Research for Contractors

Outsourcing is one way, although not the only way, to increase efficiency. Outsourcing, or more generally, competition (whether public or private) provides cost visibility - customers begin to see what they pay for goods and services. It also can provide alternative sources, enhance flexibility, introduce better business practices, and take advantage of emerging technologies and innovations. Outsourcing and competition are sometimes considered something new and untested, as experiments. In fact, they are not. The public sector has relied on the private sector for years. Although it is hard to write contacts for something as risky as developing and manufacturing a major weapon system, the Department of Defense (DOD) has done it repeatedly. DOD has outsourced successfully functions as complex as acquisition, and as straightforward as laundry services. This is not uncharted territory. The purpose of this paper is to take a first look at what outsourcing opportunities exist and what types of cost savings are possible. To glean some insights into implementation, we look at how one naval technical center has outsourced various functions. We consulted several databases to quantify good candidates.

Gaming is a tool that the military has used with great success to gain insights into the feasibility of alternative strategies or tactics before actually putting one into practice. Although gaming does not provide real answers, it can provide insights into strategic 'what if' questions. The validity of the insights gained is largely a function of the reality designed into the game and the willingness of the players to immerse themselves in the play. The Advanced Research Projects Agency (ARPA) asked CNA to design a game based on a business sector undergoing change in response to the defense drawdown. The shipbuilding industry was chosen because (1) it is a critical business sector for U.S. economic and military security, (2) it is facing major near-term strategic and tactical decisions that will define its future, and (3) it could be gamed with a high degree of realism. The purpose of the game was to bring together important leaders from government and industry to exchange information and gain insights. Specifically, we wanted to help industry and government leaders answer the following questions: (a) How can the U.S. shipbuilding industry compete in the global market? and (b) What technologies enhance or promote U.S. competitiveness in this market? The game was designed with these objectives in mind. This research memorandum describes the game design and the game play, and provides a summary of the panel discussions, the shipyard play, and the lessons learned.