Navy Announces Reward Program for Top Performers The Navy plans to establish a Preferred Supplier Program to reward top-performing contractors. Participating companies “would receive more favorable contract terms and conditions,” the Navy said in a May 24 Federal Register notice. But they will not receive preference in source selection. To be chosen for the program, the Navy said contractors must demonstrate “exemplary performance, at the corporate level, in the areas of cost, schedule, performance, quality, and business relations.” It said energy efficiency will be an important factor in the grading. The deputy assistant secretary of the Navy for acquisition and logistics management will rate companies on factors including product quality, schedule, cost control, management responsiveness, management of key personnel and utilization of small businesses. Rewards for preferred contractors will include more favorable progress payments; recognition of [preferred status] in the development of profit or fee based upon weighted guidelines; tailored contract reporting requirements; and special award fee pools. “Companies in the private sector that have implemented PSPs have significantly improved performance,” the notice said. “Cash flow, profit, and contract terms and conditions that reduce contractor costs and risk are powerful incentives that can be used to motivate contractors to perform at a high level.” The program is part of an acquisition overhaul announced by Navy Secretary Ray Mabus in a May 5 speech to the Navy League’s Sea-Air-Space symposium in National Harbor, MD. Mabus outlined five principles for improving acquisition, according to the Navy News Service: •Clearly identify requirements. •Raise the bar on contract performance. •Rebuild the acquisition work force. •Support the industrial base. •“Make every dollar count.” “Quality has to improve, man hours have to come down, and budgets and milestones have to be met. That’s the bar,” he said. The Navy is asking for comments by July 23 at preferredsupplier@navy.mil.