A Vendor Quality and Reliability Incentive Procurement Program

The Westinghouse Underseas Division has completed a pilot incentive procurement program to make it mutually profitable to supplier and buyer to obtain quality and reliability in purchased parts. An incentive bonus was offered to a vendor to deliver a product which met our delivery, quality, and reliability requirements. A vendor could make or lose up to seven percent of his normal profit.

Twenty-nine different items were selected, with a total value of $505,240. Total incentives possible were $27,688. Net incentives earned were $19,622.

We experienced our highest total acceptance rate and were able to accelerate delivery schedules of the end product.