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Reforming Defense Procurement: Lessons from France

Published online by Cambridge University Press:  20 January 2017

Ethan B. Kapstein  and
Jean-Michel Oudot
Ethan B. Kapstein
Affiliation:
INSEAD
Jean-Michel Oudot
Affiliation:
French Department of Defense
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Abstract

Is it possible to generate more efficient outcomes with respect to public procurement in general and defense acquisition in particular? Or are cost overruns inevitable when it comes to major engineering projects, like the development of modern weaponry? In this article, we draw on a unique data set of nearly 50 French armaments contracts in order to examine how one government has reformed its defense acquisition process over the past twenty years. Beginning in the early 1990s, France embarked on a series of policy reforms that enabled the state to contain skyrocketing weapons costs. We emphasize three, inter-related aspects of the defense acquisition environment in France that favored cost containment: first, hard budget constraints; second, the great technical capacity that the French government brought to bear on the weapons acquisition process, coupled with its iterative relationship with a small number of suppliers; and third, the use of contracting techniques that empowered project managers.

Keywords

defensereformhard budget constraintcontractinginstitutions
Type
Article
Information
Business and Politics , Volume 11 , Issue 2 , August 2009 , pp. 1 - 25
Copyright
Copyright © V.K. Aggarwal 2009 and published under exclusive license to Cambridge University Press 

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