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...ts aresnegligible, the organization of economic activity is irrelevant, since any advantagessone mode of organization appears to hold over another will simply be eliminated byscostless contracting.” (=-=Williamson, 1979-=-, p. 233) Thus, it is important to understandsand capture transaction costs in order to increase the DoD’s procurementseffectiveness and avoid costs.sIn a later article, Williamson explained transacti...

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...li= corporate procurement strategy formulation for purchased products and material”s(Rendon, 2005, p. 7).sFigure 7 illustrates Kraljic’s purchasing model.sFigure 7. Kraljic Purchasing Model Approachs(=-=Kraljic, 1983-=-, p. 111)sA GAO report published in April 2005 detailed the market characteristics ofsthe Type 90 family of batteries.sPrior to 2002, Saft manufactured all the BA-5590sbatteries for the DoD.sIn late 2...

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...y type have decreased since 1996, to date no studies havesattempted to apply fully burdened costs to batteries.sA. Batteries as a CommoditysBatteries are similar to fuel in that they are a commodity (=-=Rendon, 2005-=-).sHowever, in order to appreciate the FBCB, one must understand a critical differencesbetween how the DoD acquires batteries and how it acquires fuel.sAs the solesacquirer and provider of fuel to all...

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...plescontracts with the same company.sFor companies with multiplescontracts, the Air Force is paying (through higher prices) for thescontractor’s repetitive bidding and contract administration costs.s(=-=Moore et al., 2004-=- p. ix)s Many purchase-office codes are associated with the same contractor.sBuyers indirectly pay each contractor’s administrative and marketingscosts associated with selling its services to more th...

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...nces of irregular warfare, wherein our enemies will findschoice targets in the large logistics train, or “tail,” rather than face the “tooth” of ourscombat forces (CNA, 2009; DSB, 2001; Eggers, 2008; =-=Lengyel, 2007-=-).sWarnings about securing our logistics trains, and the energy they provide tosour combat systems, proved prescient when, in 2006, the commander of MultiNational Forces-West (MNF-W), MajGen Zilmer (C...

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...g., petroleum-based) fuel demands will decreaseswhile stored energy demands will increase.sDuring fiscal years 2000 through 2008, the Department of Defense spent overs$66 billion on delivered energy (=-=Andrews, 2009-=-, p. 2).sLess than 1% of that amount,sjust under $600 million in FY 2000 dollars, was used for the purchase of batteries.1sAlthough comparatively small when compared to total fuel purchases, $600 mill...

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...Urgents= = ^Åèìáëáíáçå=oÉëÉ~êÅÜ=mêçÖê~ã= do^ar^qb=p`elli=lc=_rpfkbpp=C=mr_if`=mlif`v= = - 3 -sk^s^i=mlpqdo^ar^qb=p`elli= UNS to further emphasize why the DoD needs to rethink its valuation of energys(=-=Dipetto, 2008-=-).sThe Government Accountability Office (GAO) was asked to discuss the DoD’ssefforts to manage and reduce its mobility energy demand and found that “high fuelsrequirements on the battlefield can place...

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...umber of instances of irregular warfare, wherein our enemies will findschoice targets in the large logistics train, or “tail,” rather than face the “tooth” of ourscombat forces (CNA, 2009; DSB, 2001; =-=Eggers, 2008-=-; Lengyel, 2007).sWarnings about securing our logistics trains, and the energy they provide tosour combat systems, proved prescient when, in 2006, the commander of MultiNational Forces-West (MNF-W), M...

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...ion ProjectsIn 2006, the Army Sustain the Mission Project (SMP) developed asmethodology for calculating the FBCF resources to sustain Army missions instheaters of operation and at the training base. (=-=Eady, et al., 2006-=-)sIn 2008, SMPIIsdeveloped a user-friendly alpha-decision support tool in fiscal year (FY) 2008 forscalculating the FBCF using the SMP methodology and for evaluating energystechnology investments (Sie...

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...iunipero & Patterson, 2009).sStrategic purchasing includes the idea of “strategic sourcing, […] however, itsalso emphasizes the ability of purchasing to align with and influence enterprisesstrategy” (=-=Hudgens, 2008-=-).sIn a 2005 memo, the Office of Management and Budgets(OMB) defined strategic sourcing as “the collaborative and structured process ofscritically analyzing an organization’s spending and using this i...

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...odologysAt the 2009 DoD Cost Analysis Seminar (DODCAS), the ODASA–CEspresented the first attempt to quantify the FBCF in the Analysis of Alternative (AoA)sprocess based on the OUSD(AT&L) methodology (=-=Hull & Roper, 2009-=-). ThesODASA–CE has taken the lead for generating a FBCF methodology and publishingsfactors for Army-wide use in the acquisitions process.sThe ODASA–CE plans tosdevelop FBCF methodology to incorporate...

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...lli= 2. Scenario 2 (Operational, OCONUS)sFigure 11. Operational (OCONUS) ScenariosThe operational scenario we chose to model is based on the Marine EnergysAssessment Team (MEAT) visit to Afghanistan (=-=Moore et al., 2009-=-).sThe MEATsteam performed an energy use for USMC forces operating in Helmand Province ofsAfghanistan in September 2009.sWe chose this scenario because it is also the basesscenario that was used by Co...

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...006)sIn 2008, SMPIIsdeveloped a user-friendly alpha-decision support tool in fiscal year (FY) 2008 forscalculating the FBCF using the SMP methodology and for evaluating energystechnology investments (=-=Siegel et al., 2008-=-).sThese studies give realistic numberssto what it truly costs to provide fuel to a Stryker Brigade Combat Team (SBCT) in asbase case scenario in Iraq or in an undeveloped theater.sSMP allows planners...

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...Fort Lewis’s (Western United States)sDepartments of Public Works Environmental Divisions, which quoted a price ofs$1.28 per pound for battery disposal (Fort Stewart) and $2.25 per pound (Fort Lewis)s(=-=Brown, 2010-=-). Battery disposal cost will depend on the locality of the post doing thesdisposal (CE5c). The variance between disposal costs is primarily due to the distancesthe post is from the disposal facility ...

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...ividual services purchased batteries during this time period.sThis analysis includes purchases to be to a FOB destination. This means thesshipping costs were built into the unit price of the battery (=-=Gietter, 2010-=-).sDLA’sspublished unit price, or the price that it charges units, can be found in the ArmysMaterial Data File (AMDF).sAs the analysis will show, this price is significantlyshigher than the unit price...

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... (Brown, 2010). These quoted costs include thescost of transporting the batteries (which is CE5b) from the post to the disposal facilitysbecause the contractor transports the batteries for disposal. (=-=Kane, 2010-=-) For CostsElement CE5a storage before disposal costs, we used the unit storage CostsElement amount because the storage would be with the unit until the battery issdelivered to the post’s environmenta...

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...y to incorporate into the AoAs for the Ground CombatsVehicle (GCV), Joint Light Tactical Vehicle (JLTV) and Armed Aerial Scout (AAS)sMDAPS.s3. US Navy FBCF EffortssNaval Sea Systems Command (NAVSEA) (=-=Kearns, 2009-=-) used thesUSD(AT&L) methodology for calculating FBCF and applied it to Navy shipsapplications.sThese results were also presented at the 2009 Department of DefensesCost Analysis Symposium (DODCAS).sFB...

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...m Karachi to the logistics base. We came up with ascost of between $.18 and $.31 cents per battery for this movement, depending onsthe commercial transportation company used for the freight movement (=-=Sitts, 2010-=-).sThe cost to move the batteries from Karachi to the Battalion-sized Marine Corps unitscomprises the Tactical Delivery Charge for our burden analysis.s= = ^Åèìáëáíáçå=oÉëÉ~êÅÜ=mêçÖê~ã= do^ar^qb=p`ell...

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...king on a contract and not necessarily agencyswide.sWithin this view, Elliot Yoder defined transaction costs as the quantitativesvalue of touch time required to create, solicit, and award a contract (=-=Yoder, 2006-=-).sYoder went on to expand this definition as follows:s Contract actions using large Simplified Acquisition Procedures (SAP)sprotocol—as outlined in Federal Acquisition Regulation (FAR) Parts13—use a...