Analysis of the costs for processing a claim at the Naval Air Systems Command
Warfield, Bobby J.
Stone, Mark W.
John E. Mutty.
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This thesis examines the claims resolution process and procedures and determines the costs associated with the processing of a claim at the Naval Air Systems Command (NAVAIR). With these costs identified, once a contractor entitlement has been determined, it will be possible to perform a cost-benefit analysis to determine if it would be cheaper to settle a claim up front or to continue with the claims resolution process. Data were obtained from surveys, telephone conversations, and literature. The research also identified patterns in the amount of time it takes to settle a claim. The most significant finding was that 92 percent of the total claim cases settled since 1996 were settled for less than the contractor's requested amount including the cost of processing the claim. Therefore, it makes good business sense for NAVAIR to continue with their claims resolution process. The findings also indicate that 57 percent of the total active NAVAIR claims that are either in litigation or not in litigation are associated with lapsed appropriations. In that these claims must be payed with current year funding, any improvements to the claims process that will lessen the time to final resolution will have a positive effect on current year program stability.
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