The US Navy’s concern about sole suppliers for defense

An article in Bloombergbusinessweek (Sept 5, 2011) describes the worry in the Navy that their sole sourced contract for the Aegis Combat System with Lockheed Martin may not have delivered the best deal. Past contracts to Lockheed have been under the sole source process with no competitive bids. But when competitors like Raytheon have argued that it is capable of competing, the Navy has argued that introducing another company may cause delays.   Will competition be a necessary ingredient for the US government to get effective suppliers who deliver on cost and quality ? Will the threat of using Raytheon be sufficient for Lockheed to offer a more competitive price ? Are “sole supplier” contracts justified for some products that involve intense collaboration between the supplier and the US Navy ?

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About aviyer2010

Professor
This entry was posted in Collaboration, Operations Management, Supply Chain Issues and tagged , , , , , , , , , . Bookmark the permalink.

One Response to The US Navy’s concern about sole suppliers for defense

  1. What if they compete on time, too? I do not think the Navy’s time concerns are legitimate because some design work is done during the bidding process, as well. If there is a delay, it is certainly worth the money saved by the government.

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