By Mark Lorell
A few analyses have lately been carried out in efforts to replace technical fee versions and price estimating relationships for fixed-wing strive against plane, particulary in mild of the various cost-saving measures which have been initiated over the last decade. This file specializes in aqguisition reform or the establishment of adjustments in govt acquisition procrsses or within the courting among the govt. and division of safeguard primes.
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Extra info for An Overview of Acquisition Reform Cost Savings Estimates
This page intentionally blank Chapter Two DoD REGULATORY AND OVERSIGHT COMPLIANCE COST PREMIUM INTRODUCTION The alleged DoD regulatory and oversight compliance cost premium was one of the first areas examined in detail and targeted for reform by AR advocates. It is therefore appropriate to begin our examination of claimed AR cost savings in this area. The DoD regulatory and oversight compliance cost premium refers to the additional costs that the DoD is alleged to pay contractors to cover the added cost of complying with the vast array of regulations and requirements imposed on contractors by the government.
SPI savings due to regulatory relief are difficult to identify and quantify. • The initial estimates of overall AR savings made in the 1995–1997 time frame are difficult to verify and are probably not very reliable. Most contractors estimated that the potential savings from reform of C&L’s top ten cost drivers are on the order of 4 to 6 percent, although some firms place the potential figure as high as 15 percent. Because of the implementation problems discussed below, one contractor insisted that the savings so far from trying to reform C&L’s top ten cost drivers were 1 to 2 percent at most, although this contractor accepted the estimated savings potential of 4 to 6 percent with full implementation.
In the late 1980s and early 1990s, a large number of studies conducted both inside and outside the government concluded that the maze of special government laws, regulations, reporting requirements, and policies imposed on contractors doing business with the government had created two serious problems. First, compliance with the laws and regulations by firms, combined with the extra cost of mandated government monitoring and oversight activities, had resulted in a significant cost premium added to items procured by the government.
An Overview of Acquisition Reform Cost Savings Estimates by Mark Lorell