Recent Changes in the Defense Department's Profit Policy--Intended Results Not Achieved
PSAD-79-38
Published: Mar 08, 1979. Publicly Released: Mar 08, 1979.
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Highlights
As the result of a study on the profitability of defense contractors, a profit and pricing policy for most negotiated production-type contracts became effective on October 1, 1976. To encourage greater investment, the Department of Defense (DOD) allowed the imputed cost of capital for facility investment on most negotiated defense contracts and recognized the level of facility investment in establishing a profit objective for use in negotiating a profit rate with contractors.
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Topics
Cost accounting standards complianceCost effectiveness analysisDefense cost controlDefense industryDefense procurementDepartment of Defense contractorsExcess profitsIndustrial facilitiesProduction engineeringProfits