expectations, and shared risk than less collaborative business arrangements. Because the effort to build strong public-private partnerships within the Department of Defense is a relatively new phenomenon, there is little enabling policy readily at hand to guide management decisions. In many cases, current policy has the effect of unintentionally frustrating partnering initiatives. A recent survey of DoD and industry partnership participants identified a number of financial management provisions that differ from standard industry practices, add complexity, and --most importantly--make it difficult to appropriately redistribute financial risk among the enterprise's partners. LMI was tasked by the Deputy Under Secretary of Defense Logistics and Materiel Readiness, to identify financial management impediments to public-private partnering and recommend appropriate changes to law, regulations, and practices. This paper focuses on a particular set of financial management issues that directly affect partnership agreements.