Incentive Arrangements for Space Acquisitions

Abstract

Space Systems acquisition has experienced a paradigm shift in its approach toward the use of contract incentives. This shift in the use of incentives is a matter of tremendous importance to those who develop and buy major Space Systems, but, more importantly, to the industry partners that deal with the Space & Missile Systems Center. This shift began under the Bush Administration and, based upon initial signs, may accelerate under the Obama Administration. What are some of these changes, and what will be the impact of revising the government's business strategy? In order to get some perspective on the reasons for the changes, it is necessary to understand the history of the use of incentives in the acquisition of major systems by the DoD.