A Method for Analyzing Competitive, Dual Source Production Programs

Abstract

During the past several years, program managers and cost analysts within the Department of Defense have been asked frequently to consider the cost effectiveness of dual source, competitive procurement strategies. The most common solution to this problem, which we will call the traditional approach, requires difficult assumptions about the behavior of the second source during the competitive program. This paper will present an alternate approach which avoids these difficult assumptions concerning the second source. This alternative approach has been used by the Office of the Secretary of Defense (OSD) Cost Analysis Improvement Group (CAIG) for independent studies of dual sourcing. This paper will describe the rationale for the Break-even approach and the method for implementing it. The break-even approach develops a structure for deciding if competition is likely to be successful or not without estimating the cost of productivity, by the second competitor.

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Document Details

Document Type
Technical Report
Publication Date
Jan 01, 1985
Accession Number
ADA161820

Entities

People

  • James L. Wilson
  • Milton A. Margolis
  • Raymond G. Bonesteele

Organizations

  • Office of the Secretary of Defense

Tags

Communities of Interest

  • C4I
  • Materials and Manufacturing Processes
  • Weapons Technologies

DTIC Thesaurus Topics

  • Competition
  • Contractors
  • Cost Analysis
  • Cost Effectiveness
  • Costs
  • Department Of Defense
  • Engineering
  • Equations
  • Governments
  • Investments
  • Manufacturing
  • Procurement
  • Production
  • Production Rate
  • Technology Transfer
  • Test Equipment
  • Weapon Systems

Readers

  • Economics
  • Life Cycle Cost Analysis