Tag Archives: David E. Frick

Risk in Fixed-Price Contracts


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Author: David E. Frick, DBA

Current federal policy expresses a strong preference for fixed-price contracts in federal contracting. Firm- fixed-price contracts are depicted as existing on the extreme left of the continuum of risk. As we progress through the various fixed- price flavors and into cost-type contracts, the assertion is that risk shifts from the vendor to the government. We even describe contract types on the extreme right (e.g., labor hour and time and material) as “high risk.”

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A New Set of Forces


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Author: David E. Frick, Ph.D.

Michael E. Porter’s Five Forces model offers a visual depiction of the five forces that determine the competitive intensity and therefore attractiveness of a market. The elements of his model for this discussion are not relevant, but the underlying principle of the model is—forces can be self-correcting. Any imbalance in one element tends to motivate businesses to take some action to take advantage of the imbalance—e.g., entering or leaving the market or raising or lowering prices. The result is that eventually, the industry will approach a state of equilibrium (pure competition) where profits are minimal. A more simplistic example of self-correcting forces is the venerable law of supply and demand. Changes in the aggregate supply or demand of a product tend to affect the price demanded or the amount of the product offered for sale. The ultimate example of self-correcting forces is the free market itself.

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The Fallacy of Quantifying Risk


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Author: David E. Frick, Ph.D.

Nearly every article you see in industry and within the DoD literature on the topic of “risk management” demonstrates, advocates, or aggrandizes the attempt to quantify risk. One might think that if risk management was truly a science and uncertainty could be systematically quantified in some manner, then the maturity of the profession of project or program management, as measured by the number of projects or programs that meet cost, schedule, and performance goals, would increase over time. Alas, the profession is not able to make this claim.

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Motivating the Knowledge Worker


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Author: David E. Frick

Commonly accepted economic theory suggests that workers are rational actors and make decisions that will maximize expected outcomes. As such, managers should be able to influence behaviors to meet business goals by manipulating the expectations of outcomes. Conversely, social science practitioners suggest that workers often make decisions that are irrational. Knowledge workers are a growing sector of the workforce and are the backbone for entire federal agencies. The acquisition community falls within this category. Identifying factors that influence the performance of knowledge workers may be critical to maintaining high levels of organizational performance. This research focused on identifying the factors that encourage knowledge workers to maintain high levels of performance.

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