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- Title
TECHNICAL Data Packages: When Can They Reduce Costs for the Department of Defense?
- Authors
Ross, Nicholas J.
- Abstract
This article presents an economic model analyzing the impact of research and development (R & D) costs, production costs, and quantity requirements on the price of a Technical Development Package (TDP). It compares payoffs in a game involving a duopoly of defense firms and the government to analyze potential cost savings to the government by purchasing a TDP. It concludes that the price of a TDP depends primarily on rival firms' R&D as well as production costs. The government is most likely to achieve cost savings in the case where a rival firm has lower production costs, but would lose a competitive bid without a TDP. However, a TDP does not automatically lead to competition-based savings. The author then discusses the implications of relaxing key assumptions of the model.
- Subjects
UNITED States; APPROPRIATIONS &; expenditures of the United States Dept. of Defense; COST control; COST effectiveness; DEFENSE procurement; GOVERNMENT purchasing
- Publication
Defense Acquisition Research Journal: A Publication of the Defense Acquisition University, 2015, Vol 22, Issue 4, p450
- ISSN
2156-8391
- Publication type
Article