January 1, 1986
An evaluation of past efforts to estimate the savings due to the use of competition in weapon system production programs is presented. The evaluation was based on the research literature available from the historical efforts. The evaluation of the literature discusses in detail the analytical models and techniques used in the analyses of price formation in sole-source and competitive production programs, the data bases used and reported for the programs studied, and the results and conclusions reported in the literature. The memorandum concludes that the models and techniques used to assess the price effects of competition are immature and inadequate to sort out the effects of comptetition sought by the analyses; that the data bases used in the literature are incomplete, of uneven quality, and may be seriously biased; and that the resulting estimates of savings due to the use of competition are of uneven validity.
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