Long-Term Relationship

Long-Term Relationship

Introduction

Whenever we plan to make procurement, we always have to decide that whether the government is willing to finance it or not. Converting from a concept phase to a full production phase in a short period of time is a bit risky but from the help of the robotics in the machinery department this will be made easier to be done. Although this expansion might need some government involvement and some support from them (Wall Street Strategic Capital, 2012).

The expansion may take place but not until approaches of contract financing are being decided. There are various kinds of approaches and it is the owner/CEO's decision to choose the best contract financing approach for the organization. There will be some policies to be looked over according to the Defense Contract Audit Agency (DCAA) but according to the organizations needs. Determine all those approaches needed for the organization as in quantitatively and qualitatively by the government (U.S. Small Business Administration, 2005).

Shifting from a concept phase to a full production will be difficult but by the use of robotics it will be much easier. The expansion needs to take place within a short period of time and the machinery department is the primary sector where the work needs to be running in a full production flow (Keogh, 2006).

Now the approaches which will be needed for contract financing must be foreseen to assess the various ways of finance to the organization (Keogh, 2006).

Discussion

Contract Financing is a declaration of providing money to the contractor before the projects finalizing and even before accepting any service or commodities by the government. The most common reasons we need contract financing is for the accelerated performance of financing of contracts, making large amounts acquisitions possible in a short time, increasing the competitions in more markets, supporting with subsidies to the small firms who are trying to enter the new market, cutting off extra costs to lower the contract cost and reducing the risk of the contractor to work on the project with their safety being determined but everything goes in the governments interest before the finance is being contracted (U.S. Small Business Administration, 2005).

Contract financing doesn't include lease/rental payments, invoice/delivery payments and not even partial deliveries. Contractor may request for advance payments which may affect the company's cash flows as a full production may require an additional financing for further production. Contractor may also ask for private financing rather than the government grants. The guarantees of loan can't be trusted but due to contractors requests it might affect our production. At times when technical data will be required then the government will involve for multiple purposes. There should be true and fair proposal analysis techniques to be followed while determining the price of the contract or else being prompted during work starts annoying the owner and even the contractor. This usually occurs due to the speed of delivering the service, the length and time duration of the period it has been contracted for, barriers causing limitations, duration ...