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Keywords:

  • acquisition reform;
  • NunnMcCurdy 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.