PUBLIC POLICY TOWARD SUBCONTRACTING
Abstract
The Memorandum considers the rationale for public regulation of subcontracting, analyzes current subcontracting policy, and suggests changes in current policy. The need for subcontracting regulation in the acquisition of weapon systems depends on the method used to select a prime contractor and the type of contract between the prime contractor and the Government. For all contracts let without effective price competition -these include but are not limited to all cost types of contracts -- the Government should be concerned with decisions both about which items to subcontract and which firms are to receive the subcontracts. Such regulation is needed because prime contractors lack the motivation to minimize target costs. The need for public concern about subcontracting is brought out by an examination of the C-141 program, which has a number of atypical features. The most interesting aspect is the extensive use of competitive bidding to choose subcontractors, which demonstrates the feasibility of extensive price rivalry.
Document Details
- Document Type
- Technical Report
- Publication Date
- May 01, 1965
- Accession Number
- AD0615656
Entities
People
- George R. Hall
- Robert E. Johnson
Organizations
- RAND Corporation