production. A contract is also awarded at this step, to a firm that will take the final concept and make it ready for production and deployment and able to perform the tasks designated in the first phase.At this point the results of the full-scale development are approved by the Office of the Secretary of Defense, and the weapon or the piece of equipment is mass-produced and sent into the field for use. This, the final stage, is production and deployment. In most cases the contractor who was granted the full-scale development contract is given the production contract if the product ends up being made.This is the process used to create weapons, planes, helicopters, missiles, and other large-scale pieces of equipment. Throughout each stage, costs increase, and the sunk costs of developing the item grow. During the initial stages of research and development, under the concept formulation phase, the government often pays fifty percent of the research and development costs. Another type of agreement that is often made is one where the government agrees to pay the costs of the process, plus some other fixed amount, that will be the producers profit. This is called a cost-plus contract. Analysis of the Costs and Benefits of Funding Military Research and DevelopmentTo examine the costs and benefits incurred form funding military research and development costs, we must first survey the cost and benefits of the funding as a general concept and then finally review the methods which the government administers the funding. As previously detailed, the government intervenes in research and development funding, because of the market failure associated with knowledge. The market will under-produce research and development, just as it does with knowledge, so policies are implemented to influence this factor.The most obvious cost of funding R&D in general, and especially for the military is the cost to tax payers. The facts are that people woul...
