Pentagon Procurement opposes mergers

A Wall Street Journal article (February 9, 2011) reports that the procurement officials at the Pentagon will oppose mergers of defense suppliers. The belief is that competition has to be maintained to increase the US government’s buying power.  The Pentagon is reported to spend $ 400 billion a year on contracts, this new approach runs counter to the consolidation that was encouraged for many years. Imposition of these antitrust rules will require coordination with the Justice Department and FTC.  With defense spending expected to be flat, an interesting question is – Are more competitors better for component purchases compared to system purchases ? How will future spinoffs and mergers be evaluated to maintain supply chain competitiveness at all levels ?

About aviyer2010

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