In Pursuit of Best Value: Comparing Air Force Contract Prices with Local Governments

Abstract

The Department of Defense (DoD) budgets approximately $25 billion every year on contracts for base operations support (BOS) services across 160 active-duty military installations in the United States. DoD bases procure standard BOS services such as grounds maintenance, custodial services, facilities maintenance, and waste disposal, just to name a few. With an ever-decreasing procurement budget, the DoD must ensure that each tax dollar obligated on contracts provides the best value to the government and its citizens. The DoD's greatest challenge in ensuring best value is the determination of fair and reasonable prices in all of its contracts for supplies and services. One approach for determining fair and reasonable prices is comparing prices paid with other DoD agencies as well as with other government agencies. Our research focuses on prices paid for a common BOS service: solid waste disposal. Specifically, we compare the prices paid per ton (i.e., average cost) on solid waste disposal services across (a) Air Force bases and (b) across Air Force bases and their neighboring cities. We focus on solid waste disposal because it is a uniform BOS category across bases, and prices paid can be readily compared to neighboring cities that also contract for waste disposal. Although we focus on Air Force bases because the data are readily available, our results have implications for other military bases and DoD agencies.