Concept

With defense spendingrequiring more and more tax dollars to procure weapons for national defense, perhaps it is time to change the way equipment is bought, sold, or otherwise obtained. A shift away from government subsidies for defense research and more towards a market model where defense companies shoulder the research and recoup the cost if the government chooses to buy the product seems to be a place to start.

Of course, this would force Lockheed, Boeing, Northrup Grumman, TRW, and the other suppliers increase their risk of failure. No longer would they be able to build a prototype that, while not cheap, is certainly less expensive than the production model. The supplier would have to come to the table with a full up version of the aircraft, gun, or other equipment that they wish to sell.

The good

The positive impact should be a decrease in the cost of the equipment the government purchases for our troops. It is hard to believe that this would be like having a choice like shopping at Sears, Wal-Mart, or the mall. It would probably be more like going to the car dealer. You have al limited choice of where you can go, but everyone wants your business. Deals will be had, and cost should be reduced.

Drawbacks

One question raised is whether the supplier will try to sell you the base model, and try to tack on accessories to drive up the price. For example, if the contractor built a plane, but without the weapons system, adding that system will incur significant cost.

Another issue raised is what about the businesses that are selling the equipment? Production lines are expensive to set up, and just as expensive to shut down. The companies in question would have to find a cheaper way to produce their wares. Given the current salaries of scientists and engineers, this will not be an easy transition.

Conclusion

Of course, this idea is not complete, but is designed to spark conversation to find a better business model that provides for the national defense, with better savings for the taxpayer. In the day of $200b programs, it is time to re-examine how we pay for the national defense, while still managing to provide for the national defense.