No Blackout Dates for Good Performance

The Defense Department is getting better at writing performance-based contracts, but it is still reviewing improvements to guidelines to reward cost reduction and innovation, said Ash Carter, Pentagon acquisition czar. DOD already is “giving greater consideration” to fixed-price incentive firm contracts that use a “50-50 [government-contractor] share line and 120-percent ceiling as a point of departure,” Carter told members of the House Appropriations Committee’s defense panel last week. The Pentagon also is planning to launch a defense-wide Superior Supplier Incentive Program, which Carter said is “like a frequent flyer program or a gold star program to reward contractors who consistently control their cost and demonstrate exemplary performance.” He also said during his April 13 testimony DOD needs to quash the mindset that “directed buys from two designated suppliers represents real competition.” That non-optimal set-up is what Defense Secretary Robert Gates calls “Washington competition,” noted Carter. (Carter’s written testimony)