Comparison of the Basket Method and the Stratified Random Sampling for Contract Change Order Negotiations

摘要

This study compares two methods of statistical sampling for application in a contracting context. The methods are compared with the intent of demonstrating the superiority of one method over the other in assisting price analysts and contract negotiators in expediting processing of proposals for change orders while maintaining acceptable levels of risk. The Basket Method and Stratified Random Sampling techniques are examined to determine which method allows a more accurate estimate of a proposal population to be made. The several populations used in the simulation have errors planted to represent both random honest mistakes and weighted dishonest mistakes. The author concludes that the Basket Method has a more desirable accuracy pattern than the Stratified Random Sampling Technique.