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 used: 1) U.S. contractors, 2) U.S. materials and end products (sand,
gravel, and the like excluded), 3) U.S. Government-furnished materials and
equipment, 4) U.S. flag ocean surface and air carriers, 5) prefabricated
installations and structures manufactured in the U.S., and 6) competent
troop labor. Prepare estimates showing construction under the "Normal" and
"Planned" procedures as defined below:
Normal (Local): Those construction procedures that would normally be
used at a particular location if no efforts were made to suppress FEC.
Planned: Those construction procedures utilized at a particular
location to minimize FEC. The "Planned" procedure is recommended where for
every dollar increase in cost from "Normal" to "Planned" the result is a
$2.00 or greater decrease in FEC, except where country-to-country
agreements specifically establish construction procedures.
SAMPLES
NORMAL PROCEDURE
PLANNED PROCEDURE
CURRENT WORKING ESTIMATE (CWE)
$250,000
$325,000
U.S.
COST:
a)
U.S. Contractor
$
0
$
0
b)
U.S. Materials & End Products
$
0
$
0
c)
U.S. GFE/GFM
$ 60,000
$ 60,000
d)
U.S. Transportation
$ 5,000
$ 5,000
e)
U.S. Prefab Structures
$
0
$100,000
f)
U.S. Troop Labor
$
0
$ 40,000
Total:
$ 65,000
$205,000
FOREIGN EXCHANGE COST (FEC)
$185,000
$120,000
PLANNED PROCEDURE CWE NORMAL PROCEDURE CWE = $75,000 increase in cost from
"NORMAL".
NORMAL PROCEDURE FEC PLANNED PROCEDURE FEC = $65,000 decrease in FEC cost.
Recommendation is "NORMAL PROCEDURE" since for every dollar increase in cost from
"NORMAL" there isn't a $2 decrease in the FEC cost.
NORMAL PROCEDURE
PLANNED PROCEDURE
CURRENT WORKING ESTIMATE (CWE)
$250,000
$325,000
U.S.
COST:
a)
U.S. Contractor
$
0
$
0
b)
U.S. Materials & End Products
$
0
$ 65,000
c)
U.S. GFE/GFM
$ 60,000
$ 60,000
d)
U.S. Transportation
$ 5,000
$ 10,000
e)
U.S. Prefab Structures
$
0
$100,000
f)
U.S. Troop Labor
$
0
$ 60,000
Total:
$ 65,000
$295,000
FOREIGN EXCHANGE COST (FEC)
$185,000
$ 30,000
PLANNED PROCEDURE CWE NORMAL PROCEDURE CWE = $75,000 increase in cost from
"NORMAL".
NORMAL PROCEDURE FEC PLANNED PROCEDURE FEC = $155,000 decrease in FEC cost.
Recommendation is "PLANNED PROCEDURE" since for every dollar increase in cost from
"NORMAL" there is a $2 decrease in the FEC cost.
9-7
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