The application of cost-benefit analysis in raising the noncompetitve small purchase threshold.

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Author
Howard, Robert Leo III.
Date
1987-09Advisor
Carrick, Paul M.
Second Reader
Smith, Raymond W.
Metadata
Show full item recordAbstract
The purpose of this thesis is to determine the economic
impact of a proposed acquisition policy change. As an
interim measure, a class deviation to the Federal
Acquisition Regulation was issued 4 June 1987. The change
increases the small purchase noncompetitive threshold from
$1,000 to $2,500 for a test period of one year. This
deviation was issued after the research commenced but before
this report was issued. The primary reason for this change
is to reduce the administrative cost associated with
obtaining competition. Consequently, the government should
be prepared to make a trade-off between the administrative
cost of competing and any savings realized from competition.
Using the data collected from two field activities, NAS
Point Mugu and NWC China Lake, an analysis was conducted to
determine the costs and benefits associated with increasing
this threshold. This research will focus on administrative
order costs, shortage costs, procurement administrative lead
time, and productivity of acquisition personnel.
This thesis will conclude with observations about the
noncompetitive threshold and make recommendations concerning
a policy change.
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This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.Collections
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