Escalation provisions for Navy contracts issues and choices
By: by Michael G. Sovereign and Carl R. Jones
Contributors: Jones, Carl R.; Naval Postgraduate School (U.S.)
Publisher: Naval Postgraduate School
Published: 1975
Place of publication: Monterey, Calif
Language: eng
Number of pages: 51
Subjects: Defense contracts; Escalator clause; United States; Procurement; Inflation (Finance); United States. Navy
Description: This paper begins with the identification and exposition of the four major issues involved in escalation for Navy contracts.  These issues are: why is the change in input prices a particular problem for Navy contracts?  Why is escalation a good procedure for dealing with the problem?  What are the possible side effects of using escalation procedures?  How is the trade-off between administrative cost, accuracy and contractor incentives (moral hazard) reached?  For each separate issue as well as for the set of interrelated issues a discussion indicating its general applicability as well as its specific applicability to individual case is given.  After the issues discussion the area of implementation of escalation is considered as a series of four questions: What prices should be covered?  How should the price changes be measured?  When should the measurements be made? How should the price changes be compensated?  These questions are given general answers in each case and the set of questions as a whole is also considered. (Author)
Notes: Title from cover.

"Prepared for: Chief of Naval Research, Arlington, Virginia 22217"--Cover.

"May 1975"--Cover.

"NPS-55Zo75051"--Cover.

Author(s) subject terms: Inflation, escalation, price index, contingency price, shipbuilding cost, aircraft cost, contract provisions.

Includes bibliographical references (p. 47)

"Approved for public release; distribution unlimited"--Cover.

Technical report; 1975.