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Efficacy of US Legislation in Military Acquisition Programmes: Nunn–McCurdy Act Unveiled†
Article first published online: 7 JAN 2013
Copyright © 2012 The Economic Society of Australia
Economic Papers: A journal of applied economics and policy
Volume 31, Issue 4, pages 491–500, December 2012
How to Cite
Ritschel, J. D. (2012), Efficacy of US Legislation in Military Acquisition Programmes: Nunn–McCurdy Act Unveiled. Economic Papers: A journal of applied economics and policy, 31: 491–500. doi: 10.1111/1759-3441.12000
- Issue published online: 7 JAN 2013
- Article first published online: 7 JAN 2013
- acquisition reform;
- Nunn–McCurdy Act;
- principal agent;
- public policy;
- regulatory process
This study analyses the impact of regulatory legislation, specifically the Nunn–McCurdy Act, by the United States Congress on major military acquisition programmes. Nunn–McCurdy's stated objective is to curtail cost growth in weapon system acquisitions. To achieve this end, the legislation threatens cancellation of military acquisition programmes that breach specified cost growth thresholds. This effort collects and analyses a unique data set spanning the lifetime of the Nunn–McCurdy legislation to reveal the threat of termination is rarely enforced. Secondary effects, in the form of programme restructuring are found to be prevalent, but not in those areas that most adversely affect the programme. Thus, Nunn–McCurdy does not provide a strong incentive for acquisition programmes to change processes or procedures. As a result, the legislation is ineffectual in achieving its objective, and cost growth in major US military acquisition programmes remains problematic.