An Overview of Acquisition Reform Cost Savings Estimates by Mark Lorell

By Mark Lorell

A couple of analyses have lately been carried out in efforts to replace technical rate types and value estimating relationships for fixed-wing wrestle airplane, particulary in gentle of the varied cost-saving measures which have been initiated over the last decade. This file makes a speciality of aqguisition reform or the establishment of alterations in govt acquisition procrsses or within the courting among the govt and division of safety primes.

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Extra info for An Overview of Acquisition Reform Cost Savings Estimates

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As discussed above, the purpose of this report is to survey the range of estimates available from both published sources and interviews with industry and government sources, to categorize these claims, and to make some initial assessments of the robustness of the estimates. Since the issuance of former Secretary Perry’s initial documents on AR, the DoD, the service executives, Congress, and various other sources have produced many AR measures, initiatives, and policy guidance documents. An array of new AR policies, terminologies, and acronyms has also emerged since Secretary Perry’s original pronouncements.

6 See Coopers & Lybrand/TASC, The DoD Regulatory Cost Premium: A Quantitative Assessment, December 1994. 16 An Overview of Acquisition Reform Cost Savings Estimates tematically collected database. Second, although it tended to be on the lower end of the spectrum of earlier studies of the DoD cost premium as discussed above, the C&L study seemed to show that significant savings were still potentially achievable through reductions in DoD regulation and oversight. This is particularly true because C&L explicitly excluded any savings that might result from greater use of commercial technologies, processes, and parts.

For example, the Office of Technology Assessment estimated a potential cost savings of 10 to 50 percent in the total DoD acquisition budget, while another study conducted by the American Defense Preparedness Association calculated that product costs for the DoD could be reduced by 30 to 50 percent. Yet at roughly the same time, a more rigorous and considerably more conservative study conducted by RAND suggested that potential savings in terms of total program costs were in the range of only 5 to 10 percent.

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