r research and development occurs outside of the DoD, such as the weapons labs that are under the Department of Energy (DoE). As legacies of the Cold War, they had produced most of the technology for Reagans weapons build up. The government attempts to solve the market failure of underprovided research and development in several ways. One type is through a direct subsidy. With this type of invention, the government grants money to a private firm to work on a specific project. The next type of government solution is awarded through tax incentives. Firms awarded tax breaks for conducting research that they show to have value. The final way that the government intervenes is through contracts. This is the primary way that the DoD funds research and development.Research and Development and Defense ContractingDefense contracting is part of the greater acquisition cycle by which the DoD procures everything from t-shirts to jet fighter planes. The acquisition cycle is a four-part process. After the service acquires approval from the Office of the Secretary of Defense, it proceeds through the four steps of the acquisition cycle.The first phase is concept formulation. This stage is where the military decides on the specifications of a weapon or piece of equipment. The service identifies the flaws in what it currently has, and then determines what the new good should do. These early decisions are critical, because they form the core around which the entire process is wrapped. (Mayer, 47) IN this phase, contracts for research and development are awarded to come up with specific designs. During the second phase, the most promising design is chosen, and the contract is awarded to develop a preliminary design. During this stage evaluation of the concept occurs, and many designs are weeded out based on technical problems or extremely high costs.The next stage is full-scale development, in which the product is finalized, and prepared for ...
