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This annotated briefing examines the incentives of participants in the Air Force's sourcing process (encompassing both A-76 competitions and direct conversions). The goal of this research is to suggest how process participants can best be induced to start and complete cost-effective sourcing studies that will help the Air Force realize its goal of reducing the cost of support activities without inappropriately reducing military capability or quality of life. Personnel at the Air Staff, major commands, and installations play important roles in identifying activities to be studied and conducting sourcing studies. Although the Air Staff has strong fiscal incentives to start and complete sourcing studies, it relies on command and installation personnel actually to carry out sourcing activities. Major command leadership, due to informational asymmetries, is largely dependent on its functional and installation personnel to identify prospective studies and complete them successfully. Unfortunately, functional and installation personnel have strong incentives to work against sourcing studies, and installation commanders' tenures are often too short to affect the process adequately. The Air Staff has passed down operations and maintenance budget cuts to the major commands, providing them with fiscal incentives to perform sourcing studies as well as pursue other cost-saving activities. However, the Air Staff faces a difficult challenge associated with appropriate allocation of budget cuts, and these cuts do not address the challenges that major commands face in motivating their functional and installation personnel.

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