Characterizing Commercial Market Effects on Military Electronics Development Program Costs. An Analytical Framework.
Abstract
OSD(PA&E) tasked LMI to study how defense acquisition reform, advanced business processes and new high technologies have affected how products are developed for DoD and what methods should be used to estimate the costs of those developments. LMI first looked at the defense electronics sector using Global Positioning System (GPS) receivers as an analog. A portion of that investigation looked at the influence of the commercial marketplace on what DoD pays for product development. LMI developed an economics-based analytical model that characterizes how the existence of commercial market potential for a new product impacts industry interactions with DoD. The model, which uses a two-stage game algorithm, captures the motivations and incentives of the various players involved in a competitive bid for a DoD product development contract. It provides DoD with an analytical framework for assessing contractor bids for development programs with dual military and commercial potential. This report also contains a brief market description and analysis of the GPS receiver industry that provides some insights into how the LMI model applies in that domain.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 1998
- Accession Number
- ADA355679
Entities
People
- Anthony L. Clippinger
- Eric M. Gaier
Organizations
- LMI