This is just an Excerpt from a larger document, click here to view the entire document.Introduction
In the early 1980's, the Department of Defense's (DoD) only incentive to use commercial items was the potentially lower procurement costs that result from the economies of scale of the larger commercial market. Given today's austere defense budgets, cost savings remains a strong incentive.
Over the past 10 years or so, however, additional incentives have arisen. In 1986, for example, Congress passed legislation requiring DoD to give preference to the acquisition of nondevelopmental items (NDI). The passage of this legislation was a response to the:
Increasing cost of system development programs
Increasing time to field systems
Technical risk associated with new development
Use of already developed items, whether commercial or military, saves research and development costs, shortens the time to field systems, and reduces the risk associated with new development. Based on these incentives, Congress broadened the preference for the acquisition of commercial items to preference for the acquisition of NDI, coining the term. In the 1990's, two more compelling reasons for using commercial items specifically were recognized.
First, the Department of Defense recognized that it must buy from the commercial market to access state-of-the-art technology and products. In his memorandum of June 29, 1994, then Secretary of Defense Perry articulated the importance of buying from the commercial market. In many of the defense-significant technological areas, the defense department trails private industry in research, development and application. For example, in the fields of communications, electronics, and computers the pace of technological evolution resulting from high commercial demand outstrips the capabilities of any government research and development program.
A second compelling reason to use commercial items is the integration of the defense and commercial industrial bases. DoD requirements that can be satisfied by commercial production are far more likely to have a stable and existing industrial base to draw from if there is a surge in requirements due to an emergency. Additionally, in times of reduced procurement, DoD business is not sufficient to keep many defense-unique suppliers in business. Integrated commercial and defense production is beneficial for the nation's security and economy in the long run.