Study of Performance-Based Payments (PBP) and Department of Defense (DoD) Contracts

摘要

The purpose of this thesis is to examine how three major defense acquisition programs (MDAPs) C- 17, Family of Medium Tactical Vehicles (FMTV), E-2C have used performance-based payments (PBP) and to determine what the important issues are, and how this method of contract financing might be enhanced in Department of Defense (DoD) contracts. Each of the MDAPs was reviewed to provide background about the acquisition program, and their use of PBP. A series of analyses was conducted to assess the impact of using PBP versus progress payments based on costs on a contractor's cash flow. Fourteen telephone interviews were conducted with DoD and defense contractors involved with PBP. Analysis led to concluding: regulation limits the use of PBP, PBP education and training is insufficient, the PEP payment process needs to be improved, PEP appear to facilitate timely deliveries, PEP are not suited for all procurements, and there are cases when PBP are advantageous. Recommendations to enhance PBP are: developing additional training/education and materials/programs, improving the payment end of PEP, incorporating "annual reevaluation" clauses in multi- ear contracts, and considering whether PBP are appropriatte.