Cost Savings from Multiyear Contracting,
Abstract
Two multilayer contracts are reviewed to determine the savings that are being realized over the cost of annual contracting for the same work; one is an Army contract with the Sikorsky Aircraft Division of United Technologies Corporation for the UH-60A BLACK HAWK helicopters and the other an Air Force contract with the General Dynamics Corporation for the F-16 multimission fighter aicraft. Significant cost savings are being realized on both programs. The broadening of multiyear contracting to include requirements of all services for the same end items for spares, support equipment, and foreign military sales offers an opportunity to achieve even more cost savings than under the current contracting approach. The criteria for multiyear contracting, which include significant cost savings, stability of requirements and configuration, and confidence in contractor cost performance and capability, are found to be appropriate but vague. After several years of cost experience are accumulated, multiyear contract costs should be compared with those for prior annual contracts for the same systems in order to validate savings and to determine the extent to which engineering and requirements changes reduce them. At that time, the criterion for stability of requirements and configuration should be tightened. Keywords: Contract management, Major system acquisition management, Cost estimating and analysis, and Acquisition management.
Document Details
- Document Type
- Technical Report
- Publication Date
- Oct 01, 1984
- Accession Number
- ADA153564
Entities
People
- J. S. Domin
Organizations
- LMI