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Navy Department Starts Industry Contracting Incentive Program

By Cmdr. Victor Chen, Office of Assistant Secretary of the Navy for Research, Development and Acquisition

WASHINGTON (NNS) -- The Department of the Navy announced May 24 via the intention to pilot a Preferred Supplier Program, which could offer favorable contractual terms and conditions for contractors demonstrating exemplary performance in cost control, quality and energy efficiency among other factors.

Earlier in May, Secretary of the Navy Ray Mabus announced his intention to "reward contractors with favorable contract terms and conditions and favorable payment schedules in return for consistent and exemplary contract performance."

The pilot program is in a public comment phase. Pending approval by the Assistant Secretary of the Navy for Research, Development and Acquisition, the pilot expects to commence October 1, 2010.

To start, top suppliers for the Department by contract value will be rated by DoN in several areas, including quality, cost, responsiveness, adherence to schedule and energy efficiencies. The baseline for company ratings will be taken from the Contractor Performance Assessment Reporting System (CPARS). Additional factors to be included are under review.

Companies getting high marks will be eligible for financial incentives. The highest rating would require companies to submit their plans to improve energy efficiency in their operations. This supports of one of Secretary Mabus' energy goals for the Department.

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