Prime Contractor Research Articles

A panel data regression model for defense merger and acquisition activity

PurposeThis paper examines the relationship between a prime contractor's financial health and its mergers and acquisitions (M&A) spending in the defense industry. It aims to provide models that give the United States Department of Defense (DoD) indications of future M&A activity, informing decision-makers and contributing to ensuring competitive markets that benefit the consumer.Design/methodology/approachThe study uses panel data regression models on 40 companies between 1985 and 2021. The company's financial health is assessed using industry-standard financial ratios (i.e. measures of profitability, efficiency, solvency and liquidity) while controlling for economic factors such as national productivity, defense budgets and firm size.FindingsThe results show a significant relationship between efficiency and M&A spending, indicating that companies with lower efficiency tend to spend more on M&As. However, there was no significant relationship between M&A spending and a company's profitability or solvency. These results were consistent with previous research and the study's hypotheses for profitability and solvency. However, the effect of liquidity was the opposite of the expected result, possibly due to the defense industry's different view on liquidity compared to previous research.Originality/valueThe paper provides insights into the relationship between a prime contractor's financial health and its M&A spending, a topic with limited research. The findings can inform policymakers and regulators on the industrial base's future M&A activity, ensuring competitive markets that benefit the consumer.

Offset Multipliers and Defence Industrial Policy Efficiency

ABSTRACT Mandatory offsets are policy instruments to leverage defence procurement projects to conduct industrial policy. The prime contractor commits to generate new business in mutually acceptable sectors equivalent to a large percentage of the project value. Offset multipliers “relax” this constraint by discounting the prime contractor’s offset obligations if investments flow to sectors prioritized by the purchasing country’s industrial policy objectives. This endogenizes the relationship between the original project and the offset contracts. This paper provides a new theoretical analysis of the following three questions that have gone unaddressed in the literature. First, the efficiency of such policies depends on the absorption capacity of a targeted industry. If this capacity is low, import substitution is expensive and the prime contractor may rather choose to invest elsewhere in the economy to satisfy the overall mandatory offset constraint thereby thwarting the original objective. Second, whereas a uniform relaxation of offsets through multipliers can reduce distortions introduced by mandated offsets, multipliers may enhance distortions as an unintended consequence. Third, the prime contractor’s response to offset credit incentives may be weak due to transaction costs arising from having to find new domestic partners to satisfy the offset requirements and manage the contracts.

Australian East-West Radio Relay System Revisited

The Journal revisits an historic paper from 1971 by R. W. Richards and J. Donovan of GEC-AEI Telecommunications on the prime contractor’s role in the delivery of the Australian East-West radio relay system from Northam in Western Australia to Port Pirie in South Australia.

Decoupling in hybrid arrangements: Insights from the Australian defence industry

AbstractThe Australian Industry Capability (AIC) program presents an example of hybridity where national security interests are served through a complex partnership between the Department of Defence, global prime contractors, and small and medium‐sized Australian companies. Through a qualitative interview study of stakeholders in the defence industry by and triangulating findings from publicly available defence industry documents, this study aims to document the decoupling associated with the AIC program. We find that complexity and opacity, stemming from hybridity, create decoupling in the implementation of the AIC program. We also find that a lack of accountability and monitoring contributes to decoupling. We advance the literature on hybridity into the context of multi‐organisational arrangements in a unique industry and identify how decoupling can impede the achievement of policy objectives in the context of complex hybrid arrangements.Points for practitioners The Australian Industry Capability (AIC) program represents a case of complex hybrid arrangement in public sector management involving the defence industry. Hybridity of AIC arrangements creates challenges of complexity and opacity, creating conditions that give rise to decoupling. Lack of accountability and monitoring exacerbates these challenges. Potential for coupling is identified with recommendations provided.

Subcontracting requirements and the cost of government procurement

AbstractGovernment procurement contracts are frequently subject to policies that specify a subcontracting requirement for the utilization of historically disadvantaged firms. I study how such subcontracting policies affect procurement auctions using data from New Mexico's Disadvantaged Business Enterprise Program. Theoretically, subcontracting requirements reduce prime contractors' private information on their costs by requiring them to select their subcontractors from a common pool of disadvantaged firms. This feature mitigates cost increases from using more costly subcontractors by causing prime contractors to strategically lower their markups. My estimated model reveals that New Mexico's past subcontracting requirements led to minor increases in procurement costs.

Reinvigorating the process of contractor selection in adaptive reuse projects: a novel decision-making and evaluation paradigm

Adaptive reuse projects reconfigure and revitalize existing buildings to enact an alternative purpose, diverging from the original design intent. The study introduces a novel decision-making framework that adopts the Ordinary Priority Approach (OPA) based on the integrated Relative Performance Index (RPI) for selecting and appraising contractors in adaptive reuse projects. Current methodologies lack criteria and assessment approaches tailored to the prototypical challenges of adaptive reuse projects, compelling special knowledge, skills, structural design considerations, sustainable methods, and prudent resource conservation. Accordingly, this research aims to 1) Identify and evaluate primary Contractor Selection Criteria (CSc) and their sub-criteria influencing contractor choice for adaptive reuse; 2) Rank sub-CSc using the Relative Importance Index (RII); 3) Assign weights to sub-CSc via the OPA, and 4) Examine the contractors’ performance using the RPI method. By offering this framework, this paper enhances and empowers decision-making processes to opt for contractors with the requisite expertise and competencies for successful adaptive reuse projects, filling a crucial knowledge gap. Six contractors were selected to assess the feasibility and validate the proposed framework. Among the chosen contractors, numbers 2, 4, and 5 exhibited significant performance concerning the top-ranked sub-CSc, registering RPI values of 1, 0.88, and 0.86, respectively.

Systems Engineering Transformation: Transdisciplinary Endeavor


 
 
 System Engineering (SE) solves the most complex problems by bringing together societal issues, theoretical engineering, and the transformation of theory into products and services to better mankind and reduce suffering. The research of this paper utilizes transdisciplinary engineering to develop a SE methodology for the concept stage permitting proposal generation accuracy and expediency to provide solutions to counter regional aggressive threats.
 Today’s world stage is witnessing superpower dominance over neighboring less military-capable nations. The societal impact goes beyond the borders of conflict and affects the world’s global market. In the deterrence of dominance, the United States’ posture is providing weapon systems to the victim in our increasingly unstable geopolitical environment. The US has many reasons to make this technology available to other nations; just as it has many reasons to constrain proliferation.
 The United States Government is energizing the U.S. defense industry to provide the needed weapon systems following US prescribed acquisition methods. The sale of US weapon systems to International Customers is through a US defense contractor implementing a specialized acquisition model specific for international customers acquiring exportable defense articles. These constraints in the form of export regulations, critical to this paper, are essential to account for early in the concept development. The added complexity to concept development in international defense is that in addition to the usual, “what capabilities does the customer need to accomplish their mission?” and “what are the alternative solutions?” questions, we need to address the fact that US contracts may be required to limit capabilities and/or the technical solution space in opposition to the international customer’s desires. Whereas we normally turn to systems engineering processes to address such complex problems, we have found that the current SE methodology for the concept stage does not address the complexities associated with international sales.
 The international customers’ need for complex solutions in an expedited time frame emphasizes the prime contractor’s complex and inadequate proposal concept stage. Under U.S. government procurement, the prime contractor shifts a portion of the design phase into the concept phase. This modality requires significant time and funding to fully develop the technical baseline, meanwhile, the international customer requires a solution to react to an immediate threat to their country’s safety. The main objective of this research is to develop a system engineering methodology for the concept stage to effectively understand the technical baseline maturity for proposals specific to International Customers.
 
 

Analysing the Factors that Enhance the Growth and Survival of Supply Chain Processes on Design Management and Procurement in Construction Firms

The construction industry has faced challenges because of the interaction between design management and procurement in projects where the prime contractor is in charge of design management and design work is perhaps completed concurrently with construction. The actions taken by the parties will mostly dictate the type of plans the design management can create for the procurement and whether they are provided on time. Production success depends on the conditions established by design management and procurement as a whole. The article sought to improve operations by giving the target business a design management and procurement linkage through an efficient and effective supply chain strategy. An empirical analysis as well as a design science study were utilized to finish the study. Based on the research’s interviews, it was discovered that the target company’s design management and procurement departments did not share a uniform procedure. Furthermore, there was no agreement on what should be included in the plans that were needed for the purchase, which prevented communication and cooperation. Given the issue at hand, there are numerous ways to practice things, therefore a growth direction has to be selected. The development of design and procurement packages was chosen, and enhanced cooperation amongst the involved parties was required. This study led to the development of a suggestion for enhancing the supply chain procedure between procurement and design management.

공급망 ESG 정책이 협력업체 ESG 성과와 고객만족에 미치는 영향

The purpose of this study is to investigate how a prime contractor’s supply chain ESG policy affects its suppliers’ ESG performance and customer satisfaction. For this purpose, 329 questionnaires were collected from employees of SMEs in the manufacturing industry.
 The empirical findings of this study can be summarised as follows. First, the supply chain ESG policy of the prime contractor has a positive effect on the ESG performance of the supplier. Second, the supply chain ESG policy of the prime contractor has no effect on customer satisfaction with the supplier. Third, the supplier’s ESG performance has a positive effect on customer satisfaction with the supplier.
 These results confirm that the supply chain ESG policy of the prime contractor has a significant impact on improving the ESG performance of the supply chain

A Review on the employer status of the prime contractor as a collective bargaining party

A Review on the employer status of the prime contractor as a collective bargaining party

Understanding the treatment benefit of hyperimmune anti-influenza intravenous immunoglobulin (Flu-IVIG) for severe human influenza.

BACKGROUNDAntibody-based therapies for respiratory viruses are of increasing importance. The INSIGHT 006 trial administered anti-influenza hyperimmune intravenous immunoglobulin (Flu-IVIG) to patients hospitalized with influenza. Flu-IVIG treatment improved outcomes in patients with influenza B but showed no benefit for influenza A.METHODSTo probe potential mechanisms of Flu-IVIG utility, sera collected from patients hospitalized with influenza A or B viruses (IAV or IBV) were analyzed for antibody isotype/subclass and Fcγ receptor (FcγR) binding by ELISA, bead-based multiplex, and NK cell activation assays.RESULTSInfluenza-specific FcγR-binding antibodies were elevated in Flu-IVIG-infused IBV- and IAV-infected patients. In IBV-infected participants (n = 62), increased IgG3 and FcγR binding were associated with more favorable outcomes. Flu-IVIG therapy also improved the odds of a more favorable outcome in patients with low levels of anti-IBV Fc-functional antibody. Higher FcγR-binding antibody was associated with less favorable outcomes in IAV-infected patients (n = 50), and Flu-IVIG worsened the odds of a favorable outcome in participants with low levels of anti-IAV Fc-functional antibody.CONCLUSIONThese detailed serological analyses provide insights into antibody features and mechanisms required for a successful humoral response against influenza, suggesting that IBV-specific, but not IAV-specific, antibodies with Fc-mediated functions may assist in improving influenza outcome. This work will inform development of improved influenza immunotherapies.TRIAL REGISTRATIONClinicalTrials.gov NCT02287467.FUNDINGFunding for this research was provided by subcontract 13XS134 under Leidos Biomedical Research Prime Contract HHSN261200800001E and HHSN261201500003I, NCI/NIAID.

System Requirements Development Under a Dual‐Prime Contracting Model

AbstractDeveloping requirements for a highly coupled complicated system is a challenging prospect for any project. The task gets more complicated if multiple organisations are needed to deliver the required solution. This paper relates the practical experience of ‘dual prime contracting’ where two organisations take the lead for the delivery of a system in response to the requirements of a common customer. The first part of the paper describes real motivations and contractual elements that underpin a dual prime contracting model. The technical body of the paper describes how a single requirement set is allocated and flowed to two prime contractors and introduces the common product breakdown structure. The allocation and flow down of non‐functional transversal requirements is given special treatment. The paper closes with useful insights for dual‐prime contractors, emphasising the value of early planning and preparation of joint collaboration strategies.

Should the Private Sector and Prime Contractors Adhere to the Federal FASC and FedRAMP Regulations?

This article argues that it is in the best interest of private sector organizations and prime contractors to adhere to the Federal Acquisition Supply Chain Security (FASC) and the Federal Risk and Authorization Management Program (FedRAMP) regulations. The paper opines that an organization should follow a supply chain security program, whether from the federal government or otherwise, because such obedience tends to reduce the risk of loss from various factors, including cybercrime. In the modern world, where cyber-attacks from threat actors are common, and the illicit profits gained from such activities can be huge, devotion to a supply chain risk management program is paramount. Thus, loyalty to a supply chain risk mitigation program is critical.

Should the Private Sector and Prime Contractors Adhere to the Federal FASC and FedRAMP Regulations?

Should the Private Sector and Prime Contractors Adhere to the Federal FASC and FedRAMP Regulations?

Numerical and experimental analysis of ultrasonic scattering in two-phase polycrystalline materials

Many polycrystalline materials found in nature and used in industry consist of multiple phases. Careful nondestructive characterization of these materials is of fundamental importance for quality assurance because microstructure is strongly correlated with mechanical performance. A fundamental understanding of ultrasonic scattering from idealized two-phase materials would provide essential information regarding the predictive nature of scattering measurements to quantify such microstructures. For this purpose, samples were created using spark plasma sintering (SPS) from mixtures with different ratios (with respect to mass) of copper and iron powders. These samples were used for measurements of wave velocity, attenuation, and backscatter. Prior ultrasonic scattering models for continuous media were modified for discrete synthetic two-phase three-dimensional microstructures. In this way, the ultrasonic scattering responses were determined numerically using DREAM. 3D based on 30 realizations of synthetic microstructures representative of each volume fraction. In this presentation, the computational approach is described, and the results are then compared with the microstructures and ultrasonic data from the samples made from the binary mixtures. The results show some agreement as well as highlight some limitations of the computational model. Finally, prospects for more complex materials are discussed. [Research supported by the Air Force Research Laboratory (AFRL) under prime contract FA8650-15-D-5231.]

사업장 위험요소 존재와 산업재해 발생의 관련성에 관한 연구

In this study, focusing on the 'Focused on the 9th Occupational Safety and Health Survey Data', the existence of risk factors in the workplace and the relevance of the occurrence of industrial accidents are confirmed, and based on this, the existence of risk factors is identified in advance and safety and health management measures to reduce occupational accidents. It was carried out for the purpose of use as basic data for establishment. Among the raw data of ‘Focused on the 9th Occupational Safety and Health Survey Data’, 5,108 workplaces were selected for final analysis. The data are divided by industry, and the size of the workplace (number of workers), the occurrence of industrial accidents (as of 2017), mental/psychological, chemical substances, physical, ergonomics, presence of dangerous machinery/equipment, and the presence or absence of risk factors for work in hazardous places are 6 Statistical analysis was performed using the items. As a result, the occurrence of industrial accidents by industry was highest in the construction industry, manufacturing industry, and service industry. In the manufacturing and service industries, the larger the workplace, the higher the occurrence of industrial accidents, and in the construction industry, the occurrence of workplaces with 100 or more workers was higher. In the relationship between companies, in the manufacturing and service industries, the occurrence of industrial accidents among in-house subcontractors of the prime contractor was high, and in the construction industry, the occurrence of industrial accidents was high in the workplaces other than the principal and subcontractors. As for the presence of risk factors in the workplace, the presence of hazardous machinery and equipment risk factors in the manufacturing industry, mental and psychological risk factors in the service industry, and the presence of risk factors in dangerous places in the construction industry were found to be the highest. difference in existence. Occupational accidents were found to be highly correlated when risk factors were present. Through this study, it was confirmed that the relationship between the business type, size, and company of the workplace is related to the occurrence of industrial accidents. In addition, although the presence of risk factors in the workplace is highly related to the occurrence of industrial accidents, there are differences according to the industry. The safety and health system of the workplace should be established after identifying the characteristics of the workplace and the existence of risk factors in advance, and improvement and countermeasures should be prepared by identifying harmful risk factors through the search for accidents occurring at the workplace and discovering potential risk factors.

Technological Emergence and Military Technology Innovation

ABSTRACT To what extent is military technology innovation emergent? This study answers this question by applying an emergence detection algorithm to roughly 300,000 technical terms extracted from military technology patents granted from 1980 to 2019. Emergence – instances of sudden and rapid growth of a technical term within the military patent corpus – is found to vary greatly over time. Military technology innovation during the period of 1996-2008 is found to be highly emergent. This period was found to be characterized by high organization-type diversity; non-traditional vendors, traditional defense contractors, large civilian-facing firms, and individuals generated military patents containing many novel emergent technical terms. However, in recent years, military technology innovation has exhibited markedly less emergence. The period of low emergence is characterized by reduced contributions by non-traditional vendors, defense prime contractors, and individual inventors to military patents containing emergent terms. These observations suggest that policies attempting to ensure a healthy defense innovation ecosystem should seek organization-type diversity and may benefit from employing promotion strategies targeted at distinct organization types.

State Immunity as applied to the Japanese Military as Purchaser and Joint Tortfeasor : Case of Korean ‘comfort women’

The redress and reparation efforts for the “comfort women” of the Japanese military during the Pacific War have been hampered in their home countries by the state immunity doctrine. In this paper, we first evaluate the current state of jurisprudence on state immunity doctrine, especially as expressed in the seminal 2012 Ferrini ICJ decision. There the concept of “armed forces” has been emphatically commandeered to bolster the strict application of state immunity, and a full legal analysis under the state immunity doctrine, namely, that of the putative exception of “territorial torts,” was cut short by the court upon their finding of the element of “armed conflicts”, “armed forces”. However, the reason for making exceptions to state immunity is that state actions are sometimes not exercises of sovereignty but private commercial acts such as e.g., hiring, contracting, property owning or private civil acts such as negligently causing damages inside the forum state, etc. Japan’s mobilization and maintenance of ‘comfort women’ and ‘comfort stations’ does not constitute ‘armed conflicts’, the quintessential exercises of sovereignty. It was the result of colonialism whereby men and women of occupied territories within the empire were forced into most subservient and inhumane roles in the intra-empire economy supplying its imperial war efforts. The evolution of jurisprudence on exceptions to state immunity should not be shut down easily with respect to ‘comfort women’ issues on the ground of a nexus to “armed forces”, “armed conflicts.” For subject matter relevance, the less well-known 1992 Weltover decision of the US Supreme Court interpreting the American codification of the state immunity doctrine is instructive, where it characterized purchase of bullets and other military supplies as a commercial act exempt from state immunity. Such shut-down of the full analysis is especially worrying because it is during ‘armed conflicts’ that worst tragedies especially against women take place and they happen at the hands of ‘armed forces’. The Japanese military, as the end-customer of ‘comfort services’, solicited/procured and paid for ‘comfort services’ to reduce the cost of the war. These private legal acts incentivized the private contractors into recruiting Korean women already impoverished under colonialism by deceit and into treating the Korean women thus recruited harshly and inhumanely during the ‘comfort services’. Throughout the relevant periods, the Japanese military set the specifications of the services to be delivered, exercising its prerogative as the end-customer and primary contractor. It is for this role as a joint tortfeasor in the “territorial tort” of fraudulent human trafficking and also as a purchaser in the “commercial activity “ of purchasing ‘comfort services’ that the modern Japanese government should be held accountable in a Korean court of law despite state immunity.

Ultrasonic scattering predictions of two-phase polycrystalline materials based on digital microstructures

Many materials found in nature and used in industry consist of multiple phases, and the mechanical performance of such materials is controlled by their material organization. Ultrasonic scattering is one approach to characterize these microstructures nondestructively. In this presentation, previous ultrasonic scattering theories for two-phase materials are discussed and implemented using discrete synthetic three-dimensional microstructures as a means to assess the material statistics. These models predict the ultrasonic wave speed, attenuation, and diffuse ultrasonic backscatter with respect to the volume fraction and grain size distribution of each constituent. The computational approach is then focused on predictions for samples created using spark plasma sintering (SPS) of Cu and Fe powders with varying volume fractions as well as pure Cu and pure Fe samples. DREAM.3D is used to generate digital synthetics representative of the SPS samples as characterized using electron backscatter diffraction (EBSD). A set of 30 realizations for each volume fraction is used for each to quantify the statistical variations expected. The combined theoretical and computational model is used to study the dependence of ultrasonic wave propagation on the material organization for these two-phase materials. [Work supported by Air Force Research Laboratory (AFRL) under prime contract FA8650-15-D-5231.]

Ultrasonic scattering in two-phase polycrystalline materials

Typically, many of the polycrystalline materials found in nature and those created using different manufacturing processes consist of multiple phases. Careful nondestructive characterization of these materials is of fundamental importance for quality assurance because microstructure is strongly correlated with mechanical performance. Ultrasonic scattering measurements have shown high sensitivity to material microstructure such that this approach is of interest for multi-phase materials. A fundamental understanding of scattering from idealized two-phase materials would provide essential information regarding the predictive nature of scattering measurements to quantify such microstructures. For this purpose, samples were created using spark plasma sintering (SPS) from mixtures with three different ratios (with respect to mass) of Cu and Fe powders. These elements do not alloy such that the resulting samples will not have any intermediate phases. Moreover, one pure Cu sample and one pure Fe sample were also sintered using SPS. The samples were imaged using electron backscatter diffraction (EBSD) to quantify the material organization. Ultrasonic backscatter and attenuation measurements were performed on the samples and the results were used for comparison with scattering models. Prospects for nondestructive evaluation of such materials are also discussed. [Work supported by Air Force Research Laboratory (AFRL) under prime contract FA8650-15-D-5231.]