Competitive Sourcing--A Critical Component of DoD's Force Modernization Program

Abstract

The Quadrennial Defense Review (QDR), the Defense Reform Initiative (DRI), and new Congressional legislation call for a Revolution in Business Affairs (RBA) within the Defense Department. A major element of this revolution is the competitive sourcing of appropriate DoD commercial activities. This initiative draws upon the competitive forces of the private sector to generate substantial savings to support the ambitious modernization program detailed in the Future Years Defense Program (FYDP). DoD expects the combined results of the QDR and DRI to produce $6.5 billion in annual savings, of which, $2.5 billion is slated to come from competitive sourcing. This research indicates that competitive sourcing alone has the potential of nearly satisfying the entire DRI savings goal. Using a conservative estimation methodology, competitive sourcing can yield about $5 billion in annual savings towards the DRI goal. If more aggressive strategies are employed, and combined with effective competitive sourcing techniques, estimates of annual savings approach 6 billion. Competitive sourcing offers DoD a powerful means to reduce program risk inherent in the FYDP.

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Document Details

Document Type
Technical Report
Publication Date
Mar 11, 1999
Accession Number
ADA366698

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  • John M. Wendel

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  • Naval War College

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