Contracting practices for major weapons systems in the Chilean Navy: a case analysis

Abstract

The purpose of this thesis is to analyze the contracting practices for major weapon systems procurement in the Chilean Navy. The case analysis method, with emphasis in risk assessment and management, has been used to analyze the procurement of a ship missile system, referred to in this thesis as the 'Kilo Missile System'. The organizational structure, rules, regulations and authority chains are also analyzed using the Agency theory, the Information Processing model, and the Interpretivist model. Procurement practices used currently by the U.S. Department of Defense and private firms are used as a point of comparison for the case analysis. The analysis shows that the project involved a high risk, which was not realized by the Project Team. However, the competency and commitment of the Project Managers, the good relationship with the contractor, and the commitment of the latter with its national Navy allowed a favorable outcome. The thesis also provides a set of lessons learned and recommendations in the areas of organization, education and Project Management for improvement of future weapon acquisitions.