Make-or-Buy Programs

Defense contractors normally propose intra-company work as part of their make-or-buy programs. Purchases by a contractor from one of its divisions, subsidiaries, or affiliates may be classified in the make-or-buy program as either a "make" or "buy" depending on the circumstances. When reimbursement to the division, subsidiary, or affiliate is on a cost basis, the purchase is a make. When reimbursement is based on a competitive price, the purchase is a buy.