Purchasing Performance: A Public Versus Private Sector Comparison of Commodity Buying
Abstract
This dissertation tests the validity of the public's beliefs about the DoD by examining the efficiency of defense purchasing relative to the commercial sector. This research compares the purchases of identical commodities drawn from three sectors: electrical, engine, and software. The samples of purchases consist of more than 831,000 items purchased as part of 693 actual contracts or delivery orders. The main questions are: (1) What are the differences in buying performance between the commercial and DoD sectors, (2) What causes the differences, and (3) Is there systematic evidence to support the public's beliefs? The comparisons consider the price of a good, purchase quantity, relevant contextual information, and the DoD's direct buying costs. The findings are at variance with the conventional wisdom and much of the prior research. These findings, which are based on samples of purchases of identical commodities vastly larger than any sample in the literature, include the following evidence: (1) the DoD significantly outperforms the average commercial sector organization purchasing commodities in each of the sectors examined in this study and (2) that superior DoD buying performance holds even after considering DoD oversight costs.
Document Details
- Document Type
- Technical Report
- Publication Date
- Apr 14, 1998
- Accession Number
- ADA366641
Entities
People
- Joseph J. Besselman
Organizations
- Carnegie Mellon University