Implementing and Evaluating an Innovative Approach to Simulation Training Acquisitions

This report describes an alternative business model for buying simulations and simulation training. This model seeks to align the financial incentives of industry participants with positive training and technology development outcomes. It proposes to do this by turning what has traditionally been the acquisition of training simulators into a service acquisition (the acquisition of training) with a private sector “tool vendor” marketplace to support it. The report examines the model in light of economic theory and of other business models related to the acquisition of training and simulations. In addition, it reviews academic literature and publicly available information about various simulation training initiatives, and it reports on interviews with those in industry and the Department of Defense with experience in developing, procuring, or using simulations for training. The report characterizes the “old” business model as being both fiscally wasteful and a hindrance to innovation. With the new business model, the DoD would stop buying both tools and training support and buy only training support; also, the DoD would stop buying training support with cost-plus contracts and start buying it on firm-fixed-price contracts. To ensure competition and innovation in the simulation tool market, the new model would separate the training support and tool markets, require compliance with adopted technical standards to guarantee product interoperability, and create a mechanism to inject seed money into the tool market.