The defense acquisition system focuses so much on cost it has become completely unaffordable, and riddled with missed opportunities.
In this podcast episode Strategic Institute discusses the difference between ‘cost’ and ‘value’, and we think out loud about the true cost of focusing on price tags. The Department of Defense for most of its business arrangements engages in procurement, establishing a buyer/seller relationship and pricing, and when that won’t do, it incentivizes incurring cost through reimbursement contracting. These otherwise rudimentary business approaches are made overly-complicated by a burdensome bureaucratic, compliance framework, that at least when it comes to R&D and fielding new capability, add little value but hinder much.
In this case, affordability and value are sacrificed for one of the worst four letter words in business – COST!