Letter: McCain proposal a red herring

Regarding "McCain wants to end cost-plus contracting"

Eliminating cost contracts would eventually increase Pentagon costs. Under fixed price contracts, the supplier assumes the majority risk and would therefore increase its price to cover contingencies and maintain its profit margin. Under fixed price contracts, the government would have less visibility into contractor proposed pricing structures, particularly if it is a competitive bid.

For research and development efforts, the government, and ultimately the tax payer, would lose out financially (and possibly in quality and integrity of design and product) if contractors are faced with making choices between costs to develop and/or produce a superior product, and preserving profit.

There are many other mechanisms and strategies which can be used to control costs on cost-type contracts without eliminating one of the best contract vehicles for state-of-the-art technology development. This proposal by McCain is a red herring thrown out during the presidential debate to catch the ear of a public not familiar with the intricacies of government contracting.

Deborah Jackson
Jet Propulsion Laboratory

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.