MARAD's Maritime Security Program: Exemplary Innovation in Acquisition Policy?
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The potential of real call options to reduce the cost of meeting unpredictable variations in demand for support assets and services by government motivates this examination of an apparently successful instance by the U.S. Maritime Administration's Maritime Security Program (MSP). This case study, however, fails to find corroborating evidence of efficiency gains. The MSP's financing and structure obscures and understates the total cost of the acquired service and likely fails to minimize costs. Identified program modifications could increase transparency and strengthen program management.