New GAO Report on Incentives
The GAO went on to say “in fiscal year 2015, DOD spent $274 billion on contracts for products and services. Some of this money was used on incentive contracts to achieve specific outcomes, such as lower costs or tighter time frames. For these contracts, we found that DOD has increased its use of incentive fees (which objectively measure contractor performance toward set goals) and decreased its use of award fees (which are more subjective). However ,DOD does not consistently collect data on the outcomes of these incentive contracts—so DOD can't determine if they are improving contractor performance. We recommended that DOD collect and analyze relevant contract data.”
For additional information on contractual incentives, see our contracting colleagues’ “Incentive Contracting - Incentives, Award Fee, Award Term” ACQuipedia article. For product support-specific information on incentivizing desired outcomes for both government and industry organizations, see our life cycle logistics “Incentives - Motivating Achievement of Desired Product Support Outcomes” ACQuipedia article.