Using the three criteria known as the “Iron Triangle,” this study examines and analyzes the ramifications and effects of offset constraints on defense projects. Such projects, managed vis-à-vis governments and international authorities, contend with a constraint that does not exist in other domains: offset, an obligation and condition for the sale of defense products to a purchasing government. The study combines qualitative tools, ten semi-structured interviews conducted with academics and professionals, with quantitative tools, surveys sent to project managers and other people employed in leading Israeli defense manufacturing companies. In-depth analysis of the responses and findings of the qualitative study reveals that offset risk must be managed as any other project risk. Its influence is evident in the failure to meet project budgets. This finding points to a factor to be considered when preparing for and managing a project, and even more during the early stages of examining a transaction, prior to acceptance. The present study examined three hypotheses, using chi-square tests of independence, goodness-of-fit tests, loglinear Poisson regression analyses and fluctuation charts. We found that low offset percentage levels are associated with low levels of project budget exception and with low levels of perception of project budget exception. No association was found between offset percentage and schedule, and between offset percentage and performance.

Numerous companies from diverse industries use subcontracting in their operations. In complex projects, subcontractor selection is a crucial managerial decision that significantly impacts project success. The current mixed-methodology study examines that criteria that high-tech defense and civilian companies use to choose optimal subcontractors. The qualitative aspect derives from semi-structured interviews; the quantitative findings were obtained using three statistical methods: Friedman’s two-way analysis of variance by ranks, hierarchical cluster analysis, and multidimensional scaling (PROXSCAL). Data analysis yielded twelve leading criteria for subcontractor selection, categorized into four clusters of varying strength. The three highest-rated criteria were significantly stronger than the others and included system reliability and quality, level of service, and flexibility to change. The lowest rated criteria were leadership and innovation, and number of systems supplied in the past. The findings provide practical insights applicable to subcontractor selection and expand our knowledge of complex project management.

Identifying and assessing risk is one of the most important processes in managing complex systems and requires careful consideration. The need for an effective, efficient approach to risk management is considerably more important for defense industries, because they are exposed to risk in the early stages of development. This paper uses heterogeneity and homogeneity analysis between risk factors with Cochran’s Q test and multidimensional scaling in order to present the complexity of the risk factors relevant to defense systems of systems (SoSs), and it proposes a methodology for identifying, analyzing, and monitoring the risks that they face. Findings from an in-depth analysis of 46 classified defense SoSs shows a need to focus on three main risks faced by defense projects: insufficient human resources, changes in the original specifications, and lack of other (nonhuman) resources. The paper also presents some recommendations for minimizing risk factors in defense SoSs.

Identifying and assessing risk is one of the most important processes in managing complex systems and requires careful consideration. The need for an effective, efficient approach to risk management is considerably more important for defense industries, because they are exposed to risk already in early stages of development. This paper uses Heterogeneity and Homogeneity analysis between risk factors with Cochran’s Q test and Multidimensional scaling in order to present the complexity of the risk factors relevant to defense SoS, and proposes a methodology for identifying, analyzing and monitoring the risks that they face. Findings from an in-depth analysis of 46 classified defense SoS shows a need to focus on three main risks faced by defense projects: insufficient human resources, changes in the original specifications, and lack of other (non-human) resources. The paper also presents some recommendations for minimizing risk factors in defense SoS.