Competition Dying in Defence Industry?
April 28 2008 | 0 comment(s)
Today Messrs
Zakheim and Kadish - now senior executives at Booz Allen Hamilton though you might
remember them as former US Defense and Missile Defense Agency heads,
respectively - wrote an opinion piece in the Washington Post about the decline
of competition in the defence industry amongst prime contractors in the
US.
Their point is pretty clear... "Competition barely exists in the defense industry and is growing weaker by the day." They go on to say that "In the 1980s, 20 or more prime contractors competed for most defense contracts. Today, the Pentagon relies primarily on six main contractors to build our nation's aircraft, missiles, ships and other weapons systems."
While it's true that competitive diversity is generally
good for keeping costs down and for helping to prepare the government what
Messrs Zakheim and Kadish have missed
is that it has nothing to do with the number of primes but the number of firms involved
in general and their propensity to adopt innovative technologies. I'd rather see 6 primes with fantastic ways
and means of working with security startups than 20 primes with archaic methods of
working with (or shall I say scaring off) entrepreneurs and people with bright
ideas. What do you think?
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