Government and industry have long recognized the benefits of competition in improving performance and reducing costs. However, we often view competition as simply a contracting process. Once a bidder wins a contract, the competitive process ends. Without providing real and enduring competition throughout the life of a program, the single-provider approach can result in longer schedules and higher costs.
Under the continuous-competition strategy, a program employs multiple contractors. The increased competitive pressure during development and production leads to better performance, often at reduced cost. It also provides the program with an "insurance policy" should the primary contractor fail to perform adequately.
Several acquisition strategies promote the use of a multi-provider approach. For example, Competitive Multi-Sourcing with Distributed Awards employs a primary contractor who receives the majority of funding and a back-up contractor who receives significantly less. Keeping a secondary contractor maintains competitive pressure on the prime contractor while allowing the secondary contractor to gain familiarity with the program's operations should the primary contractor fail to meet program objectives.