An Analysis of the Potential Impacts of Ashton Carter's "Should-Cost" Memorandum on Defense Contracting

Abstract

Ashton Carter, Under Secretary of Defense for Acquisition, Technology, and Logistics (USD[AT&L]), and Robert F. Hale, Under Secretary of Defense (Comptroller/Chief Financial Officer), issued a Joint memorandum on April 22, 2011 titled "Joint Memorandum on Saving Related to "Should-Cost." As iterated in the memorandum, Dr. Carter's goal for the should-cost initiative is to ensure that program managers (PMs) drive productivity improvements into their programs during contract negotiations and throughout program execution and sustainment. This is achievable, according to Dr. Carter, if PMs continuously perform should-cost analyses that scrutinize every element of government and contractor cost. In addition to the Joint memorandum, Dr. Carter issued a second memorandum on April 22, 2011, for acquisition and logistics professionals, titled "Implementation of Will-Cost and Should-Cost Management." This guidance is applicable to all acquisition category (ACAT) I, II, and III programs. The purpose of this research is to examine the potential impacts this and related directives have on the contracting community's ability to request, acquire, audit, and utilize data germane to contract negotiations and management; examine whether there may be inherent potential conflicts with the commercial item acquisition provisions of Federal Acquisition Regulation (FAR) Part 12 and the contract pricing initiatives of FAR Part 15 to reduce reliance on the Truth in Negotiations Act (TINA) requirements for certified cost and pricing data and cost accounting standards (CAS); and explore strategies for implementing the directive effectively. Additionally, the research will determine the nature and extent of any potential impacts of the should-cost initiative on the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA).

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Document Details

Document Type
Technical Report
Publication Date
Sep 17, 2012
Accession Number
ADA570664

Entities

People

  • Elliott C. Yoder

Organizations

  • Naval Postgraduate School

Tags

Communities of Interest

  • C4I
  • Electronic Warfare
  • Energy and Power Technologies
  • Ground and Sea Platforms
  • Human Systems
  • Space
  • Weapons Technologies

DTIC Thesaurus Topics

  • Business Administration
  • Congress
  • Contingency Operations (Military)
  • Contractors
  • Contracts
  • Cost Analysis
  • Fighter Aircraft
  • Government Procurement
  • Governments
  • Law
  • Logistics
  • Management Personnel
  • Organizational Structure
  • Procurement
  • Supply Chain
  • Supply Chain Management
  • Test And Evaluation

Readers

  • Defense Acquisition Program Management
  • Government Contracting/Procurement.