Break the Department of Defense’s Acquisition Monopsony

In a recent article, authors Shyam Sankar, Madeline Zimmerman, and Greg Little argue that the Department of Defense's (DoD) acquisition system functions as a monopsony, a market condition where one buyer significantly controls the market. The authors liken this to how Walmart once dominated retail suppliers, pointing out that a monopsonistic DoD stifles innovation and competition among suppliers, causing the DoD itself to become stagnant and less innovative. They propose a radical restructuring that involves at least two competing program offices for every acquisition program. This change aims to incentivize programs to deliver better, faster, and cheaper solutions. Drawing parallels to the fierce inter-service competition of the past, such as during the development of ballistic missiles, the authors stress that competition within the DoD will stimulate innovation, ultimately benefiting national security and better preparing the U.S. against potential adversaries like China.

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