The Resource Government Contracting: Compensation of Defense Contractors' Working Capital Financing Costs

Government Contracting: Compensation of Defense Contractors' Working Capital Financing Costs

Label
Government Contracting: Compensation of Defense Contractors' Working Capital Financing Costs
Title
Government Contracting: Compensation of Defense Contractors' Working Capital Financing Costs
Contributor
Subject
Language
eng
Summary
DOD'S profit policy includes a provision to recognize the millions of dollars defense contractors incur annually in financing working capital costs on fixed-price contracts. Working capital costs consist of the contractor's work in process costs-material, labor, and overhead that are not financed through progress payments' or other payments. In negotiating contract prices, DOD does not attempt to prepare an exact calculation of such costs, but instead tries to give general recognition to the contractor's working capital costs under varying contract circumstances, financing policies, and economic environments. If DOD'S policy does not appropriately consider a contractor's working capital financing costs, it could affect contract profits, either to the contractor's or the government's disadvantage. DOD'S policy generally recognizes the important factors that affect contractors' working capital financing costs. Our analysis of a sample of contracts showed that in the aggregate the policy resulted in approximately the right amount of these financing costs being included in the profit objective. That is, the costs likely to be incurred during the life of the contract were close to the amounts estimated by DOD. While this was true in the aggregate, there were differences of 10 percent or more in most of the individual contracts between DOD'S estimate and our estimate of working capital costs. On individual contracts, therefore, if contracting officers do not adjust for the specific circumstances of that contract, too much or too little profit could be included in the contract price
Cataloging source
DTICE
Index
no index present
Literary form
non fiction
http://library.link/vocab/relatedWorkOrContributorName
GENERAL ACCOUNTING OFFICE WASHINGTON DC NATIONAL SECURITY AND INTERNATIONAL A FFAIRS DIV
http://library.link/vocab/subjectName
  • Financial management
  • Contractors
  • Compensation
  • Department of defense
  • Policies
  • United states government
  • Environments
  • Contracts
  • Economics
  • Costs
  • Salaries
  • Recognition
  • Labor
  • Profits
  • Tractors
  • Administration and Management
  • Economics and Cost Analysis
Label
Government Contracting: Compensation of Defense Contractors' Working Capital Financing Costs
Instantiates
Publication
Note
Report to the Chairman, Subcommittee on Defense, Committee on Appropriations, U.S. Senate
Carrier category
online resource
Carrier category code
cr
Carrier MARC source
rdacarrier
Content category
text
Content type code
txt
Content type MARC source
rdacontent
Extent
30 pages
Form of item
online
Governing access note
APPROVED FOR PUBLIC RELEASE
Media category
computer
Media MARC source
rdamedia
Media type code
c
Note
Hein Online
System control number
  • (OCoLC)227828059
  • (OCoLC)ocn227828059
Label
Government Contracting: Compensation of Defense Contractors' Working Capital Financing Costs
Publication
Note
Report to the Chairman, Subcommittee on Defense, Committee on Appropriations, U.S. Senate
Carrier category
online resource
Carrier category code
cr
Carrier MARC source
rdacarrier
Content category
text
Content type code
txt
Content type MARC source
rdacontent
Extent
30 pages
Form of item
online
Governing access note
APPROVED FOR PUBLIC RELEASE
Media category
computer
Media MARC source
rdamedia
Media type code
c
Note
Hein Online
System control number
  • (OCoLC)227828059
  • (OCoLC)ocn227828059

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