First introduced in the E-Government Act of 2002, Share-in-Savings (SiS) contracts are distinct from traditional methods because they allow agencies to award contracts with little or no upfront funding and share the savings with both contractor and government. Agencies can then spend the reserved funds on other programs.
Dr. Kenneth J. Buck led the federal government’s development and implementation of this promising concept. He and his colleagues built a solid framework for SiS contracting including a draft FAR rule, simulation models to support and evaluate the business process, and capped it off by awarding a $3 billion BPA to six major contractors. A confluence of positive and negative factors led to an underwhelming pilot period, failing to catalyze regulatory change and permanently authorize its use.
This paper, which first appeared in the journal PrAcademics Press in 2005, surveys the origins of Share-in-Savings contracts, discusses organizational change, and proposes a business model for agency teams to adapt to their programs.
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