Letter: McCain off-base about cost-plus contracts

Regarding: "McCain wants to end cost-plus contracting" You know it's time to retire when you see the same solution to a problem that you remember seeing earlier in your career.

Back in the mid-80's Washington was up in arms over spiraling (out of control?) program costs. Their solution was to outlaw cost-plus contracts and require only fixed-price contracts. Didn't work then and won't work now because the type of contract (pricing agreement) is NOT the problem. Contract pricing is a function of the customer's ability to define the requirement. This ability to define the requirement directly establishes the contractor's ability to project the risk of performance under the contract.

The less we (the government) are able to define the requirement the more risk the contrator assumes with respect to performance. More risk = more profit. Another element of cost control is the degree of contract oversite on the part of the government. We have to keep an eye on the contractor and track [its] progress. These are the current (and ongoing) problems with government contracts. We have to define the requirement and pay attention to the contractor's performance. We don't have enough competent people to do this. Just changing the manner of contract pricing won't solve the problem.

Michael McManus
USAF

What do you think? Paste a comment in the box below (registration required), or send your comment to letters@fcw.com (subject line: Blog comment) and we'll post it.

Featured

  • FCW PERSPECTIVES
    sensor network (agsandrew/Shutterstock.com)

    Are agencies really ready for EIS?

    The telecom contract has the potential to reinvent IT infrastructure, but finding the bandwidth to take full advantage could prove difficult.

  • People
    Dave Powner, GAO

    Dave Powner audits the state of federal IT

    The GAO director of information technology issues is leaving government after 16 years. On his way out the door, Dave Powner details how far govtech has come in the past two decades and flags the most critical issues he sees facing federal IT leaders.

  • FCW Illustration.  Original Images: Shutterstock, Airbnb

    Should federal contracting be more like Airbnb?

    Steve Kelman believes a lighter touch and a bit more trust could transform today's compliance culture.

Stay Connected

FCW Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.