Inducing contractors to maximize within a budget constraint

During World War II, there was more to accomplish than there were resources at hand. The attitude of contractors was, “How much can we do with what we’ve got?” A similar philosophy is evident among contractors in the most efficiently conducted 1950’s programs studied by my colleagues and me on the Harvard Weapons Acquisition Research Project.

 

But when the pressure is off, and especially when there is a general surplus of defense industry resources relative to program demands, the characteristic attitude is, “What in the world can we do to keep our existing staff busy?” Then cost controls falter, gold-plating and excessive complication of products are fostered, and the best technical personnel are diverted away from problem-solving of a constructive sort into proposal writing and brochuremanship.

 

… Contractors must somehow be induced to maximize output given their limited resources, not to maximize the quantity of resources they can spread over a restricted array of programs.

Frederic Scherer. “Major Systems Acquisition Reform: Part 2.” (1975, Jun. 16 – Jul. 24). Hearings before the Subcommittee on Federal Spending Practices, Efficiency, and Open Government of the Committee on Government Operations, U.S. Senate, 94th Congress, 1st Session, Part 2.

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