Anderson School of Management Theses & Dissertations

Publication Date

5-28-1964

Abstract

Business enterprises have traditionally operated under fixed-price contracts where they have had the full responsibility for meeting competition in the market place, controlling their costs, and consequently achieving a profit. This policy was also employed in contractual relationships with the United States Government. The technological advances made in the last two decades in the equipment contemplated for the defense of our national security have increased the complexity of procurement by the Department of Defense to such an extent that it is difficult to estimate the costs of performance on a contract. Funds expended for defense equipment have shifted materially from the acquisition of goods to the procurement of services capable of developing equipment which will meet performance specifications. Those performance requirements often border on state-of-the-art development. The contracts which have been written to procure such performance equipment have been cost-plus-fixed-fee since they involve open-end work statements, a massive use of engineering changes, a lengthening of the procurement cycle, and a desire for reliability which make it very difficult to estimate the cost of the equipment very much in advance of the actual work.

Language

English

Document Type

Thesis

Degree Name

Master of Business Administration (MBA)

Level of Degree

Masters

Department Name

Anderson School of Management

First Committee Member

Perry T. Mori

Second Committee Member

Howard Vivian Finston

Third Committee Member

Rudyard Byron Goode

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