An Initial Look at Technology and Institutions on Defense Industry Consolidation

Conventional wisdom holds that defense industry consolidation resulted from decreased defense spending. However, we maintain that understanding dynamic changes in key defense institutions helps provide a more complete explanation for observed consolidation. Specifically, we examine the interaction of evolving technology and changing institutions. Institutions reviewed include procurement policies, weapons requirements process and the procurement organizations. We take an initial look at the industry and highlight how these changes influenced transaction costs in the defense industry more fully explain the forces driving consolidation and provide greater insight to policy makers seeking to improve the performance of the defense industry. Further research is needed to build a robust institutional framework of the defense industry and the related government agencies to allow better policy prescriptions

Analysis of Competition in the Defense Industrial Base: An F/A-22 Case Study

Consolidation of the defense industrial base has led to concerns about whether enough competition exists between remaining firms to maintain needed cost reduction and innovation. We examine competition in the U.S. defense industrial base by performing an in-depth case study of Lockheed Martin and the F-22 program that considers multiple tiers of the industrial base. We find that defense firm specialization has led to outsourcing practices and arguably a more robust U.S. defense industrial base. Implications for government policy are identified

Investigating the Integration of Acquired Firms in High-technology Industries: Implications for Industrial Policy

Acquisition activity persists despite evidence that acquisitions do not improve firm performance. Further, government policy toward the defense industry has advocated consolidation in the name of nominal cost savings. We explore the role acquisitions play toward technology transfer and begin to identify factors associated with acquisition success through a review of existing research on post-acquisition performance that primarily considers acquiring firm stock performance. Using this research as a foundation, we build a model to analyze post-acquisition performance using a sample of high-technology firms. Results suggest critical success factors associated with post-acquistion stock performance are poorly understood. We conclude that proactive government policy toward high-technology industry mergers and acquisitions may be misguided due to difficulty in predicting acquisition outcome

Unique transaction costs in defense market(s): the explanatory power of new institutional economics

The following article is taken as an excerpt from the proceedings of the annual Acquisition Research Program. This annual event showcases the research projects funded through the Acquisition Research Program at the Graduate School of Business and Public Policy at the Naval Postgraduate School. Featuring keynote speakers, plenary panels, multiple panel sessions, a student research poster show and social events, the Annual Acquisition Research Symposium offers a candid environment where high-ranking Department of Defense (DoD) officials, industry officials, accomplished faculty and military students are encouraged to collaborate on finding applicable solutions to the challenges facing acquisition policies and processes within the DoD today. By jointly and publicly questioning the norms of industry and academia, the resulting research benefits from myriad perspectives and collaborations which can identify better solutions and practices in acquisition, contract, financial, logistics and program management. For further information regarding the Acquisition Research Program, electronic copies of additional research, or to learn more about becoming a sponsor, please visit our program website at: www.acquisitionresearch.org. For further information on or to register for the next Acquisition Research Symposium during the third week of May, please visit our conference website at: www.researchsymposium.org.Second Annual Acquisition Research SymposiumApproved for public release; distribution is unlimited

A Comparison of the Naval Air Systems Command Model III Method with the United States Air Force Repair Level Analysis Method of Level of Repair Analysis for Recommendation of a Lora Methodology on the Joint Service V-22 Osprey Program

In the past 30 years Life Cycle Cost (LCC) and Level of Repair Analysis (LORA) has been developed within the Department of Defense (DoD). The LORA process, outlined in the new Military Standard (MIL-STD) 1390D, is required to be accomplished in each DoD weapon system acquisition program. The Standard outlines 13 different service peculiar models. The Joint V-22 Program must determine an effective LORA methodology that appropriately considers Service unique requirements while limiting the need to run both the NAVAL AIR SYSTEMS COMMAND (NAVAIRSYSCOM) Model III and the Air Force RLA methods of LORA. The two methods, compared by relating 10 cost categories, have major differences in the overall approach as well as several categories. The Support Equipment (SE) and Inventory categories are reviewed in detail. The Model Ill\u27s inappropriate use of discount factors is illustrated. Recommendations are made to stop the current V-22 LORA effort, develop an interim capability to run both programs by producing a pre-processor Personnel Computer (PC) based program that outputs the input files for both methods, and start efforts to develop a common LORA model incorporating input data standardization and the best of the two methods

PEO AICS and PAINS, DAU's Senior Dynamic Cross-Functional Multi-Program Leadership Simulation

Panel #8: Acquisition Education: Changing Perspectives and TechniquesNaval Postgraduate SchoolApproved for public release; distribution is unlimited

Market based acquisition: competitive sourcing

Approved for public release; distribution is unlimited

The Guide to Lean Enablers for Managing Engineering Programs

This document provides the findings of the Joint MIT‐PMI‐INCOSE Lean in Program Management Community of Practice that are based on a 1‐year project executed during 2011 and 2012. The community was made up of selected subject matter experts from industry, government, and academia. The findings reported in this guide are based on known best practices from the literature, program experience of the subject matter experts, and input from an extensive community of professionals. The findings of the Joint Community of Practice were extensively validated through community and practitioner feedback, multiple workshops at INCOSE and PMI conferences, LAI‐hosted web‐based meetings, and surveys of the extended professional community. The survey results clearly show that programs that use the Lean Enablers show a significantly stronger performance in all dimensions—from cost, to schedule and quality, as well as stakeholder satisfaction. The core of this document contains (1) the 10 themes for major engineering program management challenges, and (2) the 43 Lean Enablers with 286 subenablers to overcome these challenges, better integrate program management and systems engineering, and lead engineering programs to excellence. The main engineering program management challenges that were identified and addressed By Lean Enablers in this guide are: 1. Firefighting—Reactive program execution; 2. Unstable, unclear, and incomplete requirements; 3. Insufficient alignment and coordination of the extended enterprise; 4. Processes are locally optimized and not integrated for the entire enterprise; 5. Unclear roles, responsibilities, and accountability; 6. Mismanagement of program culture, team competency, and knowledge; 7. Insufficient program planning; 8. Improper metrics, metric systems, and KPIs; 9. Lack of proactive program risk management; and 10. Poor program acquisition and contracting practices The 43 Lean Enablers (LE) and 286 subenablers for Managing Engineering Programs—actionable best practices— are summarized in six categories that represent the six Lean Principles (LP): LE 1.x: Respect the people in your program (LP6); LE 2.x: Capture the value defined by the key customer stakeholders (LP1); LE 3.x: Map the value stream and eliminate waste (LP2); LE 4.x: Flow the work through planned and streamlined processes (LP3); LE 5.x: Let customer stakeholders pull value (LP4); and LE 6.x: Pursue perfection in all processes.Lean Advancement Initiative (LAI) at MIT. Project Management Institute, Inc. (PMI). International Council on Systems Engineering (INCOSE)