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Life Cycle Logistics

Competitive Acquisition Best Practices/Lessons Learned

Competitive Acquisition Best Practices/Lessons Learned

Competitive Acquisition Best Practices/Lessons Learned
Bill Kobren
The Office of the Principal Director, Defense Pricing and Contracting (DPC) recently issued an updated “Best Practices/Lessons Learned for Competitive Acquisitions” of interest (Version 1.1 dated August 5, 2022). Among the numerous tips, recommendations, lessons learned, and proven practices included in this document, would encourage life cycle logisticians and product support managers to pay particular attention to the new “Incentives” section, which identifies use (of) incentives when there are clear, measurable performance metrics or critical dates that are important to the program” as a best practice, and identifies six key lessons learned, saying:
  • “Incentives work: On the plus side they focus contractors on what the program considers most important. On the downside, they may cause contractors to pay less attention to the areas that aren’t incentivized.
  • Incentives need to be achievable. Contractors will only focus on achieving an incentive as long as they believe it is achievable.
  • Schedule incentives are a two-edged sword and their interaction with contract type is important. If achievable and in a fixed price contract, they work well. If used in a cost type contract, they may cause the contractor to chase the schedule and ignore costs.
  • Consider the use of incentives. Discussion should include whether or not performance beyond the specification requirements is of value to the warfighter and whether simply changing the specification based on offers or the use of incentives is the better option.
  • Consider the effects schedule, technical and cost incentives have on each other. Contract type makes a huge difference in developing incentives.
  • Consider whether the proposal describes how the offeror will achieve the aspects of the contract that are being incentivized. Consider whether the offeror’s efforts to achieve the incentives will result in reduced performance other areas of the contract.”

As a sidenote, these lessons learned reinforce and reaffirm key observations and insights made in our life cycle logistics ACQuipedia article entitled “Performance Based Logistics (PBL) Incentives - Motivating Achievement of Desired Support Outcomes.