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Keep the Process Natural: Forced Competitions Don’t Fit Defense Market

Indefinite delivery/indefinite quantity (IDIQ) contracts with multiple winners, such as the Defense Logistics Agency’s Tailored Logistics Support Program and the Navy’s Sea Port-Enhanced, can ensure competition based on both quality and cost at the task order level.

But there are other cases where the rigid pursuit of competition has led to higher costs and poor outcomes. Studies by the Rand Corp. and the Center for Strategic and Budgetary Assessments have concluded there are many instances, such as when nonrecurring investments are large, in which competition can boost acquisition costs.

For example, the majority of studies concluded that competing production of engines for the new F-35 Joint Strike Fighter would not only require up to $4 billion in additional nonrecurring costs for a second source, but because the two engines would be different, additional billions in life cycle expenditures. The Pentagon decided that these costs would outweigh projected savings from splitting the engine buy between two providers.

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