Risk reduction through application of essential performance requirements warranties

The author presents the background and provisions of the current warranty law and, in particular, the EPR (essential performance requirement) warranty. Methods are described for analyzing risk associated with the acquisition of high-technology weapon systems and with other acquisitions. Risks are examined in the context of the overall procurement goals and objectives, and the ways in which EPR warranties might contribute to meeting these goals and objectives are explored. The tradeoff analyses of the economic aspects of EPRs are addressed. It is noted that warranties can assist program managers in fielding effective systems that have lower life-cycle costs. Motivating the contractor to satisfy these prime user requirements is the ultimate goal