Innovation for Hire: A Descriptive Study of Federal Acquisitions and Contractor R&D

38 Pages Posted: 8 Nov 2019 Last revised: 7 Aug 2020

See all articles by Judith Hermis

Judith Hermis

Naval Postgraduate School

Stephen Hansen

affiliation not provided to SSRN

Date Written: August 3, 2020

Abstract

In 2016, the U.S. Federal government procured goods and services totaling $460 billion, or over two percent of America’s gross domestic product. Innovation is a key goal of Federal procurements, but it is unclear whether acquisitions help achieve this objective. We explore firms’ innovation over an eight-year period and find that firms increase research and development commensurate with government contracts. We also create a measure that ranks firms on the intensity of innovation on government relative to non-government contracts. Tests deploying this tool show that firms with the most (least) research and development on government (relative to private) contracts produce innovative goods such as missiles (security guards). Results suggest that Federal acquisitions motivate innovation at levels that are appropriate to the nature of requisitioned goods or services. These results should be of interest to practitioners and acquisition personnel who serve a common goal of efficiently deploying a finite pool of taxpayer-generated revenues to the most productive use.

Keywords: R&D, innovation, research, development, procurement, defense, government contracts, DoD

Suggested Citation

Hermis, Judith and Hansen, Stephen, Innovation for Hire: A Descriptive Study of Federal Acquisitions and Contractor R&D (August 3, 2020). Available at SSRN: https://ssrn.com/abstract=3477559 or http://dx.doi.org/10.2139/ssrn.3477559

Judith Hermis (Contact Author)

Naval Postgraduate School ( email )

555 Dyer Road
Monterey, CA 93943
United States

Stephen Hansen

affiliation not provided to SSRN ( email )

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
60
Abstract Views
480
rank
387,700
PlumX Metrics