Contract Offsets
collaboration internationally…
both publicly and privately through sovereign funds, government hosts, and contracted corporations providing product and services is an emerging field of philanthropy best done between domestic and foreign foundations and charitable initiatives.
A contract offset is, in essence, an agreement between a contractor and a host government where the contractor agrees to buy specific products or perform specific services from the host government which will aid in the contractor in winning the contract award and offset the government’s anticipated outlay.
Contract offsets have become integral to international defense contracts and provide sponsoring countries an approved opportunity to even-up the balance through trade.
The U.S. Defense industry, for example, exports the majority of the world’s weapons so, therefore, offsets are considered to be crucial to both the buyer and the supplier.
Offsets provide additional advantages for the purchasing country with weapons while providing the defense contractors powerful marketing tools to motivate purchasing by those host nations. Due to the personal or political benefits that contract offsets present, offsets are judged by the parties to be more appealing than the primary defense acquisition alone.
The challenge, of course, is to structure a contract offset to be beneficial to both the host nation (the buyer) and the product provider (the manufacturer). This is no easy process.
The Caius House contract offsets initiative seeks to help host nation and product supplier to identify and fund acceptable projects that make this relationship between the parties work. To do so, we typically look for projects that can demonstrate:
Potential profitability;
Use of the latest technology;
Appeal to a wide variety of customer;
Unique aspects and characteristics of the program;
Competitive advantage;
Shared focus and market priority;
Sustainability;
Non-labor intensiveness; and, the
Transformational nature of the project
The projects we have recommended for consideration thus far have centered around the following initiatives, all in healthcare:
Medical simulation and training, especially for minimally invasive procedures;
Regenerative medicine for cardiovascular, orthopedic, wound and burn care, and oncology protocols;
Predictive medicine centered on genetics;
Aging in place; and,
Patient safety standards.
If you have an interest in our contract offsets project, please let the Caius House team know by contacting us through the following link