Incentives, Profit, and Business Risk

22.	We'd like to learn more about the incentives to participate in building an NEC overseas. Based on your firm's experience, how much of an incentive are each of the factors listed below when deciding to participate in building a NEC?

		Not an Incentive	Minor Incentive	Moderate Incentive	Major Incentive
22a.	State/OBO projects allow us to make money
22b.	Prestige of building something for our country
22c.	Challenge of building to high standards in often difficult environments
22d.	State/OBO is a reliable customer
22e.	Working with State/OBO provides opportunities to train project managers in challenging situations
22f.	Desire to serve our country
22g.	State/OBO projects continue through difficult times in the rest of the economy
22h.	Experience with State/OBO projects may improve access to other government contracts
22i.	Experiences learning about and using different construction methods or materials in different parts of the world
22j.	Potential for generating new business in overseas markets
22k.	Other

23.	Of the incentives listed above, which are the three greatest ones in your firm's view?

24.	If our information above was correct, within our timeframe of fiscal years 2001-2007, your firm completed one or more NEC building projects with State. If the information was correct, please continue at 24.1? If your firm has not yet completed a project then Skip to question 24.2

	24.1 On how many of your firm's completed building projects did your firm make a profit, break even, or lose money? Please provide an actual number of projects. Number of completed building projects that...

24a.	Made profit*

24b.	Broke even

24c.	Lost money

	*We are defining profit as the monetary returns received after all charges have been paid, including regular salaries.

	How does your firm define "profit"? In fiscal years 2005-2007, what portion of your firm's total revenues were generated by State/OBO projects?

	24.2 - For how many ongoing, not completed NEC projects is your firm currently under contract?
	(Click one.)
	1.		None --> Skip to question 24.4
	2.		One or more --> Continue to question 24.3

	24.3 On how many of your firm's ongoing, not completed projects do you expect your firm will make a profit, break even, or lose money? Please provide an actual number. Number of ongoing, not completed building projects on which your firm expects to ...

24d.	Make a profit*

24e.	Break even

24f.	Lose money

	*We are defining profit as the monetary returns received after all charges have been paid, including regular salaries.

	For projects not yet completed, do you currently expect your firm's profits will be in line with the profits you expected when you competed for the contract(s)?

	24.4. Generally speaking, when you compare the profitability of your firm's State/OBO projects with the overall profitability of all your firm's other construction projects, how profitable for your firm are the State/OBO projects?
	(Click one.)
	1.		Much more profitable than your other construction projects
	2.		Somewhat more profitable than your other construction projects
	3.		About as profitable as your other construction projects
	4.		Somewhat less profitable than your other construction projects
	5.		Much less profitable than your other construction projects
	6.		No basis to judge

	For completed building projects, were your firm's profits in line with the profits you expected when you competed for the building project(s)?

	What risks does your company consider when bidding on State contracts for overseas construction, and what problems did you actually encounter on the projects where your firm was the successful bidder?

25.	In your view, have your firm's profits been commensurate with the risks involved?
	(Click one.)
	1.		Yes
	2.		No

	What are the elements of risk? Which risks are better borne by the U.S. government? Which are better borne by the contractor?

26.	In your view, does the U.S. government assume enough or not enough risk during the building of NECs?
	(Click one.)
	1.		Enough
	2.		Not enough
	3.		Not sure

27.	Is your firm currently in the process of filing or have you ever filed a bid protest pertaining to a State/OBO contract for a NEC?
	(Click one.)
	1.		Yes
	2.		No
	3.		Not sure

28.	Has your firm ever filed claims against the government under State/OBO contracts for NECs?
	(Click one.)
	1.		Yes
	2.		No
	3.		Not sure

29.	Has your firm ever been assessed liquidated damages under State/OBO contracts for NECs?
	(Click one.)
	1.		Yes
	2.		No
	3.		Not sure

	Discuss as necessary any liquidated damages.

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Full Report: GAO-09-48

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