Impact of Defense Industry Mergers on The Cost of Military Weapons Systems
Abstract
The United States defense industry has been in a constant state of consolidation over the last 16 years. This thesis reports the impact of these defense related mergers on the cost of military weapons systems. The Selected Acquisition Reports (SARs) provided the data for this research. The analysis of the data suggests that the defense industry's consolidation did not result in higher costs for DoD's military weapons in the post-merger period. This report concludes that on average approximately 76.4 percent of the weapons systems produced by Lockheed Martin, Boeing, or Northrop Grumman, the three largest defense contractors respectively based on 2006-awarded contracts, experienced a statistically significant change in their cost estimates. Weapon systems in the fixed wing aircraft category were most impacted by defense related mergers. About 72.7 percent of the systems in this category showed a statistically significant change in cost estimates, of which 63.6 percent exhibited a statistically significant decrease in cost estimates. Weapon systems in the strategic electronics category were also highly impacted by defense related mergers. About 75 percent of the systems in this category showed a significant change in cost estimates, of which 50 percent exhibited a statistically significant decrease.
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 01, 2007
- Accession Number
- ADA475776
Entities
People
- Grisko R. Alfonso
Organizations
- Naval Postgraduate School