A Study On Supervision And Incentive Mechanism In Weapon Equipment Procurement

As an important means and material base of consolidating national defenses, resisting aggressions and defending the national securities, weapon equipment is an important symbol of the modernization of national defense and armed forces. As a fundamental way to obtain weapon equipment, the weapon equipment procurement occupies an extremely important position in the weapons equipment construction. The quality of weapon equipment procurement and troop fighting are directly related to its healthy environment, sound rules and regulations, and effective operating mechanism. Because of a long-term of planned economic system in China, weapon equipment has been a national investment, on-site research. Basically, there is no competition in weapon equipment. The development and production of weapon equipment is prone to some phenomena such as delays in progress, indicators declined and funding rising ("dragging, dropping, rising"). At the early 21st century, ten military industry groups and the PLA General Armament Department have been established which creates a good environment to implement a market-oriented pattern of competition in the weapon equipment procurement. It is necessary to deepen the restructuring of defense-related science, technology and industry, combine military efforts with civilian support, establish and improve the mechanism of competition, appraisal, supervision and incentive (referred to as "four mechanism") and enhance the capabilities of independent innovation so as to speed up the development of defense-related science and technology as well as arms and equipment. And this is the development direction of weapon equipment procurement in the new century.Standing on the military perspective, the paper, which aims at the "dragging, dropping, rising" in weapon equipment procurement and the insufficiency on "four mechanism" under market economic condition, designed the supervision and incentive system with the principal-agent theory, contract theory, mechanism design theory and multi-attribute decision-making,in order to make a reference and theory support for setting up weapon equipment procurement policy and its further development by deduction of the principal elements of the weapon equipment procurement market.This paper deals with the contents as the following aspects:①Study on quality supervision and incentive mechanism by factory-location military representatives for weapon equipment. Aiming at the circumstances of moral risks or weak-execution of factory-location military representatives, the quality supervision of principal-agent model for weapon equipment has been set up on the basis of quality supervision system and supervision performance, while the incentive mechanism has also been designed accordingly under the circumstances of information symmetry and asymmetry, which urges military representative to make the choices that benefit the military party.②The design of reimbursement incentive mechanism for weapon equipment development cost. The thesis argues how to use the limited development and procurement funds to encourage the military industry enterprises to get involved into competition and quickly develop the excellent cost-performance military hardware. Furthermore, weapon equipment development cost reimbursement model has been established and the best rate of research and development reimbursement anticipated by the military industry enterprises has been offered, while the corresponding advices have also been proposed through the analysis of the best rate of research and development cost reimbursement which is the effective gearing of stimulating weapon equipment development.③The incentive mechanism design in weapon equipment assemble system base on quality tracing. To ensure the weapon equipment's quality, the paper thinks over the means of applying the effective incentive mechanism and scientific methods to test and inspect the weapon equipment productive progress. Through setting up the weapon equipment quality tracing and corresponding incentive mechanisms which are based on the double moral hazard, urge the weapon equipment assembly factory and components supplier to make the weapon equipment assembly and components production according to the promissory quality standard while maximize the weapon equipment enterprises'profit.④The study on weapon equipment supplier's selection and procurement quantity allocation. To select the appreciate ones from the crowds of suppliers and to allocate supplying quantity among them according to the stability and deliverability of the suppliers. To help the military industry enterprises selecting the qualified suppliers in quality, lead time and technique level, distributing the procurement quantity justly and cutting down the procurement cost by setting up two phase multi-attribute decision-making method.⑤The quality supervision and incentive for weapon equipment suppliers. The paper discusses how to supervise the vendor's quality and offer the corresponding incentive under the circumstances of weapon equipment components'marketization. Through establishing the supervision model to military industry enterprises and the vendors, the paper reaches the conclusion that inspection mode should be improved in accordance with the situation that military industry enterprises get benefits by practicing fraud, the supervision difficulty degree and the severity. Meanwhile, the measure of"high quality, high price, and high quantity"is also to be argued for boosting the vendors'enthusiasm.This paper has the following innovations:①The paper establishes a game theory model of quality supervision based on the military representative performance and the external environmental factors and puts forward incentive mechanism of quality supervision for the military representative taking part in weapon equipment procurement.This paper comprehensively considers the trait factors which influence the performance of military representative performance such as the ability level of the military performance, frequency of supervision, and external random factors, establishing a principal-agent model between the military and the military performance in the period of weapon equipment procurement. This model based on the classic performance model, which makes such improvements: First, the effort performance has been refined and the supervision frequency of military performance and technical capacity are taken into account. Second, the influence which exogenous uncertainty factors impact on the performance is refined, and a certain degree of influence is given. Third, specifies the exogenous variables to military order of foreign trade in the expansion model, considering the performance impact of military performance. The model shows that it can play a better role to incentive the military representative to carry out quality supervision.②The paper establishes a game theory model of quality supervision for assembly and produce of weapon equipment and presents incentive mechanism of quality control for weapon equipment product based on quality track.This paper is different from those generally use the pre-testing and monitoring methods when monitor the quality of purchased component in conventional weapon equipment product. The manufacture does not test the outsourcing component, only for quality tracking. When the final product of weapon equipment have a quality problems, first the military manufacture make appropriate compensation for the military, after a quality track to weapon equipment is made by an independent 3rd party (the military representatives),and find identify quality problems responsible parties, let it take the corresponding responsibility for quality. This after-way changes the manufacturers'opinion of the component quality. And it converts the situation in which manufacturers are easy to take a heavier military responsibility though the quality of a purchased component is the main cause. This approach reduces the workload of quality supervision in the military industrial enterprises and military performance and improves the quality of weapon equipment effectively, and maximizes the profits of weapon equipment, system and military factories.③The paper establishes a hybrid multi-attribute model and presents a method of choice among weapons equipment suppliers and in its distribution of the number of component scientifically.At present, the researches for selection method of weapon equipment supplier are not so much, and most of them are qualitative research. This paper constructs a decision model with multi-resources, two stages and hybrid multi-attribute. In this model, the entropy coefficient model is applied to confirm the objective weights of supplier evaluation index, and TOPSIS model is applied to arrange the order of scheduled programs; then a multi-objective programming model is established to determine the number of the distribution between selected suppliers. This model can not only depict the actual situation of selected suppliers in several faces, such as quality, delivery, and technical level; but also help the military enterprises effectively choose the requirements of supporting suppliers, and reasonably distribute the quantity of purchase.