With the advent of the information age, both commercial industry and the Department of Defense are moving towards complex R&D-intensive systems over the simpler, mass-produced systems of the industrial age. This CSIS report analyzes the historical trends in the relationship of production costs to development costs in complex acquisition programs. To understand this phenomenon, the study team examines it at two different levels. The first is the macro investment level where portfolio management trade-offs are made between aggregate development and procurement and between programs. The second level is individual programs where the ambitions of the program and the underlying technology shape the resources required for a program to complete development.
Rhys McCormick is a fellow with the Defense-Industrial Initiatives Group at CSIS. His work focuses on unmanned systems, global defense industrial base issues, and U.S. federal and defense contracting trends. Andrew Hunter is a senior fellow in the International Security Program and director of the Defense-Industrial Initiatives Group at CSIS. He focuses on issues affecting the industrial base, including emerging technologies, sequestration, acquisition policy, and industrial policy. Gregory Sanders is deputy director and fellow with the Defense-Industrial Initiatives Group at CSIS, where he manages a research team that analyzes data on U.S. government contract spending and other budget and acquisition issues.