Challenges in Defense Working Capital Fund Pricing: Analysis of the Defense Finance and Accounting Service
RAND NATIONAL DEFENSE RESEARCH INST SANTA MONICA CA
Pagination or Media Count:
The Defense Finance and Accounting Service DFAS provides finance services such as paying military members, government-employed civilians, and contractors and accounting services such as tabulation and analysis of customer obligations and expenditures to Department of Defense DoD customers This report examines the DFAS pricing structure and its impact on customer incentives and behavior. We believe the DFAS pricing structure is important on two levels. First, with approximately 2 billion in expenditures per year, DFAS itself is a sizable portion of the DoD infrastructure Second, we believe the pricing issues that DFAS confronts are similar to those faced by other Defense Working Capital Fund DWCF organizations, including the Defense Logistics Agency DLA, the Defense information Systems Agency DISA, the Defense Commissary Agency DeCA, and the military services depot systems. Analysis of DFASs pricing issues might therefore provide insights into the pricing structures of DoD working capital fund organizations in general Like other DWCF organizations, DFAS covers its expenditures by charging customers for its services DFAS charges per work unit e.g., per account paid for its finance services and charges by the hour for its accounting services. Hourly rates for accounting services vary by customer finance fees generally do not Various finance products represented about half of the DFAS regions fiscal year 2001 FY01 expenditures, accounting represented about 40 percent of the regions expenditures, and information services represented about 10 percent.
- Economics and Cost Analysis
- Personnel Management and Labor Relations
- Military Forces and Organizations