Accession Number : ADA323881

Title :   Cancellations and Delays in Completion of Department of Defense A-76 Cost Comparisons.

Corporate Author : RAND CORP SANTA MONICA CA

Personal Author(s) : Keating, Edward G.

PDF Url : ADA323881

Report Date : 1997

Pagination or Media Count : 72

Abstract : As the Department of Defense considers expanding its use of contractors, we attempted to glean lessons and insights from the recent DoD history of government/contractor cost comparisons. Previous studies, e.g., Savas (1992), Marcus (1993), Uttley (1993), Tighe et al. (1996), argue there is significant potential for savings and other improvements from competition and outsourcing. However, we find that since 1978 there have been approximately five A-76 cost comparisons canceled for every eight completed. Further, those completed have typically taken about two years (and often considerably longer) to complete. If the DoD is to fully benefit from competition, it would be beneficial to understand and reduce cancellations and delays in A-76 cost comparisons. Outsourcing in the DoD has taken a variety of approaches. For example, new missions, such as maintaining a new weapon system, can be assigned to contractors directly without a government/contractor cost comparison. Also, there is a process called "direct conversion" whereby functions employing ten or fewer civilians can be turned over to contractors without a government/contractor cost comparison. However, this briefing focuses exclusively on the subset of attempted and completed outsourcing actions that has involved government/contractor cost comparisons that occurred between FY 1978 and FY 1994. Government/contractor cost comparisons follow the process described in Office of Management and Budget Circular A-76. A cost comparison is announced, a work statement describing the performance required is drafted, and a decision is reached as to whether a contractor or government employee 'Most Efficient Organization' (MEO) is the cheapest approach.

Descriptors :   *DEPARTMENT OF DEFENSE, *LESSONS LEARNED, *COST ANALYSIS, *COMPARISON, *CONTRACTORS, CONVERSION, ORGANIZATIONS, WEAPON SYSTEMS, EFFICIENCY, COSTS, MISSIONS, EXPANSION, GOVERNMENT EMPLOYEES.

Subject Categories : Administration and Management
      Economics and Cost Analysis
      Government and Political Science

Distribution Statement : APPROVED FOR PUBLIC RELEASE