In This Story
This study sought to identify important trends in DoD’s supplier base and its rates of effective competition and market concentration, and importantly compare these trends with the rest of the federal government and its contractor base. These are concepts of longstanding importance in government contracting; however, what has been relatively unexamined to-date is whether DoD is unique in its competition-related efforts or if similar patterns exist throughout the federal government. The results of this study show that compared to other federal government agencies, DoD exhibits:
- similar rates of prime contractor entry and exit,
- higher levels of effective competition, and
- higher but reasonable levels of market concentration.
Additionally, despite the overall decline in the number of prime contractors, DoD’s effective competition rate and level of market concentration do not appear to be negatively affected. This knowledge provides important context for certain debates regarding the overall standing of DoD on important issues that concern the entire federal government. These results should be encouraging to DoD policymakers as they shine a mostly neutral or positive light on the state of competition in DoD contracting.