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Since the 1998 Strategic Defense Review the UK Government reversed its competition policy and now seeks to improve Defense Procurement relationships with industry through partnering. However, at a time when the Defense industries are concentrating and globalizing and more and more of the large contracts are being managed under monopoly conditions, substantive relationship improvements are hard to find. This paper reviews the development of Supply Chain Management, examines its practical implementation issues and identifies the key relational success factors. However, it finds that previous research has concentrated on the civil sector within normal markets. The authors propose that a Transaction Cost Economics Market Failure model provides insights into solving the Defense Procurement problem by focusing the combination of Supply Chain factors.
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