Aerospace & Defense Series: DOD Study Touts Competition Benefits in Military Purchases—Creates Implications for Future Antitrust Reviews

By on July 18, 2014

It is a general tenet that competition serves customers well, enabling them to acquire better products at lower prices.  Of course, this premise underlies the antitrust laws.  In the aerospace and defense industry, the customers are often government agencies that are monopsonists with significant purchasing leverage.  Government customers often have contracting mechanisms that are not generally available in the commercial marketplace, such as the ability to receive certified cost and pricing data from contractors.  From time to time, contractors have attempted to rely on arguments that the government’s buyer power and contracting rights ensure that contractors cannot impose unreasonable pricing on the government, even if there is no or limited competition.  The antitrust regulators and the U.S. Department of Defense (DoD) have long rejected that notion, stressing that regulation is not a substitute for competition.  A recent DoD study supports that general proposition, and provides data the DoD interprets as showing that the presence of competition improves contracting outcomes for the government.  See DoD 2014 Annual Report on the Performance of the Defense Acquisition System.  This report provides some interesting thoughts and data that may impact future antitrust agency reviews.

Read the full article.

Jon B. DubrowJon B. Dubrow
Jon B. Dubrow assists clients across a host of inter-related antitrust issues, including mergers and acquisitions (M&A) transactions / merger clearance, counseling and litigation. Jon leads the defense of mergers, acquisitions and joint ventures before the Department of Justice, the Federal Trade Commission and foreign competition authorities. He also regularly assists third parties whose interests are adversely affected by proposed transactions. Jon also is experienced in antitrust litigation. He provides counseling on distribution issues, contracting arrangements and a wide variety of other competition-related matters. Read Jon Dubrow's full bio.

STAY CONNECTED

TOPICS

ARCHIVES