Competition in the Weapons Acquisition Process: The Case of U.S. Warplanes

Abstract

Consistent with the recent national trend to dismantle or limit the scope of regulatory agencies and controls, the military services are taking increasing advantage of competition to secure low, realistic prices and costs, as well as improved performance and reliability, for weapons and replacement parts. Using the purchase of combat aircraft and related systems as examples, this article assesses the effects of market structure on competition. Although competition can be effective, the unusual incentives flowing from interservice rivalry and the parochial interests of individual legislators often allow contractors to underbid or “buy in” on early development and production contracts and to “get well” on later contracts. Expanding the role of competition within the present institutional framework holds the potential for some improvement in the procurement process. More fundamental change is necessary to alter the role of Congress and eliminate the influence of undesirable rivalry among the services.