Benefits of competition.* In the article "Why Compete?"(June June: see month. 2009, p. 16) about the Air Force refueling tanker program, the following statement is made: "The benefits of competition are well established: innovation, efficiency, effectiveness, quality and performance. Although competition is frequently implemented in Defense Department programs, its practice is not being maximized." The U.S. Navy's Littoral Combat Ship The Littoral Combat Ship is the first of the U.S. Navy's next-generation surface combatants. Intended as a relatively small surface vessel for operations in the littoral region (close to shore), the LCS is smaller than the Navy's guided missile frigates, and have been compared to program is an example of where two independent shipbuilders are competing with each other with different ship designs for the same program. The competing contractors (Lockheed Martin For the former company, see . Lockheed Martin (NYSE: LMT) is a leading multinational aerospace manufacturer and advanced technology company formed in 1995 by the merger of Lockheed Corporation with Martin Marietta. and General Dynamics General Dynamics Corporation (NYSE: GD) is a defense conglomerate formed by mergers and divestitures, and as of 2006 it is the sixth largest defense contractor in the world[1]. The company has changed markedly in the post-Cold War era of defense consolidation. ) stated an estimated unit price for each ship at $220 million. The cost is now in the range of $700 million per ship. The congressional cost cap is $460 million per ship. Therefore, the Navy may not reach its required acquisition goal of 55 littoral combat ships if the price is not lowered. The above attributes of innovation, efficiency, effectiveness, quality, and performance appear not to have manifested themselves up to this point. [ILLUSTRATION OMITTED] Although there is competition, the taxpayers have not realized a monetary savings. The Air Force may have concluded that it is prudent to go with the winner-take-all scenario in the tanker competition between Boeing and Northrop Grumman Northrop Grumman Corporation (NYSE: NOC) is an aerospace and defense conglomerate that is the result of the 1994 purchase of Grumman by Northrop. The company is the third largest defense contractor for the U.S. . In this uncertain budgetary climate, the Air Force believes the argument that two, solesource, "split buy" awards would not achieve the incentives of competition. Steven Silverman Steven (Steve) A. Silverman is a politician and an at-large County Councilmember in Montgomery County, Maryland. Currently he is in his second, four year term. He chairs the Council's Planning, Housing, and Economic Development Committee and has twice been chosen by his peers to Philadelphia, PA |
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