Analysis of military contracting procedures.

Abstract

Nearly one -third of the annual budget of the Department of Defense is spent for the research, development, and production of weapons systems. All but a very small fraction of these activities are carried out by private industry under contract with the government. Over the years this contractual relationship has given birth to the so-called defense industry- -an industry which in 1963 accounted for 3 per cent of the gross national product. No other industry is subject to as much governmental control as is the defense industry. These controls stem from many different motives. Some are designed to protect the public purse from being drained by payments of excessive or fraudulent profits. Others have as their purpose the furtherance of social or economic objectives. Still others are concerned with providing contractors with incentives to improve their performance.