Collaborative Approach to Reducing Program Governance Costs
With the Pentagon and its suppliers looking at potential cuts ranging from $500 billion to $1 trillion over the next 10 years, the perennial talk of finding hidden economies has taken on new urgency. An improved, more collaborative model of the traditional customer-contractor relationship has never been more vital.One important step is already underway: the move from cost-plus to fixed-price type contracts. For instance, when programs evolve from development to production, technical and schedule risks are well understood, making it appropriate to transition to a fixed-price contract structure. Unfortunately, the very program governance processes that are supposed to drive savings are threatening a substantial portion of the projected savings. This session will present a real case study where the government and one of its major Prime contractors collaboratively developed a new approach to program governance consistent with current management, oversight and information needs at a much more affordable cost.
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