Challenges in Defense Working Capital Fund Pricing Analysis of the Defense Finance and Accounting Service

by Keating, Edward G.; Gates, Susan M.; Paul, Christopher; Bower, Aimee; Pace, Jennifer E.

• ISBN13: 9780833033109
• ISBN10: 0833033107
• Format: Paperback
• Copyright: 2003-10-20
• Publisher: RAND Corporation

Summary

Examining the price structure of the Defense Finance and Accounting Service and its impact on customer demand, workload, and equity in pricing.

Table of Contents

Preface	iii
Figures	vii
Tables	ix
Summary	xi
Acknowledgments	xvii
Acronyms	xix
Introduction	1	(2)
Dfas Background	3	(4)
Dfas Organization	3	(1)
Dfas Services	3	(2)
Dfas Pricing	5	(2)
Prices Matter Most When Customers Have Some Choice	7	(10)
How Customer Behavior Might Vary Depending on Pricing	8	(4)
Changing the Quantity of Work Demanded	8	(1)
Changing Service Providers	8	(1)
Changing How Service Is Provided	9	(3)
Will EC Approaches Save DFAS and Its Customers Money in the Long Run?	12	(3)
The Burden Customers Place on DFAS	15	(1)
Summary	16	(1)
How Simple Prices Lead to Cross-Customer Subsidies	17	(6)
Expenditure Differences by Output and by Location	17	(1)
Computing Average Location-Specific Costs and Subsidization	18	(4)
Alternative Pricing Options	22	(1)
Why Dfas's Cost Structure Points to Nonlinear Pricing	23	(6)
Has Hourly Billing for Accounting Changed Dfas Behavior?	29	(16)
Defining ``Moral Hazard''	30	(1)
How Do Private-Sector Accountants Deal with The Moral Hazard Issue?	31	(3)
Testing for Moral Hazard	34	(3)
Data Analysis	37	(6)
Why Did DFAS Not Respond to the Moral Hazard?	43	(2)
Conclusions	45	(4)
Pricing and Billing Policies: Findings by Chapter	45	(1)
Further Reform of DFAS Pricing Policies	46	(3)
References	49