Customer-Supplier Relationships Can Be Improved Through Partnering

NSIAD-94-173: Published: Jul 19, 1994. Publicly Released: Aug 29, 1994.

Additional Materials:


Office of Public Affairs
(202) 512-4800

Pursuant to a congressional request, GAO reviewed various cooperative, private-sector business relationships called partnerships, focusing on the: (1) decisionmaking process for forming partnerships; (2) partnerships' management practices, particularly contract terms and accountability and risk safeguards; and (3) private-sector partnerships' benefits and the potential benefits for the Department of Defense.

GAO found that: (1) companies enter into partnerships when, after evaluating their needs and goals, they believe they can benefit from such a relationship and the benefits outweigh the costs; (2) partnerships cannot be developed with every supplier and customer because they require resource investments or are inappropriate; (3) companies that have achieved benefits from partnerships have common characteristics, including strong top management support, an organization culture that values cooperative behavior, and a commitment to work toward mutual benefits and long-term goals; (4) partnerships can pose risks, such as becoming too dependent on a few suppliers, complacency in upholding the partnership's goals and accountability standards, and noncompetitive prices; (5) partnership management practices to ensure goal achievement and minimize risks include clear contract terms, intensive management involvement, performance monitoring, internal controls, problem-solving procedures, and periodic evaluations; (6) successful partnerships have reduced companies' costs and improved their service and quality for both partners; (7) the Army Corps of Engineers and the Navy Fleet Ballistic Missile Program have developed partnerships with their contractors and the resulting cooperative relationships have reduced costs and schedule delays and improved performance; and (8) DOD could expand partnerships under certain circumstances and with appropriate management controls.

Apr 14, 2016

Mar 10, 2016

Mar 7, 2016

Jan 4, 2016

Sep 23, 2015

Aug 31, 2015

Aug 3, 2015

Jul 15, 2015

Jul 7, 2015

Jun 16, 2015

Looking for more? Browse all our products here