Working capital fund pricing policies: lessons from Defense finance and accounting service expenditure and workload data
By: Keating, Edward G.
Contributor(s): Gates, Susan M.
Material type:
ArticlePublisher: 2002Description: p.73-81.Subject(s): Defence | Prices
In:
Public Administration ReviewSummary: This article analyzes how service-providing government agencies should set the prices they charge to other governmental customers. Current Defense Working Capital Fund (DWCF) rules generally prescribe use of expected average cost transfer pricing. However, analysis of the Defense Finance and Accounting Service (DFAS), as an example, suggests DFAS has considerable fixed costs. These fixed costs are problematic under present DWCF pricing rules. If customer demand levels fall short of expectations, DFAS customers more appropriate incentives with respect to how much workload to give DFAS (versus trying to do it themselves or turning it over to contractors). We hypothesize that insights from DFAS may be applicable to other governmental working capital fund entities as well. - Reproduced.
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Articles
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Indian Institute of Public Administration | Volume no: 62, Issue no: 1 | Available | AR53510 |
This article analyzes how service-providing government agencies should set the prices they charge to other governmental customers. Current Defense Working Capital Fund (DWCF) rules generally prescribe use of expected average cost transfer pricing. However, analysis of the Defense Finance and Accounting Service (DFAS), as an example, suggests DFAS has considerable fixed costs. These fixed costs are problematic under present DWCF pricing rules. If customer demand levels fall short of expectations, DFAS customers more appropriate incentives with respect to how much workload to give DFAS (versus trying to do it themselves or turning it over to contractors). We hypothesize that insights from DFAS may be applicable to other governmental working capital fund entities as well. - Reproduced.
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