The use of competition in weapon system acquisition is widely reflected in requirements issued by Congress, the Office of Management and Budget (OMB), DoD, and the military services. This emphasis stems from the conviction that competition during the production phase of the acquisition system will drive the unit cost of a system or subsystem down and reduce overall procurement cost to the government. However, it is not self-evident that a second production source will produce savings for the government in every procurement. In this paper, the authors compare the characteristics of a typical business market to those of defense acquisitions, and they identify the benefits and drawbacks of competition in defense acquisitions specifically. Using historical data and RAND's required cost reduction methodology, they also show how DoD can determine when the introduction of competition during production is a reasonable acquisition strategy.
Arena, Mark V. and John Birkler, Determining When Competition Is a Reasonable Strategy for the Production Phase of Defense Acquisition. Santa Monica, CA: RAND Corporation, 2009. https://www.rand.org/pubs/occasional_papers/OP263.html.
Arena, Mark V. and John Birkler, Determining When Competition Is a Reasonable Strategy for the Production Phase of Defense Acquisition, Santa Monica, Calif.: RAND Corporation, OP-263-OSD, 2009. As of August 02, 2022: https://www.rand.org/pubs/occasional_papers/OP263.html