IMPROVING THE PRICE EFFICIENCY OF U.S. AIR FORCE BASE OPERATING SUPPORT SERVICE CONTRACTS

Abstract

The U.S. Air Force spends approximately $6 billion per year on installation services under Base Operating Support (BOS) contracts. For many installations, BOS contracts represent a sizable portion of the annual base Operations and Maintenance (O&M) budget and contain service critical to peacetime and wartime missions. However, the Air Force enterprise lacks a standardized approach toward acquiring these services; service clusters differ across installations, as do acquisition strategies. Implementation of a uniform process would allow prices to be minimized while maximizing the services received and purchasing power held. This research paper conducts a regression and hierarchical cluster analysis that analyzes the commonalities and cost drivers within Air Force BOS contracts. The results of the analysis conclude that the price-per-month of BOS contracts decrease as contract duration increases, leading to the recommendation of securing longer BOS contract duration terms. This research paper gains better understanding of factors influencing BOS contract pricing that will allow the U.S. Air Force to improve acquisition strategy, capitalize on supplier economies of scale and scope, improve competition, and increase socioeconomic participation.