Priced Out Of The Market-snip- […] Some 40 percent of the cost overruns are the result of suppliers submitting unrealistically low bids for new weapons and then coming back for more and more money as "unforeseen problems" appear and costs kept escalating and delivery delayed. This has come to be called "lowballing." Currently, procurement of weapons and major equipment make up about a third of the defense budget. While this is expected to decline over the next decade, as defense budgets shrink, the problem also extends to upgrades and refurbishment of existing equipment.
The military goes along with the lowball angle because it makes it easier to get Congress to approve the projects. Once a new project is in the military budget a few years it is very difficult to get it cancelled. Since Congress has a short memory the military does not take much heat for this never ending "lowball" planning process.
Actually, it's poor planning in general that causes most of the high costs. It's bad planning by the military, when coming up with the initial design, and bad planning on the part of the few manufacturers that have a monopoly on building certain types of weapons systems. Monopolies do not encourage […]
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MURPHY'S LAW: Priced Out Of The MarketFrom Strategypage.com (SP)
