How to Build an Economical and Effective Procurement Strategy for Defense Projects
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by: Johan Corner
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Word Count: 360
Date: Thu, 3 Nov 2011 Time: 12:49 AM
The US Department of Defense carries out the job of managing military contracts. The department aims to make optimum use of taxpayer's money while offering quality equipment and services to the armed forces. The necessity of cost effective defense programs has been further increased by the likelihood of budget cuts to tackle the federal deficit problem.
Program costs running into hundreds of millions is not uncommon when it comes to defense procurements. Sometimes these programs do not even generate the kind of results that were expected, making them very costly experiments that always have a chance of failing. Cost cutting measures are being employed in all sectors as the economy draws close to a second recession, and this has made resourceful and feasible defense programs a must for DoD.
There is a pressing need for change in DoD procurement. The department needs to come up with methods of ensuring that all the projects offer expected results in a cost efficient manner. If an extremely costly program is likely to result in uncertain results after 15 -20 years, it cannot be deemed as efficient. In order to achieve this objective, DoD branch dealing with procurement and contracting policies will have to depend on integrity and excellent leadership. Defense projects need to be chosen based on their possible benefits, not just their cost.
A lot of times, DoD procurement focuses on big money projects that steal the limelight and display the might of the United States military. Opting for contacts based on their importance and possible benefits to the military is the best policy for the defense department under the present economic conditions. As the department already holds more than enough weapons, signing another weapons contracts is not recommended. The department needs to focus on the deficient areas.
At present, the US is concerned about the expenditure on Afghanistan and Iraq based subcontractors and contractors. Returns offered by around $20 billion worth defense procurement investment in the contract are little. This proves that the US firms are a better choice than local contractors for awarding these contracts.
Cautious use of American taxpayer's hard earned money is the main aim of the US defense department.
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Defense Procurement is an important a part of the governance; via certain guides the best sheets.
