The Contracting Education Academy

Contracting Academy Logo
  • Home
  • Training & Education
  • Services
  • Contact Us
You are here: Home / Government Contracting News / Analyst: It’s a myth that market competition drives down weapons cost

October 26, 2012 By AMK

Analyst: It’s a myth that market competition drives down weapons cost

Critics of Pentagon waste point to the uncompetitive defense industry — dominated by a handful of conglomerates — as the reason why the U.S. military overpays for weapons. If only there were a truly competitive, free, market, prices would come down, experts have argued.

Reality often trumps that theory, however. Some of the most hair-raising Pentagon acquisition programs — Future Combat Systems, Expeditionary Fighting Vehicle, Joint Strike Fighter come to mind — were competitively awarded after lengthy evaluations and technology trials. Yet, these programs today are held up as poster children for Pentagon acquisitions gone awry.

A respected defense budget analyst now offers a numbers-based hypothesis for why competition in military acquisitions is overhyped as a cure-all for the chronic cost overruns in Pentagon weapon systems.

“While competition has an intuitive appeal as a way to drive down costs in defense acquisitions, this is not always the case,” says Todd Harrison, a senior analyst at the Center for Strategic and Budgetary Assessments, a nonpartisan Washington, D.C., think tank.

“Competition can, under certain circumstances, drive up acquisition costs by incentivizing contractors to bid higher,” Harrison contends in a paper titled, “The Limits of Competition in Defense Acquisition,” published last month by the Defense Acquisition University.

Keep reading this article at http://www.nationaldefensemagazine.org/blog/Lists/Posts/Post.aspx?ID=935.

Filed Under: Government Contracting News Tagged With: competition, DAU, DoD, incentive, investment, weapons systems

Popular Topics

abuse acquisition reform acquisition strategy acquisition training acquisition workforce Air Force Army AT&L bid protest budget budget cuts competition cybersecurity DAU DFARS DHS DoD DOJ FAR fraud GAO Georgia Tech GSA GSA Schedule GSA Schedules IG industrial base information technology innovation IT Justice Dept. Navy NDAA OFPP OMB OTA Pentagon procurement reform protest SBA sequestration small business spending technology VA
Contracting Academy Logo
75 Fifth Street, NW, Suite 300
Atlanta, GA 30308
info@ContractingAcademy.gatech.edu
Phone: 404-894-6109
Fax: 404-410-6885

RSS Twitter

Search this Website

Copyright © 2023 · Georgia Tech - Enterprise Innovation Institute