Defense Contracting Policy: An Interface Mechanism with the Defense Industry

A broad overview of the contractual relationship between the military and the defense industry with emphasis on contracting trends and the impact of these trends on the nature of the defense industry, shipbuilding in particular. A brief historical survey of government contracting from the American Revolution to the present time is designed to review the principal legislative actions developed to control the procurement process. The advantages and disadvantages of the important contract types are discussed. Defense contracting policy is found to be shifting from cost reimbursement contract to the incentive contract. The trend to contract incentives is found to be an improvement over earlier policy but not without disadvantages. The conclusion is reached that the total package procurement strategy is not favored by shipyard management.