Accession Number : ADP002757

Title :   Assumption of Risk in the R&D Environment,

Corporate Author : UNIVERSITY OF SOUTHERN CALIFORNIA LOS ANGELES

Personal Author(s) : Gill,J. H.

Report Date : 1983

Pagination or Media Count : 4

Abstract : There has been a traditional philosophy regarding the use of different types of contracts to share risk during the development of a major weapon system. This philosophy would have the Government assume the burden of risk early in the life of the system through the use of Cost Type contracts. As the requirement becomes more defined, the burden of risk is gradually transferred to the contractor wth a commensurate increase in potential profit. If we accept the premise that the Acquisition system requires improvement, what are the alternatives that may be considered to alter the process? A method that has been utilized by the Ballistic Missile Office has been to dramatically alter the traditional concept of assumption of risk by offering Contractors the opportunity to take their fate into their own hands and assume a major share of the cost risk while simultaneously reducing the risk associated with technical failure.

Descriptors :   *Government procurement, *Contract administration, *Management planning and control, *Risk, Weapon systems, Research management, Resource management, Acquisition, Requirements, Strategy, Management, Cost estimates, Planning, Profits, Cost overruns, Contracts, Symposia

Distribution Statement : APPROVED FOR PUBLIC RELEASE