Navy Acquisition via Leasing: Policy, Politics, and Polemics with the Maritime Prepositioned Ships
Research rept. 30 Sep 2004-30 Apr 2005
NAVAL POSTGRADUATE SCHOOL MONTEREY CA GRADUATE SCHOOL OF BUSINESS AND PUBLIC POLICY
Pagination or Media Count:
In recent months, leasing has been prominent in the press in connection with the Air Forces ill-fated attempt to obtain the use of Boeing re-fueling tankers without buying them. Gone from memory is the early 1980s controversial Navy leasing program of Maritime Prepositioned Ships that had a different result. This paper presents an analysis of the various issues and parties to the very creative and innovative financing on behalf of the Navys Military Sealift Command. Still in existence today, the 1983 contracts for thirteen TAKX ships were valued at approximately 2.6 billion. While the decision is often framed as a lease versus purchase choice, the facts indicate that the option to purchase was not seen as viable at the time. In hindsight, the TAKX leasing program was successful and cost-effective, despite the whirlwind of political commentary and intrigue and the dueling quantitative analyses surrounding it. However, as an unintended or, perhaps, intended consequence, laws and policies have since been changed so that leasing is no longer viable for financing military assets. The case presented here considers altering existing laws and regulations to once again permit leasing of military resources.
- Economics and Cost Analysis
- Marine Engineering
- Logistics, Military Facilities and Supplies