Why Did not the DoD Defend Their FDO's Listed in GAO Report 06-66?

Abstract

In December of 2005, the Government Accountability Office released a report entitled DOD Has Paid Billions in Award and Incentive Fees Regardless of Acquisition Outcomes. The report was an indictment of the manner in which the DoD executed contracts especially award fee contracts and the fee determining officials who were charged with assessing contractor performance and rewarding that performance with their subjective evaluation of that performance. The GAO was asked to determine whether award and incentive fees have been used effectively as a tool for achieving the DoD's desired outcomes. In order to do this, they reviewed a number of major programs and came to the conclusion that award fees were generally not linked to acquisition outcomes. However, many PMs are of an opinion that award fees are an effective tool in communicating the government's expectations and influencing contractor behavior in a positive manner. This paper analyzes the GAO's report and explains why there was such a disconnect between the GAO and DoD Program Managers.