Acquisition Headlines

Army ‘Big Six’ Ramp Up in 2021: Learning From FCS. Good charts at the link. Looks like the Army bureaucracy decided upon the next set of technology winners. Let’s check back in a decade to see how that works out. Here’s some more on that.

DOD acquisition office saw workforce reduction, job changes despite assurances. “I’m a big believer that if you delegate authority and responsibility to the lowest level, you’re going to get real innovation,” Fahey said. Sounds nice, but that delegation never really took place for Laird, or Weinberger, or anyone else (hint, they ignored the budget).

The Pentagon’s 2020 Budget Asks for Nearly 380 Aircraft, But One Buy Is Raising Eyebrows. “The real wild card here: the Air Force is asking for eight F-15EX fighters, part of a goal of buying 80 through 2024.”

Did You Miss Lockheed Martin’s (NYSE:LMT) 86% Share Price Gain? My view is that defense stocks are always mispriced because they are neglecting the implicit government guarantee, the fact that the government pays for most of the capital, tooling, and other costs, and the fact that primes make solid profit as a percentage of value add (~70% of defense business unit direct costs are materials/subcontractors).

Insights that apply to weapon systems choice — Why Economics Needs Good Theory: Facts and Figures Aren’t Enough. Here is a Hayek quote I like on this:

It is a false epistemological principle to adapt the theory to the available information, so that the observed variables appear directly in the theory.

Statistical variables such as national income, investment, price levels, and production are variables that play no role in the process of their determination itself.

Be the first to comment

Leave a Reply