Sangam: A Confluence of Knowledge Streams

Cost Recovery in Commercial Item Contracts

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dc.contributor Acquisition Research Program
dc.contributor Naval Postgraduate School (U.S.)
dc.creator Tharp, Greg
dc.date 05/10/21
dc.date 2021-11-02T05:13:44Z
dc.date 2021-11-02T05:13:44Z
dc.date 2021-05-10
dc.date.accessioned 2022-05-19T07:32:41Z
dc.date.available 2022-05-19T07:32:41Z
dc.identifier 134
dc.identifier http://hdl.handle.net/10945/68173
dc.identifier SYM-AM-21-110
dc.identifier.uri http://localhost:8080/xmlui/handle/CUHPOERS/100031
dc.description Purpose: For uniformity, present value methodologies and clauses are needed. Design: Based on a review of literature, FASB Concept Statement No. 7, and the FAR; a way to calculate present value of commercial item contracts is identified as well as present value clauses. Findings: Commercial items involving an uncertain degree of risk and dynamic costs use a fuzzy net cash flow methodology, forming basis of net present value, to calculate cash flow in order account for risk and changing costs. Clauses should be inserted into commercial item contracts to allow for greater clarity as to how present value is calculated with certainty. Practical Implications: No method to calculate the present value of recovery of cost of work performed prior to termination in commercial contracts exists. Present value clauses and methods are consistent with the intention of framers of the FAR. Originality/Value: Due to lack of a current methodology to calculate the present value of commercial item contracts, FASB Concept Statement No. 7, present value, and fuzzy net cash flow are used to calculate present value of commercial items.
dc.description Prepared for the Naval Postgraduate School, Monterey, CA 93943.
dc.description Naval Postgraduate School
dc.description Approved for public release; distribution is unlimited.
dc.description Approved for public release; distribution is unlimited.
dc.format application/pdf
dc.publisher Monterey, California. Naval Postgraduate School
dc.rights This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.
dc.title Cost Recovery in Commercial Item Contracts
dc.type Presentation


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