Newsgroups: bit.listserv.buslib-l
Date:         Tue, 8 Sep 1992 14:20:22 EDT
              <BUSLIB-L@IDBSU.BITNET>
From:         jhunt@DHVX20.CSUDH.EDU
Subject:      RE: accounting info?

Barbara:  With a solid background in the professional and academic
worlds of business, I believe that I can assert with some assurance
that the terms "events accounting" or "events-based accounting" are
not a part of the standard accounting lexicon.

     There are certain "events" which require special treatment in
accounting but they are almost infinite in number and type.  They
typically involve one-time, non-recurring expenditures or write-
offs.  "Golden handshake" and golden parachute" payments might be
examples of this type event. Write-offs for discontinued operations
would be another example.

     I wonder, though, if your patron means "event-based
procurement" or "event-based contracting" instead of accounting.
Those terms, which are synonymous, are in fairly common use.  If
you ever have taken a management course which involves PERT or CPM
planning, you have an idea of what "events" are within this
context.  They can also be thought of as milestones.  Increasingly,
the U.S. Government, in particular, is reluctant to pay for major
procurement projects in anything other than event-based increments.
In other words, if you are building an aircraft, a payment will be
made when the design and specifications have been produced to
satisfaction (an event), when the hydraulic assembly has been
manufactured and tested satisfactorily (another event), etc.

     Quoted below are excerpts from a couple of articles which
discuss this concept.  I hope that this will be of some help to
you.

Regards - Jim Hunt, Director of Reference Services, California
State University, Dominguez Hills, 800 East Victoria Street,
Carson, CA 90747

                 1990 Aerospace Daily, June 25, 1990

     ".....pressure from a number of other things, people assumed
away an awful lot of risk. I think that anybody in a responsible
engineering position in hindsight would now say that some of the
things that were done under that aegis were probably not correct."

          Achieving Milestones

     Still, "that's where we are, and that's where I'm spending
most of my time  these days."

     "One of the big issues that came about as a result of the
entire thrust for fixed price development and fixed price
contracting," Cann said, is "how do you get   gracefully from
research and development to production?" Milestone 3, for instance,
"is not a date. It's a process. It takes years sometimes to get
your project through that milestone, but the budget process doesn't
allow for that very elegantly."

                One problem is low rate initial production (LRIP).
At the beginning of full scale development, Cann said, a contractor
is "asked to come up with fixed price options. It's pretty hard to
come up with fixed price options on something you haven't
developed."

     And, "as the development process gets more difficult, you get
deeper and deeper into the LRIP issue (which) says, 'I don't want
to do more than about 15% of the production before (I can get)
everything all straightened out.' And we're finding it's
increasingly difficult to work that problem."

     Cann also said "we're clearly going to work at reducing
concurrency" between development and production. "First of all, the
perception of the need, in terms of how bad we need things, is
certainly changing. I'm not here to even suggest what the timelines
ought to be at this point, but it's clear that we're going to
go much more into what (Pentagon acquisition chief) John Betti
likes to call event-based contracting, " which means that "before
we go Point B, we're going to finish Point A. We're not going to
keep working towards Point A and get into Points B and C at the
same time."

     "I didn't say there won't be any concurrency," Cann said later
in response to a question. Shipbuilding, for instance, "requires
concurrency because you can't get around it. But what it doesn't
require is that you compound risk. Therefore, the main issue that
we've been working diligently on is to make sure that the systems
that we put on ships (have) the risk taken out of them before
we insert them." The DDG-51 ship, he said, is "the best example of
the low risk  environment."

                              Defense Electronics

                                                      October,1989

SECTION: BUSINESS NEWS; Pg. 36

HEADLINE: Air Force Buys More C-17s from McDonnell Douglas

     As part of a plan by the U.S. Air Force to modernize the
current Military Airlift Command fleet, it has ordered four more
C-17 transport planes from Douglas Aircraft Co., Long Beach,
Calif., a division of McDonnell Douglas Corp., at a total cost of
$ 691 million.  The Air Force has now ordered six of a planned
total of 210 C-17s to be purchased by the year 2000. The most
recently  announced purchase is part of an  event-based contracting
plan between McDonnell Douglas and the Air Force.  Before each of
the production items is placed under contract, McDonnell Douglas
must meet a pre-arranged deadline or pass a critical component
review.  Prior to this most recent order, McDonnell Douglas
over-saw the completion of a successful critical design review of
mission computer software made by subcontractor Delco Electronics,
Goleta, Calif., a division of General Motors Corp.  Six more C-17s
will be purchased from McDonnell Douglas pending the completion of
the first C-17 during the middle of 1990.  The C-17 is designed to
carry large U.S. Army and Marine Corps equipment, troops and cargo
to overseas battle areas.  The first C-17 is scheduled to be
delivered in 1991, with the first squadron entering service in
1992.
Comments: Gated by NETNEWS@AUVM.AMERICAN.EDU