US Defence: Consumers get cheaper IT than us

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US Defence: Consumers get cheaper IT than us

Diseconomies of scale.

Services and IT companies hoping for a slice of the US Department of Defense's US$200 billion annual spend on support systems faced a tougher and more competitive bidding process, which US Defense secretary Robert Gates hoped would save it US$100 billion.

Gates on Tuesday lamented the Department of Defense's exclusion from falling prices for information technology gadgets.

"Consumers are accustomed to getting more for their money - a more powerful computer, wider functionality in mobile phones - every year," he said.

"When it comes to the defence sector, however, the taxpayers had to spend significantly more in order to get more. We need to reverse this trend," he said.

Gates had been hunting for US$100 billion in savings over the next five years from its war fighting and administrative costs.

Annually the US DoD spent some US$200 billion of its US$700 billion budget on information technology and its maintenance and professional services.

The secretary said that it wanted to structure its bidding processes to replace phoney with real competition.

"Beginning today, we are implementing a number of measures to improve efficiencies in the services-contracts area, including especially increasing the rates of competitive bidding," said Gates.

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