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The work reported in this document was conducted under IDA's Independent Research Program. Its publication does not imply endorsement by the Department of Defense or any other government agency, nor should the contents be construed as reflecting the official position of any government agency.

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Economists and political leaders alike have discussed defense economics for more than two centuries. Issues have included the economic causes and consequences of war; the financing of armies and navies; and the acquisition of manpower, arms, supply, and transport. One can trace these issues from the early years of the Republic through the wars (and industrialization) of the nineteenth century to the two world wars. Since the 1950s two new aspects of defense economics have emerged: first, peacetime defense spending levels have exerted a major and permanent impact on the economy; and, second, economists have contributed to a full range of defense decisions. During the 1960s economists achieved a major influence over such decisions, if only by their rising to senior levels in the Defense establishment. That influence, however, has declined since the 1960s. Nevertheless, defense economics has taken on an added significance as the country has-since the mid-1970s-increased defense spending by substantial amounts and signaled an intent to pursue a number of defense initiatives that are meant to influence the way major sectors of the economy will conduct business in the future.

Qqf~D~goR3-DEFINITIONS IDA publL.hes the follcw.-g d icuc cnts to report ne m"u lts of Its work. ReportsReports are t IN mst authoritative and most carefully considered products IDA pvblishes. They normally embody results of major projects which (a) hve" a direct bearing on decisions affecting major programs, or (b) address Issues of significant concern to the Executive Branch, the Congress and/or the public, or (c) address issues that have signifcaint conomic Implicallons. IDA Reports are reviewed by outside panels of experts to ensure their high quality and relevance to the problems studted. and they are released by the President of IDA. PapersPapers normally address relatively restrited technical or policy issues. They communicate the results of special analyzes, Interim reports or phases of a task. ad hoc or quick reaction work. Papers are reviewed to ensure thai they meet standards similar to those expected of refereed papers in professional Journals. Memorandum ReportsIDA Memorandum Repcrts are used rcr the conveni•nce of the sponroo or the analysts to record substantive work done In quick reaction studies and major Ink-mct!ve technical support activities; to make available prbiimlnary and tentative reruits 0, amtlyses or at working group and panel aclivities: to forward Itormation that Is essentially unanalyzed and une.elLated; or to make a record of conferences, meetings, or briefings, or of data developed In the course ct an Investigation. Review of Memorandum Reports Is suited to their content and Intended ose.The resulti of IDA work are also corv-y~t hy briefings end Informal me."noroda to sponsors and others designated by the sponsors. when acpropriate.The work reaottd In this document was conducted under contract MDA 903 84 C O031 for the Deoartment of Defense. The publicatlon of this DA docdment does not Indicate Worsemoee by the Department of Defense, nor should the contents be comstrved as reflecting the official position of thai agency, This study was conducted tvnder contract MDA903 84 C 0031; task order number 5T-G6-599, The Defense Acquisition Process.The study relied on interviews with more than 100 acquisition officials and experts to describe the current process, and to obtain their views on how well it is working. The authors thank these interviewees for their time and for providing their candid views. IThe authors also thank the IDA review panel, which provided helpful guidance at se-ieral stages of the study, and reviewed an earlier draft of this report. "" Acquisition Policy -Simplified and unified acquisition regulations and policies that delegate authority to the working level; and j "* Management -Policies that promote excellence in the work force, and ensure I an adequate txhnology and industrial base. S1AQuest For Excellence, Repon of the Presint's Blue Ribbon Commission on "tfense Msnagemn. HI"1986.• ... ES-iThese management characteristics represent ideals for the defense acquisition process Implementing them requires ftadamental changes that in many cases conflict with longs...