Competition in the Acquisition of Replenishment Spare Parts.

The use of competition is required for Government procurement, because it is believed to lead to lower prices. This research project was undertaken as a result of a recent empirical study that reported that prices do not always decrease when competition is introduced into the acquisition of replenishment spare parts. The research objectives were to provide evidence to support or refute the expectation of price reductions stemming from competition, and to identify unique characteristics of the spare parts that might influence the magnitude of competitive savings or losses. Four years, of procurement data histories for replenishment spare parts, obtained from the Air Force Logistics Commands Air Logistics Centers, provided the data utilized in the research project. Three major conclusions resulted from this study competition leads to lower prices, prices increase when a spare part transitions from competitive to sole source acquisitions, and the prices of aircraft engine spare parts increase when competition is introduced into the marketplace. Several recommended changes and improvements to the replenishment spare parts acquisition process along with the identification of areas in need of additional research were made based upon the research findings. Author