The development of an estimate of the cost of Government performance of a commercial activity and comparing it to the cost of contract performance is called?

The development of an estimate of the cost of Government performance of a commercial activity and comparing it to the cost of contract performance is called?

• A. Cost Analysis
• B. Cost Benchmarking
• C. Cost Evaluation
• D. Cost Comparison

Answer: (D)

The main idea here is cost comparison: you estimate what it would cost the government to perform a commercial activity in-house and then compare that estimate to the cost of having it done under a contract. This direct comparison helps determine which option is more economical, guiding the decision on whether to perform the work internally or contract it out. Other terms are related but have different focuses. Cost analysis breaks down the components of costs to understand drivers and reasons behind them, not just a side-by-side comparison of two total costs. Cost benchmarking compares costs or performance against external standards or peers, not specifically the internal-versus-contractor choice. Cost evaluation is a broader assessment of value, including qualitative factors like risk and performance, rather than a straightforward cost-to-cost comparison.

The main idea here is cost comparison: you estimate what it would cost the government to perform a commercial activity in-house and then compare that estimate to the cost of having it done under a contract. This direct comparison helps determine which option is more economical, guiding the decision on whether to perform the work internally or contract it out.

Other terms are related but have different focuses. Cost analysis breaks down the components of costs to understand drivers and reasons behind them, not just a side-by-side comparison of two total costs. Cost benchmarking compares costs or performance against external standards or peers, not specifically the internal-versus-contractor choice. Cost evaluation is a broader assessment of value, including qualitative factors like risk and performance, rather than a straightforward cost-to-cost comparison.