Hedging Uncertainty with Real Options: A Case Study in Technical Data Acquisition
Abstract
This research will be led by Christopher Prather, ANSER. This research seeks to address a long-standing problem that is directly relevant to the traditional acquisition areas of contracting, program management, and logistics. A new concept called “Acquiring Technical Data with Renewable Real Options” was proposed in 2016. The concept called for a government subscription to the contractor’s technical data package at the time a need arises. It identified contracting issues that would need to be addressed in acquisition and sustainment, recent technology trends that present opportunities for a new acquisition approach for technical data, and the potential for cost avoidance in situations where future needs are uncertain. A real options business case analysis tool was developed to support valuation of priced options for the government and to support determination of the optimal timing for if and when to exercise the options, based on current and projected needs. This effort will investigate a case study where the entire technical data package was acquired in order to quantify the benefits of owning the technical data, as well as to examine the applicability of a real options approach where the technical data would be purchased only at the time of need. Comparing these approaches will contribute to current initiatives to manage technical data rights and deliverables more effectively. The expected outcome will provide program managers with a case example of best practices for implementation, an evaluation of the benefits as viewed by both government and contractor, and a validated business case analysis tool.
Document Details
- Document Type
- DoD Grant Award
- Publication Date
- Mar 30, 2017
- Source ID
- N002441710019
Entities
People
- Christopher Prather
Organizations
- ANSER
- United States Navy