Competition in the Defense Industry: An Economic Paradox

THE FEDERAL GOVERNMENT IN STRIVING FOR PROCUREMENT EFFICIENCY OF DEFENSE PRODUCTS HAS CREATED A SITUATION OF INADEQUATE COMPETITION AND INDUSTRIAL CONCENTRATION BY OVERREGULATION AND INEFFICIENT ADMINISTRATION. ARTICLE DISCUSSES THE PRESENT ENVIRONMENT AND THE CURRENT LEVEL OF COMPETITION IN THE GOVERNMENT-INDUSTRY RELATIONSHIP. GOVERNMENTS ACQUISITION STRATEGY IS A BASIC DETERMINANT TO THE DEGREE OF COMPETITION IN THE MARKET. EXISTING APPROACHES INCLUDE TOTAL PACKAGE PROCUREMENT CONCEPT, SECOND SOURCING, AND LICENSING. AUTHOR FEELS A MIX OF STRATEGIES RATHER THAN A SINGLE ONE WILL HELP TO INCREASE COMPETITION. THERE IS A CONCENTRATION OF A FEW PRIME DEFENSE CONTRACTORS WHICH ACT AS MONOPOLISTS. CONFLICT HAS RESULTED IN POST EFFORTS TO INCREASE COMPETITION.