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  • design-to-cost

    Management concept that historically emphasized cost-effective design (minimizing cost while achieving performance) and targeting an Average Unit Procurement Cost (AUPC). DTC concentrated on the contractors' activities associated with tracking/controlling costs and performing cost-performance analyses/tradeoffs. Cost as an Independent Variable (CAIV) has refocused DTC to consider cost objectives for the total life cycle of the program and to view CAIV with the understanding it may be necessary to trade off performance to stay within cost objectives and constraints. DTC now is those explicit design actions undertaken to meet cost objectives. Contractual implementation of DTC should go beyond simply incentivizing the contractor to meet cost commitments—it should also incentivize the contractor to seek out additional cost reduction opportunities.

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