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Weekly Updates* In the article "Why Compete?"(June 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 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 and General Dynamics) 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.
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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. 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
Philadelphia, PA
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