Strategies for R&D contracting

Parenthetically we may note that CPFF contracts might be used more effectively than they have been in R&D work. Rather than concentrating on the final result to be achieved, the contract might be let for a period of, say, a year with the explicit understanding that at the end of that time the contractor’s performance would be evaluated, and that, if he gave evidence of substantial progress and hope of ultimate success, the contract would be extended. Otherwise it would be canceled.

 

This puts pressure on the contractor to perform substantively in a short period of time. Of course this same procedure might be used with an incentive type contract as well.

That was Frederick Moore in Military Procurement and Contracting. I think about this quote fairly often in relation to decision making under uncertainty.