Discussion 2 Week 7 Award Fee Contracts - Assignment Example

Award Fee Contracts al Affiliation Award Fee Contracts From the e-Activity, discuss whether or not the agencies mentioned took any actions that reflected the suggestions provided by the Office of Management and Budget. If you think actions were taken, state what actions were taken and explain why those actions were taken. If you think no actions were taken, analyze why no action was taken and whether action should have been taken under the circumstances. Justify your response. According to the report, there were agencies that did not consistently address the guidelines provided by the Office of Management and Budget (OMB) (US Government Accountability Office, 2009), as summarized below:AgenciesFollowed OMB Guidelines on Award Fees to contractsInconsistent in Addressing GuidelinesDODActions taken – award fees linked to outcomesDOENo actions taken – need to update or develop implementing guidelinesHHSNo actions taken – need to update or develop implementing guidelinesDHSNo actions taken – need to update or develop implementing guidelinesNASAImplemented guidelinesNot consistent in implementationThus, only the DOD was noted to have complied with OMB’s guidelines and the four other agencies need to make some adjustments to comply, as recommended.2. Discuss whether contractors provide better work with an award fee.

Include in your discussion on whether or not they are incentivized by the better profit potential of an award-fee contract. Support your position with an example.One strongly believes that contractors provide better work with an award fee. As defined, an award fee “is an amount of money that a contractor may earn in whole or in part by meeting or exceeding subjective criteria stated in an award fee plan” (US Government Accountability Office, 2009, p. 1). It is a form of motivation or incentive that contractors could avail for exceeding expectations or exhibiting exemplary performance.

For instance, a contractor is supposed to complete a painting of a government building in two weeks’ time using total costs of materials amounting to $50,000. If the contactor is able to complete the project in one week’s time and with savings amounting to $5,000, then, the contractor could be given an award fee. The provision would enable the contractor to gain a positive image, in addition to the award fee and would be considered a plus factor for future contracting projects.ReferenceUS Government Accountability Office.

(2009, August 3). 1. From the e-Activity, discuss whether or not the agencies mentioned took any actions that reflected the suggestions provided by the Office of Management and Budget. If you think actions were taken, state what actions were taken and explain why those act. Retrieved from gao.gov: http://www.gao.gov/new.items/d09839t.pdf