Analysis of the Cost of Late Contractor Delivery

Abstract

This study examined the costs of late vendor delivery for items managed at the Defense General Supply Center (DGSC). The study addresses the direct costs of late delivery which includes the labor and material expended in the attempt to resolve the situation, and the indirect costs which include the maintenance of increased safety levels of material because of increased lead times. The cost of a typical late delivery to DGSC has been quantified by this analysis to be approximately $11 in labor and materials used to expedite delivery, and $314 in increased safety levels and maintenance costs. These costs of late delivery represent approximately six percent of the typical replenishment contract cost. The report suggests two possible applications of these cost factors - one during the bid evaluation process and the other to assess liquidated damages.

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Document Details

Document Type
Technical Report
Publication Date
Sep 01, 1987
Accession Number
ADA189086

Entities

People

  • Kurt F. Schwarz

Organizations

  • Defense Logistics Agency

Tags

DTIC Thesaurus Topics

  • Business Administration
  • Computations
  • Contract Administration
  • Contractors
  • Contracts
  • Cost Estimates
  • Costs
  • Decision Support Systems
  • Economic Analysis
  • Indirect Costs
  • Lead Time
  • Logistics
  • Maintenance
  • Management Personnel
  • Operations Research
  • Personnel Management
  • Replenishment

Readers

  • Government Contracting/Procurement.
  • Industrial Economics
  • Life Cycle Cost Analysis