Letter: McCain, industry have different views on contract use
A reader writes, "The reason for the majority of the cost escalations are the result of specification and performance upgrades that become possible during the performance of the contract."
Regarding "Buzz of the Week: McCain and cost-plus contracting": It is interesting that Mr. McCain thinks that eliminating cost-plus contracts will save money at the same time that private industry is beginning to use cost-plus contracts in the period of extreme function.
See the second article by Professor Robert Hanfiled in the latest issue of the IACCM (International Association for Contract and Commercial Management) newsletter.
As mentioned by others, if forced to price an FFP industry will simply price in risk or not bid.
The reason for the majority of the cost escalations are the result of specification and performance upgrades that become possible during the performance of the contract. Of course we could insist that there be no changes while the contractor is building what we've asked for and when delivery is made we can accept an obsolete piece of equipment. I guess it will be whatever the president wants.
Anonymous
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See the second article by Professor Robert Hanfiled in the latest issue of the IACCM (International Association for Contract and Commercial Management) newsletter.
As mentioned by others, if forced to price an FFP industry will simply price in risk or not bid.
The reason for the majority of the cost escalations are the result of specification and performance upgrades that become possible during the performance of the contract. Of course we could insist that there be no changes while the contractor is building what we've asked for and when delivery is made we can accept an obsolete piece of equipment. I guess it will be whatever the president wants.
Anonymous
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.
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