Please use this identifier to cite or link to this item:
https://dair.nps.edu/handle/123456789/84
Title: | Using the Steel Vessel Material-cost Index to Mitigate Shipbuilder Risk |
Authors: | Edward G. Keating Robert Murphy John F. Schank John Birkler |
Keywords: | Fixed-Price Shipbuilding Contract Fixed-Price Incentive-Fee Shipbuilding Contract Labor-Cost Index Material-Cost Index |
Issue Date: | 1-Apr-2008 |
Publisher: | Acquisition Research Program |
Citation: | Published--Unlimited Distribution |
Series/Report no.: | Fixed-price NPS-AM-08-039 |
Abstract: | This paper describes how the US Navy structures fixed-price and fixed-price, incentive-fee shipbuilding contracts and how labor- and material-cost indexes can mitigate shipbuilder risk in either type of contract. The Navy frequently uses the Steel Vessel material-cost index, a Bureau of Labor Statistics-derived cost index based on the mix of materials in a typical commercial cargo ship constructed in the 1950s. The Steel Vessel Index has excessive weighting on iron and steel, thereby providing shipbuilders with a mismatch between their actual and the Index-assumed material-cost structure. We recommend the Navy use a material-cost index with more up-to-date weightings. |
Description: | Acquisition Management / Grant-funded Research |
URI: | https://dair.nps.edu/handle/123456789/84 |
Appears in Collections: | Annual Acquisition Research Symposium Proceedings & Presentations |
Files in This Item:
File | Size | Format | |
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NPS-AM-08-039.pdf | 142 kB | Adobe PDF | View/Open |
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