The Acquisition Handbook

Team Working with IndustryMOD beyond the baseline contractual requirement, and more flexible use of interim paymentarrangements by which any retention against the contract price is adjusted to reflect good or poorperformance. Positive incentives need to be balanced by a clear recognition that sanctions arestill available to MOD and may be applied more rigorously than in the past if contractor performance,despite every effort made, is not up to the mark.Where reopening and examining existing contracts will bring benefit to both MOD and Industry,this should be done using gainshare. The concept of gainshare is central to Smart Acquisition.There is no prescribed manner in which gainshare opportunities might be identified, assessedand implemented, except that its application is focused on existing contracts. Gainshareopportunities may offer one or more of accelerated delivery of the product or service, performancechanges, and reduced costs — faster, better, cheaper. Technology advances, changes totrials programmes, innovative support arrangements, and income stream opportunities from thetransfer of assets are examples of gainshare that may develop while a contract is in action.Effective team working presents the greatest scope to identify mutually beneficial opportunities.The benefits arising are shared between the MOD and the supplier. Sharing arrangementsare not pre-determined in that there is no established formula. They take into account relevantfactors such as contract structure/duration, price/cost format, options for change, source ofideas, etc in order to balance the advantages arising from gainshare.Small Project PointIndustry InvolvementAlthough the key principles of participation, openness and Teamworking stillapply, an individual company’s involvement in an IPT managing more than oneproject may be more intermittent than for major projects. It will depend onproject size, complexity and which projects are at key stages within theacquisition cycle.26