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.
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