Foreign military sales pricing principles for electronic technical manuals

Abstract

DOD Instruction 7000.14-R, paragraph 0716, prescribes the methods that will be used to determine the price of DOD publications when they are sold to foreign military sales (FMS) customers. The Instruction includes publication pricing factors that shall be included in the development of FMS prices for paper publications. When technical data was maintained and distributed primarily by paper form, pricing the product to recover the associated costs was a relatively reasonable and reliable process. As we transition from paper to electronic data encompassed in various media and arrangements, the costs associated with this migration will differ considerably. As electronic storage and presentation of digital data becomes more interactive with the internet, the association between the existing practices and advanced products become more contradictory. The historical pricing procedures will no longer reflect the costs that need to be recovered. In this era of digital data and computerized integration, new technological advances have increased the demand and cost of services associated with digitization of paper documents. With the introduction of these new technologies, various fees associated with this transformation have to be incorporated into the pricing structure that currently exists. The problem that exists with the incorporation of these fees is the lack of long-term historical data due to relative infancy of the goods and services linked to this technology. The primary objective of this project is to determine accurate and justifiable pricing for the foreign military sale of electronic technical manuals under the guiding principles of DOD Instruction 7000.14-R.