Research Catalog

Title

Defense working capital fund pricing in the Defense Finance and Accounting Service : a useful, but limited, tool / Edward G. Keating, Ellen M. Pint, Christina Panis, Michael H. Powell, Sarah H. Bana.

Author

Keating, Edward G. (Edward Geoffrey), 1965-

Publication

Santa Monica, CA : RAND, [2015]

Items in the Library & Off-site

Holdings

Details

Additional Authors

• Pint, Ellen M. (Ellen Marie), 1960-
• Panis, Christina.
• Powell, Michael H.
• Bana, Sarah H.
• National Defense Research Institute (U.S.)

Description

xvii, 45 pages : illustrations; 25 cm

Summary

This report assesses the advantagess and disadvantages of continuing to fund the Defense Finance and Accounting Service (DFAS) using a Defense Working Capital Fund (DWCF) mechanism versus funding it through direct appropriations. Abetted by reduced prices made possible by using automated approaches, DFAS has successfully induced its clients to evolve toward less costly approaches for paying Department of Defense (DoD) contractors and personnel. DFAS has also implemented customer-specific pricing for several outputs, thereby rewarding customers who put fewer burdens on DFAS with reduced prices. However, under DoD policy, DFAS must set prices to recover its full costs of operations. As a result, its prices are almost certainly greater than the organization's marginal costs of performing services. This means that DFAS's costs do not fall commensurably with decreases in workload. Additionally, DWCF prices provide more incentives to DFAS customers than to DFAS itself. Customers are charged less when they adopt approaches that put less burden on DFAS. DFAS itself, however, remains a monopoly, so DWCF pricing, all by itself, does not provide any direct incentive for DFAS to reduce its costs. However, DFAS's constant dollar costs have fallen over time, even as overall DoD spending has increased. On balance, we do not recommend that DFAS return to being funded solely by direct appropriation. However, it may be beneficial to reform DFAS (and, more generally, DWCF) pricing to allow nonlinear approaches, such as quantity discounts and direct funding of fixed costs.

Subject

• United States. Defense Finance and Accounting Service
• Working capital > United States
• United States > Appropriations and expenditures
• United States > Accounting
• United States > Auditing

Genre/Form

Electronic books.

Note

• "RR-866-OSD"--Page 4 of cover.

Bibliography (note)

• Includes bibliographical references.

Processing Action (note)

• committed to retain

Contents

Introduction -- An Overview of DFAS Operations -- Insights from DFAS Cost-Workload Data -- Assessing DWCF Pricing in DFAS -- Conclusions and Recommendations -- Appendix: RAND Subject-Matter Expert Questions.

ISBN

• 9780833088697 (pbk. : alk. paper)
• 0833088696 (pbk. : alk. paper)

LCCN

^^2015003966

OCLC

904715409

Owning Institutions

Harvard Library