Implementing the Industrial Modernization Incentives Program

Download or read book Implementing the Industrial Modernization Incentives Program written by Geneese Gottschalk and published by . This book was released on 1986 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Defense contractors have often been reluctant to make significant investments in modern, more efficient equipment that could lower costs for weapons systems. This reluctance is due to the risk of premature program termination and a pricing policy which can make investment financially unattractive. This report reviews DoD's test of the Industrial Modernization Incentives Program (IMIP), a DoD-wide effort to provide incentives to invest in modern capital equipment by allowing contractors to retain a share of productivity-induced cost savings. Conclusions are drawn with respect to IMIP's objectives and applicability, the need to carefully project financial effects of IMIP agreements, and IMIP's relationship to other acquisition issues.