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Analysis
The Effects of Competition on Defense Acquisitions
As defense acquisition costs have soared over the past decade, efforts at reforming the acquisition system have focused intensely on creating more opportunities for competition as a means to reduce costs and incentivize better contractor performance. While competition can, in some cases, reduce costs and improve contractor performance, it is not a cure-all for the problems that plague defense acquisitions. This paper presents a quantitative approach, using game theory to model the effects of competition on contractor pricing. It demonstrates that the way in which a competition is structured can be a determining factor in whether competitive pressure is sufficient to balance the additional development costs of multiple contractors and higher unit costs from splitting the award. Specifically, the way contractors are incentivized to bid (or not bid) depends on the number of rounds of competition, the number of units awarded in each round, and the split in award between the winner and loser for each round. The analysis reveals that in some instances the structure of the competition can actually incentivize contractors to bid higher and drive up costs.
Analysis
Can the Aging U.S. Air Force Modernize?
In an era of fiscal austerity, the investment decisions the U.S. military services make in the coming years must give others pause as they consider military competition or conflict with the United States. For the Air Force, this means preserving a highly credible capability to strike any targets anywhere on the globe while recapitalizing its aging inventory of combat aircraft.
Analysis
U.S. Defense and the 2012 Presidential Election
Following the Republican and Democratic national conventions, the fall electoral season kicks into high gear. Among the many issues being debated are those focused on U.S. defense: How would the presidential candidates shape America’s future armed forces? Where do they agree and where do they disagree? Which broader realities, both within their control and beyond it, will affect their decisions on these matters?
Analysis
How Big Should the Defense Budget Be?
Use reasoned judgment, not artificial measures. Using a percentage of G.D.P. or past spending levels would set the budget with little regard for what is needed or what we can afford.
Analysis
Economist Debate: China’s Military
The weight of evidence leads to the conclusion that China’s military expansion is undermining the regional stability that has produced an era of peace and unparalleled prosperity. China’s actions speak far louder than its words.
Analysis
The Laser Future Of U.S. Missile Defense
Russia and China recognize the low-cost efficiency of lasers. Does the Pentagon?