I assume that you are less interested i n the technical ramifications
of the subject i t s e l f than you are in what it means for Government
policy--what it means for those who supply the needs of the
Government through contracts.
is part of the broader subject of increased defense spending and the
Federal budget problem as a whole.
You are interested because the subject
Government procurement t h i s year, to speak i n general terms, is
approaching a 60 b i l l i o n dollar business.
the t o t a l Government procurement budget for supplies, materials,
and equipment amounts to more than 57 b i l l i o n dollars.
86 percent of t h i s amount is for national defense.
DOD's procurement t h i s year amounts to over 49 b i l l i o n dollars.
For f i s c a l vear 1970
Approximately
This means that
J - .
/-' An understandable concern of the Congress is whether procurement
.2
/' dollars are being spent e f f i c i e n t l y , whether the lowest cost contractor
gets the contract, and whether the p r o f i t s allowed are reasonable.
c
Only about 11 percent of defense procurement is carried out through
the formally advertised competitive contract, and t h i s is down from
about 14 percent 5 years ago.
about 40 b i l l i o n dollars--is carried out in the form of negotiated,
noncompetitive procurements.
from a single source.
The 89 percent remainder--representing
More than one half of these are
A majority of these negotiated procurements are noncompetitive
and are priced on t h e b a s i s of cost information available to the
Government which, obviously, must be derived from the accounting data
of contractors. Since contractors' cost accounting standards d i f f e r
widely, they are not presently comparable. How, then, can the Government
be assured as to the v a l i d i t y and equity of the costs allowed?
This was the question posed by Vice Admiral H. G. Rickover,
Deputy Commander for Nuclear Propulsion, Naval Ship Systems Command,
who t e s t i f i e d in hearings before the House Banking and Currency
Committee on the extension of the Defense Production Act last year.
H i s testimony that there were no uniform accounting standards for
determining costs largely provided the impetus f o r the l e g i s l a t i o n
directing the General Accounting Office to undertake the study which
is the subject of our discussion t h i s evening.
Many of the examples of the r e s u l t s of t h i s lack of uniformity
used by Admiral Rickover in his testimony were drawn from General
Accounting Office reports. These reports emphasized inconsistencies
-2-
in the applfcation of the Armed Services Procurement Regulation (ASPR)
to the detriment of the Government.
Admiral Rickover has recently summarized his point succinctly
in a letter to me as follows:
"In the absence of true competition, the Government
must rely on contractor cost estimates and cost records
in pricing its contracts. However, under today's procurement
rules, it is virtually impossible to discover what
it costs to manufacture defense equipment and what profit
industry makes in producing it--unless months are spent
reconstructing suppliers ' books.
repeatedly face the Hobson's choice of delaying important
work to analyze thoroughly and negotiate costs or placing
the contract without understanding fully the basis for
the price."
Government officials
PROBLEM OF DIVERSITY
We all know that the diversity of accounting practice in use
today throughout business, finance, and industry is based on the
diversity of products and services sold or provided. This diversftv
is based also on management preferences, historical tradition, and
indeed philosophical disagreement among accountants and financial
managers. These differences in viewpoints are deep-seated. The
professional accounting organizations for many years have attempted
to bring about greater uniformity or consistency in accounting
practices. Their success has been limited.
In fact, no group in industry, or in the accounting profession,
both of whom have a vital fnterest in equitable contractor costing
practices, has rhus far been able, or has seen fit, to develop a
set of specific standards to be followed which can be understood and
-3-
can be relied upon.
to see whether it is feasible to apply uniform standards--or to have
greater uniformity i n standards-in one sector of the economy at
least, that of defense procurement.
It is now the turn of the Federal Government
i- z ,
The new law became effective July 1, 1968. It directed the
/ Comptroller General, in cooperation with the Secretary of Defense
I . r and the Director of the Bureau of the Budget, to "undertake a study
to determine the f e a s i b i l i t y of applying uniform cost accounting
standards to he used in a l l negotiated prime contract and subcontract
defense procurements of $100,000 or more."
This is GAO's charter for the f e a s i b i l i t y study.
In keeping with the provisions of the l a w , we formed a coordinating
conunittee in the Government composed of representatives of GAO, the
Department of Defense, and the Bureau of the Budget.
Next--as the l a w also provided--we began consultations with
representatives of i n d u s t r i a l and professional associations.
advice and counsel has been essential and important to our study
and t h e i r cooperation has been gratifying.
EXAMPLES OF CONTRACTOR DEVIATIONS
Their
One of the f i r s t steps we took was to request the Defense Contract
I Audit Agency (DCAA)--the agency that audits DOD contracts--to provide
us with examples from its audit reports of how contractors have
deviated from t h e i r consistent accounting practices i n defense
v ' ' -
-4-
contract cost proposals or have treated cost incurred inconsistently
with practices i n t h e i r commercial business.
The deviations fromP and inconsistencies in, defense contractors'
accounting methods were shown by DCAA to be i n the following areas:
--allocation of indirect expenses,
--classification of costs between d i r e c t
and indirect, and L
--election of whether costs' should be
capitalized or charged to expense.
The DCAA provided us with more than 50 examples from a u d i t r e p o r t s
issued since June 1968.
cost should be allocated are by f a r the most numerous in the DCAA
portfolio.
differently, but they frequently do so i n a predictable manner. This
problem relates to incurred and proposed costs and can be subdivided
into two parts: direct vs. indirect, and the bases of allocation
of indirect costs.
Cases concerning the question of how a given
Not only do contractors allocate costs of a similar nature
Here are two DCAA examples in the area of incurred costs, showing
d i f f i c u l t i e s encountered by Government procurement officers because
of the lack of uniform standards of accounting for costs.
A contractor incurred rearrangement c o s t s t o t a l i n g $234,000
for expanding its production f a c i l i t i e s , necessitated bp two new
contracts. The contractor, however, charged $132,000 of the costs
to certain contracts which had been completed before the incurrence
of the costs and which had not benefited from the rearrangement.
-5-
In addition to the obvious impropriety of charging costs to contracts
which received no benefit, this procedure was contrary to the contractor's
written policy.
In the second case a contractor charged to overhead as "rental
of building services'' fees of $276,000 for architectural and engineering
services for the construction and alteration of various facilities.
The treatment of the fees was not consistent with that for other
costs of the facilities in question which had been capitalized as
leasehold improvements. The cost was clearly of a capital nature
and should have been capitalized.
In case after case, instances were noted where a contractor
identified various direct costs in submitting proposals for fixed-price
contracts while at the same time including costs of a similar nature
identifiable to other work of the contractor in overhead and allocating
a portion thereof to the proposed contract.
Where a cost is allocated directly to a contract, costs of a
similar nature should be deleted from overall pools when submitting
proposals. In short, a contractor should not ask, or be permitted,
to "have it both ways."
Another problem arises when contractors deviate from their
existing cost-reporting and accumulation practices in presenting
cost proposals.
allocating costs, for purposes of submitting cost proposals, in a manner
different from the way they ultimately record costs for cost performance.
There are many recorded instances of contractors
-6-
. . .. .,
In one case, a contractor normally used one plant wide overhead
rate for its commercial work. However, in submitting a proposal for
a fixed-price contract with the Government, the contractor proposed
a series of overhead rates by different product lines.
indicated that it did not intend to change its accounting system to
record costs in the manner proposed. More importantly, although
it had been proposing overhead on the product-line basis for 3 or 4
years, the contractor had made no attempt to maintain even an informal
record that would reflect the actual costs by product lines.
The contractor
Inconsistencies and deviations such as these take on, as I have
suggested, various forms, but they usually have two characteristics
in common--(l) Government contracts are burdened too frequently with
excessive charges and (2) it is difficult for Government negotiators
to compare costs of contractors that are canable of performing the
work desired.
Obviously, the question of narrowing the areas of difference
and inconsistency continues to be a controversial one. Some hold
that diversity in accounting among independent business entities is
a basic fact OP life.
troversial is that the word "uniform" does not convey a precise
concept and certainly not a C W ~ ~ OunRd erstanding.
GAO'S DEFINITIONS OF ACCOUNTING TERMS
And one of the reasons the subject is con-
-- -I-__L^-
Because accounting terminology is not universallp understood,
it seemed necessary that the term "cost accounting standards" and
-7-
the term "uniform"--which are included in the basic law 1 quoted
earlier-be defined.
the following definitions:
For the purposes of our study, we have adopted
-C-o st Accounting Standards
Cost accounting standards embrace the related principles,
standards, and general rules of procedures and the criteria
for their usage.
"Cost principles" suggest self-evident truths and axioms
which have a degree of universality and permanence and
which underlie, or are fundamental to, the derivation of
cost accounting standards.
"Cost accounting standards" relate to assertions which
guide or point toward accounting procedures or applicable
governing rules. Cost accounting standards are not the
same as standardized or uniform cost accounting which
suggests prescribed procedures from which there is limited
freedom to depart.
Since the legislative history suggested Section XV of ASPR
as a possible satisfactory starting point and Section XV
includes many general rules of procedures, the term "cost
accounting standards" is considered to include ai2 three
concepts; namely, principles, standards, and general rules
of procedure.
Uniform Cost Accounting Standards
Cost accounting standards shall be deemed to be unjiform
when seated with the goal of achieving comparability,
reliability, and consistency of significant cost data
in similar circumstances and with due regard to the
attainment of reasonable fairness to all parties
concerned in such circumstances.
Accordingly, our approach has been to see whether it is possible
to provide greater uniformity and consistency in cost accounting
princfples and standards used in presenting cost proposals and the
-8-
accumulation of costs for Government contracts. We are not considering--
nor did the Congress intend that we consider--uniform cost accountfng
systems. I think we could also point out that we have approached the
problem on the assumption that there may be room for alternative
standards to be applied in accordance with specified criteria.
We have held innumerable conferences with organizations and
individuals concerned from indrlstry, accounting, universities, and
Government. We sought their attitudes and opinions conceaing the
entire problem of adopting "uniform cost accounting standards"
through the use of a questionnaire. Some of you may now be familiar
with the questionnaire. The responses to it from business, industry,
and others are fundamental to our study.
PURPOSE AND DEVELOPMENT OF GAOlQU-E STIONNAIRE
The questionnaire is best understood as a tool for obtaining
reliable, first-hand information necessary in deciding the feasibility
of establishing uniform cost accounting standards. The questions
we asked were designed for the specific objectives of the study.
The questionnaire requested opinions and invited suggestions
from representatives of companies as to propositions or statements
which guide them in their cost accounting practices. Such propositions,
if existing, would be helpful in the development of uniform cost
accounting standards for a l l defense contracts.
The questionnaire had other purposes. It provided a means of
obtaining substantial amounts of factual information regarding cost
accounting practices followed in industry generally.
-9-
A decision made early in the development of the questionnaire
was that it should be designed to be answered by contracting units
rather than by companies.
in some cases divisions of corporations, and in some cases a portion
In some cases these are corporations,
of a large corporative group.
Rather than attempt to get a single questionnaire response
from a contracting company or family of companies, the decision
was made to seek answers from those people most likely to be
working directly with Government contracts. Thus, the questionnaire
would be answered by those best informed on the problem of accounting
for Government contracts--usually the chief accounting officers
of units contracting with the Government.
This method had the further advantage of providing information
on the variety of practices followed by Contracting units and on the
extent of similarity and dissimilarity in their accounting problems.
Responses received bear out the wisdom of this decision.
-D- ISTRIBIJTION OF QUESTIONNAIRE
The basis of distribution of the questionnaire was a Department
of Defense listing of companies awarded negotiated contracts in
fiscal year 1968. All. contractors receiving contract awards of
100 million dollars or more were sent questionnaires. An average
of 12 percent of all contractors receiving awards between $100,000
and $10 million, selected on a sampling basis, were sent queszlonnaires.
Contractors representative of every program in the Department of
Defense list were included.
-10-
We included companies other than Government contractors in the
questionnaire sample because we wanted to obtain some indication of
the extent to which that part of industry having no Government contract
business has developed uniform cost accounting standards. In additfon,
any company which indicated it wished to receive a questionnaire
was sent one. Its response was tabulated along with the others.
To provide confidentiality for all responses and to relieve
those to whom questionnaires were sent of any feeling of Government
pressure, questionnaires were returned when completed to an independent
research staff at the University of Illinois headed by Professor
Robert K. Mautz for processing, interpretation, and a report
thereon, I will have more to say about this in a moment.
Classification of returned questionnaires hy size of company,
type of activity, and experience with Government contracts indicates
that returns are satisfactorily representative.
as follows:
These returns were
Companies with Percent of
Contracts Issued 1968 Mailed Response Returns
Awards over $50 million 96 84 88
Awards $10 million to $50 million 330 266 81
50
1373 824 60
Awards under $10 million -947 -474 -
A great many people obviously gave generously of their time and
thought in responding to the questionnaire. question after question
11-
brought carefully considered, well-expressed views. Any questionnaire
distributed broadly is subject to a fair amount of misinterpretation.
Certain respondents did read into individual questions points
which we had no intention of raising; for example, that the questionnaire
was developing a basis for cost accounting systems rather than
standards. Even in these cases, responses in general were restrained
and constructive.
line position opposing any effort to establish cost accounting
standards. Almost without exception, respondents found one or more
of the proposed cost accounting standards acceptable. Many noted
that certain ones were directly in accord with what they were now
doing.
Only in a few instances did respondents take a ‘nard-
There is of course an understandable fear that standards might
be imposed which could interfere with the develoDment of useful
management information andlor be used to the disadvantage of contractors
in negotiations with the Government.
Answers did indicate that clearly stated standards do.exist
for some areas and that €or others procedural or definitional rules
effectively provide control over cost determination.
reported the existence of procedural manuals which serve the purposes
of cost accounting standards within their companies.
Some companies
The existence of underlying ideas on which practices and defhitions
are based is strongly implied. In some instances, formulation of
these ideas into stated propositions approaches the nature of cost
accounting standards.
-12-
-PROCE SSING RESPONSES TO THE QUESTIONNAIRE
Early in the development of the questionnaire, consideration was
given to the most appropriate processing of questionnaire returns.
Should they be returned to the GAO? Would industry representatives
be willing to respond candidly and completely to a questionnaire
which was to be returned to Government representatives? Would the
results of the questionnaire study be looked upon as unbiased by all
concerned if they were received and interpreted by members of an
organization which might be considered to have some interest in the
establishment of uniform cost accounting standards?
We came to the conclusion that the responses should be
received, tabulated, and interpreted by an independent research
organization to which I referred a moment ago. Bv this method,
respondents could be assured of confidentiality in the handling of ehefr
answers to the several questions. Completed questionnaires were not
made available to members of the General Accounting Office staff or any
other Government representatives, in any wav. This procedure protected
the General Accounting Office from any charge of bias in interpretation
of the returned questionnaires.
The research staff consisted essentially of three members of the
academic staff of two universities--the University of Illinois and the
University of Minnesota.
respondents so that the questfonnaires could he mailed directly to
Professor Mautz at the University of Illinois. Upon receipt, the
Addressed envelopes were provided to
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i . . ". 1 .
outer cover of the questionnaire, which was the only page on which
designation of the respondent was called for, was removed.
use of a code number, the cover was identified with the remainder
of the questionnaire.
separately from the questionnaires and were available only t o the
three senior members of the research s t a f f .
Through
The identifying covers were then f f l e d
Next, the statistical content of the questionnaire responses
was transferred to machine-sensible coding sheets. This was a
clerical process, calling f o r no i n t e r p r e t a t i o n a n d ' i t required only
that due provisions be made f o r adequate supervision and review.
The machine-sensible coding sheets were then converted by electronic
data processing equipment into punched cards from which various
tabulations were prepared.
Once t h i s clerical operation was coninleted, every narrative
response was read by one or another of t h e s e n i o r members of the
research s t a f f . This required c a r e f u l i n t e r p r e t a t i o n of each
response, p a r t i c u l a r l y as they were seeking any clues which might
be found i n the answers indicating that companies had already established
guides which might properly be described as cost accounting
standards. Following review of t h e n a r r a t i v e answers, t h e research
s t a f f members discussed t h e i r conclusions and collaborated i n the
i n t e r p r e t a t i v e report t o GAO.
"ON THE RECORD" COMMEN-TS
- c
L J
, . t
. %
In addition to completing the questionnaire, we invited professional
and i n d u s t r i a l organizations and some Government procurement agencies t o
-14-
comment on various aspects of our study. Among other things, we
solicited their views specifically on the possibility of adopting
Section XV of the Armed Services Procurement Regulation--ASPR--as
a starting point for developing uniforni cost accounting standards.
We wanted their opinions as to the strengths, weaknesses, and
general suitability of Section XV as a starting point. Here are
some excerpts from replies received from four of the organizations.
These excerpts also shed some light on the attitude of these
organizations toward the more basic question of whether or not uniform
cost accounting standards are feasible for negotiated defense contracts.
The American Institute of Certified Public Accountants provided 3 fus
with a series of thoughtful statements as to the suitability of
Section XV as a starting point. These, developed bv its Committee
on National Defense, are too long to be qgoted here. The central
points of its statement seemed to us to be the following:
--Section XV is basically integrated with generallv
accepted accounting principles and cost accounting
used by industry.
--Section XV contains a good statement of allocability
concepts which have general applicability; it also
contaJns some allocation rules. In practice, there
are wide differences among contractors in how these
concepts and rules are applied.
--Various rules are established in Section XV in certain
selected cost areas where generally accepted accounting
principles may need to be narrowed or reviewed, such as
pension costs, depreciation, materi.al costs, intercompany
pricing, independent R&D, and bidding and proposal costs.
-15-
--Section XV contains pricing considerations which have
nothing to do with cost accounting. * * * (These) pricing
considerations need to be clearly differentiated from
cost accounting considerations.
--Section XV seems to offer a number of s u i t a b l e c o s t accounting
concepts for use in developing uniform cost accounting
standards. Finding swh good starting points and proceeding
with care, research and testing offer the best chance of
success in developing a good set of cost accounting standards.
--If the cost accounting elements of Section XV were to become
the core of uniform cost accounting standards, it is
possible t h a t s p e c i f i c guidelines could be developed which
would provide guidance hevond the general a l l o c a b i l i t y
c r i t e r i a and beyond generally accepted accounting principles.
PGAA (Federal Government Accountants Association j likewise provided ?
us with a statement much too long and i n t r i c a t e to be quoted here.
It was prepared by a special five-member AD HOC Committee. Its points
s a l i e n t to our review t h i s evening appeared to be these two, which I
am quoting:
--"This conmfttee has concluded, on the basis of its review
and collective experience, that a more definitive set of
uniform cost accounting standards than now contained i n the
FPR (Federal Procurement Regulation) or ASPR (Armed Services
' Procurement Regulation) is required to assure that proposals
received from responding sources are consistent accounting-
, wise.
--"The committee believes uniform cost accounting standards
for defense contracts are feasible and should be d e f i n i t i v e l y
formulated to provide the Governmerir with greater assurance
that cost data received from responding bidders and contractors
are comparable and r e f l e c t r e a l operating differences
rather than the use of different accounting principles and
practices. I'
AGCA (The Associated General Contractors of AmerL-2) said that ? !i-.''.!
statements on cost accounting principles should be limited to general
-16-
. .-
A , <. ,
policy that provides guidelines for the determination of those costs
which constitute d i r e c t and indirect charges and overhead or general
and administrative expense. AGCA said that "the purpose of Section XV
does not f u l f i l l t h i s application for the construction industry."
-SI A (Strategic Industries-Association) stated:
"Our position is that Section XV of the ASPR is not
a basis for the adoption of uniform cost accounting standards;
nor can we suggest, within the context of the immediate q1-iestion,
improvements in that section."
.-CODSIA (Council of Defen--s e a n d a a c e Indastrv Associations)
asked a task group representing eight industry associations and
member companies f o r t h e i r views concerning the use of Section XV as a
basis for development of uniform cost accounting standards. CODFIA
told us that some task group members and t h e i r companies f e l t that
certain paragraphs of ASPR XV already go as f a r as possible i n establishing
standards llheterogeneo1Js" for defense industrv. Others,
CODSIA said, ''have a strong conviction'' that ASPR XV cannot be used
as a basic document for establishment of standards, as that term was
defined and i l l u s t r a t e d by GAO.
MAP1 (Machinery and Allied-Products I n s t i t u t e ) replied that it
opposes the concept of uniform cost accounting standards and believes
t h a t l e g i s l a t i o n on the point is nefeher necessary nor desirable.
~FEI- _(F-in-an-c-ia-l -E xecutives- I n- .s-- t i t u t e ) , on the other hand, replied
i n part as follows:
"We believe t h a t c e r t a i n portions of Section XV when
separated from the rest of the Section and other Regulations
-17-
could, and i n our opinion should, be incorporated into
any body of cost accounting standards that might be
developed i f the (GAO) f e a s i b i l i t y study indicated
that t h i s would be desirable. * * *
"With f u l l industrv participation, it should be
possible to develop a set of cost accounting standards
that could be generally applied and used by industry."
In another part of its statement, FEI went on to sag that the
two definitions i n ASPR f o r d i r e c t costs and indirect costs could
be used as a s t a r t i n g point for the development of a set of cost
standards.
-C--H ALLENGE OF WRITIN_G-- ----S-- TANDARDS
Whether our study leads us to the conclusion that uniform cost
accounting standards are feasible, it is an understatement to say
tha.t it would be d i f f i c u l t eo write standards that would be acceptable
to evervone.
Any standards to be fully effeccive m u s t be workable and must
be generally acceptable.
Acceptability would depend chiefly on two factors.
One factor would be the a b i l i t v of those who write the standards
to communicate clearly the i n t e r e s t and purpose of those standards.
The other, factor would be the necessity to develop srandards
general enough to be applied i n diverse i n d u s t r i a l a c t i v i t i e s hiit
specific enough to achieve a greater degree of uniformity.
The most d i f f i c u l t problem is to write standards that would
achieve t h i s balance.
-18-
Standards must be stated i n terms general enough so that cont
r a c t o r s w i l l not find themselves i n "straightjackets ."
tractors must accept some d i s c i p l i n e i n t h e i r choice of cost
accounting practices.
Bot con-
L e t me give you an example.
A dollar of d i r e c t labor should mean the same thing to a l l
p a r t i e s required t o use the data.
that the dollar of d i r e c t labor reported includes only the actual
t i m e the laborer worked or t h a t it includes t h e a c t u a l t i n e worked
nata users should know e i t h e r
plus a l l normal nonproductive time, such as coffee breaks ana
downtime because of mechanical f a i l u r e s of machines. Data users
should a l s o know whether only t h e l a b o r e r ' s basic hourly wage is
included or whether t h e b a s i c hourly wage plus comnanv-paid frinRe
benefits are included.
Cost data has l i t t l e value to anyone if evervone uses d i f f e r e n t
ground rules i n its preparation.
We cannot claim that our f e a s i b i l i t y study thus f a r has given
us a precise "fix" as to how detailed or how general standards should
be written. Rut we have brought together a vast amount of information
and expert testimony bearing OR the problem.
-PROB-LEM OF DEPRECIATION
Before closing, I would l i k e to mention once more t h f s matter
of acceptability. General aceptance of a standard would c e r t a i n l y
e s t a b l i s h f e a s i b i l i t y of adaprion. But, as mentioned earlier, the
-19-
different and built-in objectives of the participating parties to
negotiated Government contracts create divergent views as to the
acceptability of a standard. We are, therefore, faced with a
fundamental question:
prerequisite?
Is general acceptance necessarily a
The Government is motivated to make the tax dollar buy as much
defense material as it reasonably can. Therefore, Government
o f f i c i a l s , in looking at depreciation as a d i s t r i b a t i o n of the
cost of a fixed asset over its economic tlseful l i f e , may, in a
given case, view the expiration of such useful l i f e as occurring
evenly over each year of the a s s e t ' s life--straight-line debreciation.
A contractor, on the other hand, being motivated to avoiding
as much r i s k as possible and to maintaining as strong a financial
position as he can, may favor accelerated depreciation as the most
appropriate of accounting alternatives.
why a contractor might p r e f e r t h e use of an accelerated method
of depreciation: Speaking broadly, it generates a greater immediate
cash flow as a r e s u l t of reduced income tax payments.
There is another reason
It is clear therefore why financial managers are motivated to
seek the highest depreciation r a t e s allowable under current income
tax regulations. It is also clear why the same financial managers
would seek high depreciation r a t e s , when product price negotiations
are based upon estimated costs or where estimated costs are a t
least a predominant factor. This is management's prerogative.
-20-
On the other hand, it is more than the prerogative--it is the
lawful duty--of Government contract negotiation officials to determine
that cost data offered in support of negotiated contracts reflect
actual costs. Where prices are based upon or are influenced by
production costs--that is, where cost data becomes a "standard"
for pricing--the cost data should represent true costs as accurately
as possible.
Under conditions where there are opposing economic interests,
it seems apparent that acceptability cannot be an essential criterion
for judging feasibility.
CONCLUSION
All that we have been discussing boils down, essentially, to
this: Government procurement officers should know what an article
costs with some assurance that the costs have been determined according
to uniform criteria, consistently applied.