Improving Navy's Buying Power Through Cost Savings

摘要

The Department of the Navy wants to recapitalize but finds that it does not have as much buying power as it used to. Last year. CNA examined the trends in the Navy's budgets and prices to understand why the Navy could not buy as many weapons platforms as it used to: the study found that the Navy had less to spend on procurement than before and that the Navy's mix of ships and aircraft cost more on average now than before. To reverse the trend and buy more platforms, the Navy needs to devote more money for procurement and/or buy less expensive platforms. This study examined various initiatives or savings opportunities (total of 17) that would allow the Navy to allocate more money for procurement. Taken together, the total savings from these initiatives are about $7 billion to $10 billion (or 5 to 8 percent of the Navy's annual budget). We assessed the risk associated with these initiatives and deemed most to be minimal to moderate risk in terms of cost uncertainty, effects on readiness, or other effectiveness measures. Nonetheless, tough decisions must be made and cultural and other barriers must be overcome before the Navy may reap the savings.