Reform of Budgeting for Acquisition: Lessons from Private Sector Capital Budgeting for the Department of Defense

摘要

Current trends in federal budgeting move the authors to conclude that the argument for implementing capital budgeting in the federal government should be revisited. It is clear that significant changes would have to occur in the present system if private sector capital budgeting methods were adopted by the Department of Defense (DoD) and other agencies of the Federal Government. However, there are examples of public organizations that have made this leap. The governments of New Zealand, Australia, and the United Kingdom, as well as most of the states in the United States have adopted some private budgeting methods with varying degrees of success. This report explores how capital budgeting is practiced in the private sector and in other governments, and how some of these practices could be applied in the Federal Government and Department of Defense. The report also provides a brief critique of DoD acquisition budgeting.