Logistic Support Cost Commitments for Life Cycle Cost Reduction

Abstract

In its efforts of recent years to reverse the trend of increasing operating and support (O and S) costs of weapon systems and equipment, the Department of Defense (DoD) has begun to use several new contracting techniques to transmit Government cost reduction goals to the Contractor during equipment development and production. One of these techniques is the Logistic Support Cost (LSC) Commitment. The LSC Commitment has three primary elements: (1) a target logistic support cost (TLSC) defined in terms of a cost model framework, (2) a field verification test procedure, and (3) a contract remedy or price adjustment based on verification test results. This report summarizes results of a recent study which investigates the incentives conveyed by the LSC Commitment and the risks accompanying its implementation. It focuses particularly on the impact of statistical risk on the interpretation of verification test results, and presents guidance for structuring future LSC Commitments.

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Document Details

Document Type
Technical Report
Publication Date
Jun 01, 1977
Accession Number
ADA043034

Entities

People

  • Dwight E. Collins

Organizations

  • LMI

Tags

Communities of Interest

  • Human Systems
  • Weapons Technologies

DTIC Thesaurus Topics

  • Acquisition
  • Air Force
  • Computer Programming
  • Computers
  • Contractors
  • Contracts
  • Cost Analysis
  • Cost Models
  • Cost Reductions
  • Department Of Defense
  • Engineering
  • Inertial Navigation
  • Logistics
  • Maintenance
  • Risk Analysis
  • Test And Evaluation
  • Verification Tests

Readers

  • Life Cycle Cost Analysis
  • Organizational Psychology.
  • Systems Analysis and Design