Army leaders suddenly realized last summer that their planned replacement for the Humvee was in danger of being killed by Congress. The Government Accountability Office was estimating each of the so-called Joint Light Tactical Vehicles might cost $350,000, and that’s not even counting on-board radios, extra armor and administrative overhead. Facing the demise of yet another modernization program, the service began jettisoning requirements to get the cost down. But it also decided to transfer much of the program risk to industry, wrongly assuming contractors would sign up for any deal they were offered. Now some of them are contemplating not bidding at all, and the commercial truck companies that might have been inclined to sign up are facing pressure from activist investors to forego excessive risk.
I have written a commentary on this latest military procurement debacle for Forbes.com, which you can read here. Incidentally, Forbes has now given me my own dedicated web-page, so my searing insights may be a bit harder to find until we get the details sorted out.
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