An examination of United States Navy leasing: lessons from the MPS/T -5 experience
Koenig, Richard W.
Mitchell, M. Scott
Haslam, Paul A.
Shank, John K.
San Miguel, Joseph G.
Summers, Donald E.
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This project analyzes the Navy's 1982 decision to lease thirteen T-AKX class Maritime Prepositioning Ships (MPS) and five Champion Class T-5 replacement tankers. It examines the MPS/T-5 history, a brief history of Navy ship leasing, and the MPS/T-5 acquisition process. In addition, it reviews the laws and regulations that were in place at the time of the lease and the cost comparison between the lease versus purchase decision. The examination concludes that while leasing the MPS/T-5 ships was more cost effective under 1982 laws and assumptions, many of these assumptions would no longer be used under current laws and regulations. Thus, from a purely monetary point of view, leasing would no longer be more cost effective than purchasing. However, leasing does provide three significant advantages that are not present in a traditional procurement. First, leasing allows the Government to pay as it uses an asset, which spreads the payments over an asset's useful life rather than completely paying for the asset when procured. Second, leasing allows the Government to bypass a lengthy procurement process, resulting in earlier asset utilization. Third, leasing allows the Government to obtain assets that would not have otherwise been procured due to budget constraints.
MBA Professional Report
Rights"Upon consultation with NPS faculty, the School has determined that this thesis may be released to the public and that its distribution is unlimited, effective January 25, 2011"--Cover.
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.
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