Fed Contracts - Great Unraveling or 18 Theses

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Another thread on FFRDCs alluded to this, but its impact extends to a ton of federal contracts, defense and civilian.

Palantir is looking to lead an in innovation revolution in defense services, and part of its claim as to why Big Five are entrenched is the wide use of cost plus contracts.

Their manifesto

https://www.18theses.com/

There is now a big push for firm fixed price contracts for almost every contract of there. We are seeing it in our science contracts, which may be bad for if we want experiments to complete, as re-do, problem resolution, are completely unpredictable so we will either have contracts padded really high or exhaust funds and work is halted. How does it work in reality?

The form of a contract is ultimately an expression of risks and incentives. Cost plus incentivizes companies to bid low and the government owns the risk of overruns. A FFP contract incentivizes companies to bid high because they own all the risk of overruns. How it works in reality depends in both cases on having the government be a smart and involved buyer. In most cases it isn’t going to be obvious which form of contract costs less in the end.

Any sort of cost contract, especially CPFF is called an exotic at my agency. They are risky as hell, and it usually reveals that the program office has no faith in their own planning skills. Problem here is that program offices don’t know how to define their requirements.

Which leads to CRs - essentially backdoor CPFFs. The general issue is the Feds aren't buying standard off-the-shelf products. Getting complete, correct, finalized requirements is a pipedream.

According to this administration, we will be buying more commercial stuff, hence the peculiar updates to FAR Part 12, and rest of the regs. The SAT and MPT are nothing going to see major increases in the en t several years, which will very much change, but NOT revolutionize contracting. Imagine the MPT at $100k- it’s coming.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Another thread on FFRDCs alluded to this, but its impact extends to a ton of federal contracts, defense and civilian.

Palantir is looking to lead an in innovation revolution in defense services, and part of its claim as to why Big Five are entrenched is the wide use of cost plus contracts.

Their manifesto

https://www.18theses.com/

There is now a big push for firm fixed price contracts for almost every contract of there. We are seeing it in our science contracts, which may be bad for if we want experiments to complete, as re-do, problem resolution, are completely unpredictable so we will either have contracts padded really high or exhaust funds and work is halted. How does it work in reality?

The form of a contract is ultimately an expression of risks and incentives. Cost plus incentivizes companies to bid low and the government owns the risk of overruns. A FFP contract incentivizes companies to bid high because they own all the risk of overruns. How it works in reality depends in both cases on having the government be a smart and involved buyer. In most cases it isn’t going to be obvious which form of contract costs less in the end.

Any sort of cost contract, especially CPFF is called an exotic at my agency. They are risky as hell, and it usually reveals that the program office has no faith in their own planning skills. Problem here is that program offices don’t know how to define their requirements.

Which leads to CRs - essentially backdoor CPFFs. The general issue is the Feds aren't buying standard off-the-shelf products. Getting complete, correct, finalized requirements is a pipedream.

According to this administration, we will be buying more commercial stuff, hence the peculiar updates to FAR Part 12, and rest of the regs. The SAT and MPT are nothing going to see major increases in the en t several years, which will very much change, but NOT revolutionize contracting. Imagine the MPT at $100k- it’s coming.

The Feds have had a commercial bias for years, but the Feds have many unique requirements that no other entities have. The COTS may work as frameworks on which one implements Federal requirements, but there simply are no off-the-shelf implementations that meet Federal needs because no other entities do what the Federal Government does.