Insourcing Backfire: DoD Must Objectively Weigh Procurement Options

December 24, 2011

As debt, deficit reduction and the looming end of U.S. engagements in Iraq and Afghanistan increase pressures on the defense budget, defense dollars will have to be spent more wisely and effectively, particularly in procurement and sustainment.

In recent years, there have been a number of efforts in this direction. Three specific ones are related to the insourcing issue.

First, Congress has stopped so-called lead systems integrator (LSI) contracts for major weapon procurements. Cost and schedule overruns led to the cancellation or curtailment of the most conspicuous of these ambitious programs, in which the integrating contractor produced few of the program's actual systems and equipment. Seeking to head off further waste, Congress virtually forbade them — assuming (perhaps erroneously) that the government could achieve this function and do it at lower cost. 

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