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Accession Number ADA585264
Title New Approaches to Defense Inflation and Discounting.
Publication Date 2013
Media Count 67p
Personal Author J. Dryden K. Connor
Abstract Department of Defense (DoD) cost analysts must have correct information to generate operations and maintenance (O&M) estimates to support effective decisionmaking. Uniquely positioned under the 2009 Weapon Systems Acquisition Reform Act (WSARA) to improve and support DoD cost analysis, the Office of Cost Assessment and Program Evaluation (CAPE) within the Office of the Secretary of Defense asked RAND to assess O&M costs associated with several ground vehicles. The RAND researchers perceived a related question that also needed to be addressed: How well are current inflation indices and discount rates serving DoD weapon-system program management today. Inflation indices and discount rates are necessary tools in DoD's acquisition process, as the final selection of a system is partially based on potential increases in sustainment costs (inflation) and the present value of future costs (discounting). This study assesses the accuracy of the inflation indices and the benefits of the policy guiding discounting and offers recommendations that may assist CAPE in supporting the work of weapon-system program cost analysts.
Keywords Abrams tank
Armored personnel carriers
Army master data file price
Bradley armored personnel carrier
Cost estimates
Cost inflation
Department of defense
Discount rates
Equal-weighted index
Geometric-mean inflation index
Inflation indices
Long range(Time)
Marshall-edgeworth inflation index
Military procurement
Operations and maintenance costs
Spare parts
Supply chain surcharges
Tanks(Combat vehicles)

Source Agency Non Paid ADAS
NTIS Subject Category 96 - Business & Economics
74E - Logistics, Military Facilities, & Supplies
79D - Combat Vehicles
Corporate Author Rand National Defense Research Inst., Santa Monica, CA.
Document Type Technical report
Title Note Research rept.
NTIS Issue Number 1403
Contract Number W74V8H-06-C-0002

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