Funding and cooperation

> This is due to cost-plus accounting. This means that the government
> will pay a certain small percentage over what it costs the company to
> produce it. While this might sound fair in theory, in practice it
> gives a strong incentive for government contractors to do everything
> they can to push up the costs, so they get greater profits.
>
> --JohnWheeler

Which is why the government has been using firm fixed price contracts
for the last ten years or so almost exclusively. Except that the US
govenment's concept of firm fixed price is that they get to know
everything about the contractors rate structure, costs, job estimate
justification, etc. so it ends up amounting to estimated costs plus a
little profit. There is really no such thing as market price in
government contracting.

Mitchell James
www.InnerTransit.org (Homebase for collaborative engineering)