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End-Results Contracting


End-results or end-use contracting is the newest concept in service contracting and is not yet widely available. EG&G takes over all of the operational risk for a particular end result, such as equipment availability or throughput. In this case, availability or throughput is the product being bought and sold. The owner and EG&G agree on a definition for the end result and a way to measure the results. For example, availability might be defined as maintaining the system available 95% of the annual hours. The contract payment schedule is based on how well EG&G ME achieves the agreed-upon objectives. This type of contract may be appropriate for owners who have sensitive customers or critical operational needs that depend on maintaining a certain level of operation or productivity. How risk is shared between the owner and EG&G depends on the type or number of end results purchased. Maximum contract price is tied to the amount and complexity of the end results purchased.


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