We Need to Understand Chinese Procurement

NCMA’s December 2012 flagship publication, Contract Management, published the article Comparative Best Practices in Public Sector Contracting — How the FAR Excels in the Socioeconomic Perspective. The piece provides a brief breakdown of five major procurement regimes including the the European Union’s Procurement Directives used by the European Union and the U.S.’s Federal Acquisition Regulation. However, China’s procurement regime was not mentioned. This is important two reasons:

  1. China is the world’s 2nd largest economy and continues grow, so a complete analysis of major procurement regimes is not complete.
  2. China is rapidly reducing the timeframe it needs to field complex weapon systems. Consider the cases of the early nuclear weapons and fifth-generation stealth fighters/ The US developed the atomic bomb relatively quickly, but it took China until 1964 to demonstrate a nuclear weapon. Stealth fighters are a good example. It took the US decades to field the F-22 stealth fighter. We’re also having trouble getting the F-35 stealth fighter into the field. The Chinese introduced the J-20 stealth prototype in 2011 and some expect it to be operational in 2017.

There are many reasons for a shortened timeframe including a well-trained workforce and a growing economy. I suspect that one reason is the improvement in Chinese procurement practices and policies, but it is difficult to find information on on this topic. If the Chinese have improved in this area, it would be helpful for Americans to understand how. A comprehensive study on Chinese procurement practices and policies could be integrated into a class titled Comparative Procurement Regimes studying American, European and Chinese procurement models. This class would be very helpful in training the next generation of contracting professionals in the same way a comparative government helps you understand your own government.

Original Post | All Things Sterling

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Jaime Gracia

Perhaps Steve Kelman, former OFPP Administrator and now at the Harvard Kennedy School of Government might weigh in on this. He has traveled extensively throughout China, and writes about these issues on his blog on FCW, The Lectern.

Defense requirements in the USA are a mess, with little thought into actual security and need. Instead, it is a focus on requirement that are not needed, to the point of scope creep beyond control, or Nunn-McCurdy for that matter.

The Chinese seem to be flush with money, so they are spending with little thought into quality and investments into better engineering and long-term performance.