437 Javier Pastor Sánchez Life Cycle Cost Estimation Procedure for a Weapon... behaviours that are far-removed from conditions of perfect competition and this has an adverse impact on companies and defence ministries. When this situation arises whereby there is almost no or no competition for external contracts for the systems to be purchased, there is a lack of references allowing the price of a contract entered into, or which is in the process of being entered into, to be deemed the right price.7 This is thus when we most need help to reproduce the price that would be set in a market without these imperfections. In such atypical cases, the measurement of performance in order to reach a price is no mean feat. Consequently, advanced analysis techniques are required in order to reproduce the procurement price that would arise in a perfect market. Price formation in these imperfect markets and those with partial balance is studied as part of Industrial Economics. This field analyses the interdependencies of companies within these markets and studies the conditions of these markets, the behaviour of companies and economic results. In order to correct these imbalances, Industrial Economics recommends that the state develop economic regulation, promote protection of competition policy and exercise industrial policy to boost the competitiveness of the sector. The implementation of industrial policy and the promotion of antitrust policy fall beyond the scope of this article. Meanwhile, concerning the economic regulation it pursues with a view to preventing such inefficiencies, the state’s role is to establish a fair pricing policy for both parties that balances out these inequalities. Our regulator addresses this policy in two standards: 1. In order to regulate costs, among other measures, the Spanish Ministry of Defence (MINISDEF) introduced standards regarding the criteria applicable to costing for certain supply, consultant and service contracts for the Ministry of Defence (NODECOS).8 With regard to the profit involved, a formula is being developed to determine the percentages to be applied depending on a range of factors such as the type of contract, the industrial sector, the level of risk etc. 2. Another standard has been issued in order to implement NODECOS: “Procedure for the Provision of Cost and Price Analysis Services within the Ministry of Defence”,9 which provides the Cost Evaluation Group (Grupo de 7 ARIAS F, PASTOR J. La determinación del precio en ausencia de mercado Price Determination with an Absence of Market, Madrid, La Ley. Revista Practica. Year 9 No. 89. 2009. p. 7. 8 SPAIN. MINISDEF. Ministerial Decree 283/1998, of 15 October. NODECOS “Normas sobre los criterios a emplear en el cálculo de costes en determinados contratos de suministros, consultoría y servicios del Ministerio de Defensa” (Standards for the criteria applicable to costing for certain supply, consultant and service contracts for the Ministry of Defence). BOD of 21 October 1998, no. 212/98 p. 35408. 9 SPAIN. MINISDEF. SEDEF Instruction 128/2007, of 16 October, “Procedimiento para la http://revista.ieee.es/index.php/ieee
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