Accession Number : ADP001235

Title :   Price Competition between Major Weapon System Contractors,

Corporate Author : OFFICE OF THE CHIEF OF NAVAL OPERATIONS WASHINGTON DC

Personal Author(s) : Trainor,Dick

Report Date : SEP 1982

Pagination or Media Count : 10

Abstract : This paper has addressed the subject of price competition for major weapon systems at the prime contractor level. It has been shown that most of the 14 variables that determine the economic benefits of price competition have changed over the last 10-20 years. They have changed in a direction that opposes competition as a useful way of reducing and controlling the cost of major systems. The nonrecurring costs associated with establishing a second source are typically greater than the recurring costs that can be saved through competition. Still the policy lingers on, in spite of its lack of viability. The paper has offered reasons for this inconsistency between policy and practice. More importantly, alternatives are offered which, if emphasized, will help control and reduce system costs. These include use of virtual competition, competition at the subcontractor level, breakout and more appropriate contract forms.

Descriptors :   *Economic analysis, *Cost analysis, *Price index, *Logistics support, *Contract administration, Contract proposals, Industries, Weapon systems, High costs, Cost overruns, Inflation(Economics), Management planning and control, Cost effectiveness, Policies, Procurement, Planning programming budgeting, Management information systems, Conferencing(Communications), Symposia

Distribution Statement : APPROVED FOR PUBLIC RELEASE