Identification Of Nasa Research And Development Programs Subject To Benefit-cost Analysis V. B-176104

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B-176104 1 (1972-06-15)

handle is hein.gao/gaobaagjo0001 and id is 1 raw text is:

COMPTROLLER GENERAL OF THE UNID ATE# I w
WASHINGTON, D.C. 20548 I

B-17610o4 June 15, 1972

Fro D-rUENT AVIPI' r LM096528
Dear Mr. Miller:

As the result of a series of meetings between our staffs, the
General Accounting Office undertook a study to identify those National
Aeronautics and Space Administration (NASA) programs susceptible to ?6
cost-benefit analysis. Your staff ex -r-sised primary interest in one
of-tw67basic types of cost-benefit analysis - that in which benefits
are measurable in terms of dollars. Your staff also expressed interest
in identifying NASA programs susceptible to the other basic type of
cost-benefit analysis -- that in which benefits are not measurable in
terms of dollars. In accordance with general usage, the latter type
will be referred to as cost-effectiveness analysis. As an introduction
we thought it might be useful to include a brief discussion of the uses
of these two types of cost-benefit analysis.

Cost-benefit analysis involving dollar-measurable benefits can
(1) facilitate direct comparison of costs with benefits to see thether
the benefits appear worth the costs, (2) assist in selecting from
alternatives having different objectives, or (3) assist in selecting
from alternatives having the same objective.

Cost-effectiveness analysis -- cost-benefit analysis in which
benefits are not measurable in dollar terms -- facilitates selection
of the most economical way of accomplishing a particular objective by
either (1) identifying the alternative providing the greatest benefit
for a particular cost or (2) identifying the least costly way of pro-
viding a particular benefit. Cost-effectiveness analysis can assist in
selecting from alternatives having the same objective.

We believe that, for practical purposes, only certain NASA programs
are susceptible to cost-benefit analysis involving dollar-measurable
benefits. On the other hand, we believe that all NASA programs are
susceptible to cost-effectiveness analysis.

We believe that cost-benefit analysis involving dollar-measurable
benefits should be performed only on those NASA programs producing
potential inputs to non-NASA activities (Government and/or non-Government)
that actually produce dollar-measurable benefits, such as agriculture,
transportation, and communication activities.