Military procurement is the management of a nation's investments in technologies, programs, and product support necessary to achieve its National Security Strategy and support its Armed Forces. The goal is to rapidly acquire quality products that fulfill user needs with improvements to mission capability at an equitable price.
The US Defense Acquisition University (DAU) defines procurement as the act of buying goods and services for the government. DAU defines acquisition as the conceptualization, initiation, design, development, test, contracting, production, deployment, Logistics Support, modification, and disposal of weapons and other systems, supplies, or services (including construction) to satisfy Department of Defense needs, intended for use in or in support of military missions. Acquisition is therefore a much wider concept than procurement, covering the whole life cycle of acquired systems.
Military acquisition uses various science, management, and engineering disciplines within the context of a nation's law and regulation framework to produce military material and technology.
Military acquisition has a long history spanning from ancient times (e.g., blacksmith, shipbuilding) to modern times. It wasn’t until the 20th century, due to a drastic increase in the complexity of military weapon systems, that acquisition became a major defense activity.
It is favorable that the goods, services or works are appropriate and that they are procured at the best possible cost to meet the needs of the purchaser in terms of quality and quantity, time, and location. Corporations often define processes intended to promote fair and open competition for their business while minimizing exposure to fraud and collusion.
Almost all purchasing decisions include factors such as delivery and handling, marginal benefit, and price fluctuations. Procurement generally involves making buying decisions under conditions of scarcity. If accurate data is available, it is good practice to make use of economic analysis methods such as cost-benefit analysis or cost-utility analysis.
Risk is an important distinction made between analyses. Where risk is involved, either in the costs or the benefits, the concept of expected value may be employed.
Based on the consumption purposes of the acquired goods and services, procurement activities are often split into two distinct categories. The first category being direct, production-related procurement and the second being indirect, non-production-related procurement.
Direct procurement occurs in manufacturing settings only. It encompasses all items that are part of finished products, such as raw material, components and parts. Direct procurement directly affects the production process of manufacturing firms. In contrast, indirect procurement activities concern “operating resources” that a company purchases to enable its operations. It comprises a wide variety of goods and services, from standardized low value items like office supplies and machine lubricants to complex and costly products and services like heavy equipment and consulting services.
The overall objective of military procurement is to maintain a military that is prepared to face uncertain future security challenges. This often requires the acquisition and procurement of new and technologically advanced equipment, which is a major expense for any nation. Military procurement often receives negative marks in public opinion. Many argue that there is little effort to curtail waste and excess spending. There is an ongoing debate concerning quality vs. quantity when it pertains to procurement.