If the defense contractor says they can deliver a unit for x amount of dollars, shouldn’t they be made to eat the cost overruns?
it’s like pre ordering a car for 40k, then being told there were problems with the new transmission, so it will be an extra 5k.
If the defense contractor says they can deliver a unit
The problem is the unit is never finished as alterations and mission changes are continually made until the unit is on line. Then the retrofitting begins.
Hard to separate contractor waste from loss due to EVER-CHANGING DoD specs/requirements.
The problem is two-fold:
1) Too many Gubmint DoD workers are ROADies (Retitred On Active Duty) and have no idea what they are doing or the ramifications of what they are requesting.
2) Too many contractor upper-management-types came out of that same system and know how to game it.
(2a - people are basically selfish and greedy and unable to police themselves)
Depends on who is responsible for the cost over run. NavSea an NavAir have a very long history of issuing change orders to ship construction contracts. These may be necessary but they increase the cost of construction and delay delivery of the ship. The Navy is responsible for the cost overrun and has to pay for it. In some cases the contractor is responsible through poor workmanship, incorrect materials, missed deadlines etc. If that is the case, you are correct, the yard should eat the cost overrun.
If the contractor is at fault, by all means...but,
the DoD is typically responsible for most cost overruns...it’s the dirty little open secret in the acquisition world.
The services come up with all kinds of add-ons and requirements after the original contract is signed that the contractor agrees to comply with...then the services complain that their new widget costs much more than “originally” agreed upon, is overweight, behind schedule, etc. and the contractor gets hauled before Congress and mauled in the press.
Not when the government constantly changes the requirements ...