The applicability of should cost to the procurement process
Haight, Richard William
Zabrycki, Edward A.
Judson, Robert R.
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As major weapons systems become more complex, it becomes increasingly more difficult to accurately estimate the cost. Various costing techniques have been utilized in an attempt to accurately estimate the contract price of modern weapon systems with varying degrees of success. "Should cost" analysis has become increasingly more important, in the eyes of some, as the best approach in a noncompetitive procurement situation. Currently, the Army, the Air Force, the Navy and GAO all conduct "should cost" studies using various approaches. In this paper, an attempt is made to gain the feelings of Defense contractors concerning the application of government "should cost" analysis. The author of this paper has made several recommendations, based upon data available, concerning the limitations of and the application of "should cost" analysis.
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