Tag Archives: Defense Industry

DoD Acquisition – To Compete or Not Compete: The Placebo of Competition

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Author: William J. Levenson

Commercial markets abound with examples of competitive forces providing reduced costs and increased innovation. However, the defense market is materially different from commercial markets in many ways, and thus does not respond in the same way to competition. This analysis examines a series of outcomes in both competitive and sole-source acquisition programs, using a statistical model that builds on a game theory framework developed by Todd Harrison, Center for Strategic and Budgetary Assessment. The results show that the Department of Defense may actually incur increased costs from competition. Competition in defense acquisition may not reduce costs, but may—like a placebo—create a powerful perception of cost control.

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Running With Scissors: Defense Budget Cuts and Potential Industry Responses

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Author: Bryan A. Riley

Nearly everyone can relate to the experience of seeing a dangerous sequence of events unfold. A well-intentioned action is followed by a subtle misstep. Add in a measure of unpredictability, and quickly the sequence starts to diverge. In these situations, a reasonable person mentally fast-forwards to anticipate the possible outcome. It is that quick mind’s eye picture that spurs action. It prompts intervention. Building on the analysis and recommendations presented in this article, the author makes the case that it is possible for both the U.S. Department of Defense and the U.S. defense industry to mitigate the dangerous downside risk of anticipated defense budget cuts.

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