Research On Design Competitions Of R&D In Equipment Procurement

In a modern high-tech war, the technological content of weapon equipment is an important factor which determines the outcome of a war. The crux of enhancement of the technological content of weapon equipment is R&D. R&D is an important link in the life-cycle management process of equipment procurement. In R&D phase core issue is how to encourage innovation. Design competition can be effective in encouraging innovation. Design competition has been widely used in U.S. weapon equipment procurement practice, and has attracted increasing attention of the military and defense contractors. Theory and practice indicated that incentive mechanism of innovation is key factor which affects the efficiency and effectiveness of innovation. Design competition is an effective approach to encourage innovation in R&D stage of equipment procurement. Procurement through competition in design and technology has become a well-established practice to encourage innovation in equipment procurement department of major developed countries. For this reason, based on contest theory of incentive theory, with the use of tools and methods of mathematical and information economics, this article systematically studied design competition in the R&D phase of equipment procurement. First of all papers start from the efficiency of the equipment procurement, and arrived at a conclusion:"design competition is an effective solution to the incentive problem in the R&D phase of equipment procurement."Then, based on contest theory, papers revealed mechanism and conditions of application of the design competition by establishing and solving a simple model of the design competition, and investigated the influences of bonuses settings, selecting and information structure of contestants on efficiency of the design competition separately. Then taking the U.S. weapon equipment procurement practice for example, paper analyzed the successional variation process and drivers of the design competition. Finally according to the actual weapon equipment procurement of our army, paper put forward policy proposals of introducing design competition to our military and discussed prospect how to adopt the design competition in equipment procurement of our country as a market country with economies in transition.