Navy Acquisition via leasing: policy, politics, and polemics with the Maritime Prepositioned Ships
Shank, John K.
Miguel, San, Joe
Summers, Donald E.
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In recent months, leasing has been prominent in the press in connection with the Air Force's ill-fated attempt to obtain the use of Boeing re-fueling tankers without buying them. Gone from memory is the early 1980's controversial Navy leasing program of Maritime Pre-positioned Ships that had a different result. This paper presents an analysis of the various issues and parties to the very creative and innovative financing on behalf of the Navy's Military Sealift Command. Still in existence today, the 1983 contracts for thirteen TAKX ships were valued at approximately $2.6 billion. While the decision is often framed as a lease versus purchase choice, the facts indicate that the option to purchase was not seen as viable at the time. In hindsight, the TAKX leasing program was successful and cost effective, despite the whirlwind of political commentary and intrigue and the dueling quantitative analyses surrounding it. However, as an unintended (or, perhaps, intended) consequence, laws and policies have since been changed so that leasing is no longer viable for financing military assets. The case presented here considers altering existing laws and regulations to once again permit leasing of military resources.;The following article is taken as an excerpt from the proceedings of the annual Acquisition Research Program. This annual event showcases the research projects funded through the Acquisition Research Program at the Graduate School of Business and Public Policy at the Naval Postgraduate School. Featuring keynote speakers, plenary panels, multiple panel sessions, a student research poster show and social events, the Annual Acquisition Research Symposium offers a candid environment where high-ranking Department of Defense (DoD) officials, industry officials, accomplished faculty and military students are encouraged to collaborate on finding applicable solutions to the challenges facing acquisition policies and processes within the DoD today. By jointly and publicly questioning the norms of industry and academia, the resulting research benefits from myriad perspectives and collaborations which can identify better solutions and practices in acquisition, contract, financial, logistics and program management. For further information regarding the Acquisition Research Program, electronic copies of additional research, or to learn more about becoming a sponsor, please visit our program website at: www.acquisitionresearch.org. For further information on or to register for the next Acquisition Research Symposium during the third week of May, please visit our conference website at: www.researchsymposium.org.
Second Annual Acquisition Research Symposium
NPS Report NumberNPS-AM-05-046
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